Published: 10 August 2017

Old Mutual Zimbabwe Limited published a robust set of numbers underpinned by a 175% growth in total revenue to $384.9m.

Despite Gross Premium Written declining by 2% to $100.8m fees income from asset management was significantly higher due a strong stock market. However, on the banking side interest income was suppressed due to the cap imposed by the Reserve Bank of Zimbabwe in 2016. Operating expenses grew by 11% significantly below revenue growth after the company invested in IT infrastructure.

Adjusted Operating Profit (AOP) grew by 11% to $36.8m buoyed by life assurance and asset management profits. AOP includes a smoothed return of 7.5% to remove the noise of stock market volatility associated with IFRS earnings reported at $89.4m, up 614% in H1 17, in line with the long term nature of the business.

The balance sheet grew by 10.5% to $2.4bn. Operating cash flow decreased from $56.8m to $50.3m. The investing section indicates that the company deployed USD63.8m towards both investment securities and PP&E to a small degree.

The company is working on improving alternative investments as evidenced by the recent completion of the Kupinga mini-hydroelectric project. This is a noble idea given that capital markets for alternative assets in Zimbabwe are very thin and we see scope for value preservation and enhancement in this space.  
- BD