London-listed investment vehicle Masawara Plc (Masawara) recorded a 167 percent surge in profits to $16,1 million in the full year to December 2014 up from a loss of $10,8 million in the corresponding period, despite declining economic conditions in the country.
"From an operational perspective, the business environment in Zimbabwe has remained difficult," said David Suratgar, Masawara chairman.
"The trend of tightening liquidity witnessed over the past two years has continued and the formal economy has slowed," he added.
The country's economy has been on a declining path since 2013 when the Zanu PF-led government took over – albeit under controversial circumstances – and has been predicted by the International Monetary Fund to grow by less than 2,8 percent this year.
Since then, a number of businesses in Zimbabwe continue to face viability challenges and the frequency of business down-sizing and closure has increased.
Suratgar, however, believes Masawara - owned by businessman Shinagi Mutasa - is poised to register significant growth this year due to various transformational strategies implemented by the Jersey-based group.
"Despite this difficult operating environment, the majority of the group's investments in Zimbabwe are performing well and are maintaining and, in some cases, improving their market positions," he said.
In the period under review, Masawara's regional investments continued to be profitable and accounted for 34 percent of TA Holdings Limited's (TA Holdings) profit before tax.
"The Botswana hospitality business achieved a profit in line with prior year and management are pursuing opportunities for portfolio growth. The insurance investment in Botswana had a difficult year, with profit before tax declining by 64 percent compared to the prior year, primarily as a result of increasing claims and declining investment income," said Suratgar.
He added that various counteractive measures were adopted in this business towards the year end which are expected to enable the business to yield higher returns.
"The Uganda insurance business continues to perform above expectation, with profit before tax increasing by 40 percent compared to the prior year, with further growth expected during the 2015 financial year," said the Masawara boss.
The group, which recently upped its stake in TA Holdings to 100 percent, recorded a $6,2 million profit on disposal of its share in Masawara Energy Mauritius.
Masawara director, Julian Vezey, said following the total acquisition of TA Holdings, the group has embarked on an in-depth strategic review and restructure of its entire portfolio.
"This review will result in the streamlining of activities, consolidation of duplicated functions and, where appropriate, the engagement of strategic technical partners to improve revenues and optimise the operations," he said.
TA Holdings achieved a profit after tax of $9,2 million for the year up from a $5,7 million loss incurred in the prior year.
In the period under review, Masawara's all insurance companies registered growth in gross written premium compared to the prior year, and all companies achieved underwriting profits for the year.
Despite increased levels of competition in the Zimbabwe and outside Zimbabwe hotel markets, the hotels recorded an increase in profitability compared to prior year.
Masawara is an investment company focussed on acquisitions in Zimbabwe and the southern Africa region.
- dailynews
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