•       Old Mutual Limited equity value decreased by 3% due to lower covered business value.
  •       Old Mutual Zimbabwe focuses on lending and investment activities in key sectors.
  •         The company invests in sustainable energy projects and promotes ESG principles.
  •         The value of the Zimbabwe business is reduced to zero, but the business remained profitable, remitting a dividend to the Group.

Old Mutual, a 177-year-old financial services provider with operations across six different lines of business, has released its 2022 integrated report for the year ended December 31, 2022. The report provides a summary of the Group's financial performance, including the impact of hyperinflation in Zimbabwe on profits, changes in equity value, and dividends paid out to shareholders.

Hyperinflation in Zimbabwe and capital barriers continue to exclude the results of the Zimbabwe business from the Group's adjusted headline earnings. The decline in Zimbabwe earnings was driven by the deterioration of the Zimbabwean dollar to the rand and lower investment returns on equities traded on the Zimbabwe Stock Exchange.

Old Mutual Limited equity value decreased by 3% from the previous year, mainly due to the lower closing value of covered business. The equity attributable to covered business also includes a capital outflow to Asset Management and Banking and Lending, while non-covered businesses' value increased by 15%. The Asset Management Group equity value increased by 5%, mainly due to a higher valuation of Old Mutual Wealth.

The value of the business in Zimbabwe is reduced to zero in Group equity value due to the continued impact of hyperinflation on the Zimbabwean economy. However, the Zimbabwe business remained profitable, remitting the 2021 declared dividend of USD 1.2 million to the Group. The value of 'other' increased, mainly due to dividends received in holding companies from the covered, Asset Management, and Property and Casualty businesses, as well as from Residual plc.

Old Mutual Zimbabwe recently held an analyst briefing, where they highlighted areas of growth opportunities for the company. Lending and investment activities were among the key areas of growth, anchored by customers in key subsectors of the economy. Of the total loan book, 39% was attributed to agriculture activities, with beneficiaries ranging from primary to secondary subsectors. The company continued to support the production of local food, agro-exporters in horticulture, cotton, and tobacco. Additionally, 4.5% of the total loan book was disbursed to mining companies and the value chain, with significant amounts deployed to support manufacturing and distribution businesses. Old Mutual Zimbabwe support of economic development through lending and investment activities has impacted foreign currency generation, substitution of imports, and food security.

Another area of growth for Old Mutual Zimbabwe is energy. The company has deployed USD9.5m into solar and hydro energy projects, including Great Zimbabwe Hydro, Kupinga Renewable Energy, Solgas, Richaw, and Centragrid. These projects are projected to generate over 42MW in energy, over 370 jobs, and provide power to 39,950 homes. The company has also continued to promote ESG principles, ensuring that the projects are sustainable and socially responsible.

In conclusion, Old Mutual Zimbabwe's lending and investment activities, as well as its investments in the energy sector, are significant growth opportunities for the company. By supporting key subsectors of the economy, the company is contributing to economic development, impacting foreign currency generation, substitution of imports, and food security. Additionally, the company's investments in the energy sector are promoting sustainable and socially responsible practices, providing power to thousands of homes and creating jobs.