Old Mutual posts ZW$432 billion PAT

  • Total assets value triple to ZW$60.4 billion
  • Operating and administrative expenses increase due to inflationary pressures
  • Defers projects on COVID-19 impact

Harare – Old Mutual Zimbabwe (OMZ) recorded a 730% increase in profit after tax to ZW$432 billion in the half year ended 30 June 2020 on an inflation adjusted terms from ZW$519.1 million achieved in the same period last year, attributable to an increase in non-banking investment income.

Non-banking investment income increased by 65% to ZW$31.4 billion from ZW$19.1 billion recorded in the prior comparable period.

Revenue scaled up 1311% from ZW$2.4 billion in the prior year to ZW$34.5 billion on the back of growth in all revenue lines, particularly investment income.

Commenting on the performance, OMZ chairperson Johannes Gawaxab said, “However, despite the growth in total revenue, we noted a slow-down in some revenue lines such as banking transactional income due to the economic impact of the lockdown that was introduced to curb the spread of COVID-19.”

He highlighted that COVID-19 had an impact on the alternative investments and private equity deal pipeline.

“A number of projects in this portfolio (including the official launch of the Eastgate Market) had to be deferred,” said Mr Gawazab.

Net earned premiums grew by 414% to ZW$534.4 million during the period under review from ZW$103.9 million in the prior comparative period driven by increase in the nominal value of premiums due to the impact of inflation.

Despite the positive revenue performance, OMZ’s operating and administrative expenses increased by 539% to ZW$511.7 million from ZW$80.1 million in the comparable prior period.

“The increase was driven by inflationary pressures and the impact local currency devaluation which resulted in costs of imported goods and services increasing significantly,” said Gawazab.

“Unbudgeted expenditure was also incurred towards measures implemented by the business in response to the impact of COVID-19 which included enabling some employees to work from home and providing a safe working environment for members of staff that have to be physically present at our offices and service centres as well as walk-in customers.”

Total assets increased by 293% from ZW$15.4 billion as at 31 December 2019 to ZW$60.4 billion driven by investment gains, increased US dollar denominated lendiing and exchange gains.

Total equity position increased to ZW$10.5 billion during the period under review, 389% up from ZW$2.1 billion attributed to the growth in profit.

Mr Gawaxab expressed confidence that the Group will be able to withstand challenges moving forward.

“Despite economic challenges and the impact of COVID-19 we remained focused on building a strong business that is best positioned to continue to deliver solutions to customers”, he said.

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