CHAIRMAN’S STATEMENT
ECONOMIC OVERVIEW
Zimbabwe’s Gross Domestic Product is expected to decline by 2.1% in 2019 according to the Ministry of Finance and Economic Development (MoF). The first half of the year saw the introduction of ZWL in the basket of currencies together with the floating of the USD/ZWL exchange rate in February 2019. In June 2019, the multicurrency system was abolished, paving way for the Zimbabwe dollar as the sole legal tender. Although the three-tier pricing regime has technically disappeared from the market, foreign currency challenges persisted throughout the first half of the year. Despite the budget surplus achieved, improved trade balance together with tight monetary control by the Reserve Bank of Zimbabwe (”RBZ”), inflation continued on an upward trend closing the period at 175.66%. The Zimbabwe Stock Exchange (”ZSE”) traded in the positive to 30 June 2019 with the mainstream Industrial Index registering a year to date growth of 40%. Price distortions, power and fuel shortages, have hampered economic recovery. The financial sector remains illiquid due to austerity measures introduced by the authorities including the recent hike of interest rates to deter activities on the parallel market. Rentals remained constrained in the property sector with marginal increases in some properties in the Central Business District (”CBD”).
Financial Performance
The business achieved strong growth in Gross Premium Written (GPW) but experienced pressure in operating costs due to persistent inflationary conditions.
GPW for the period at $157.6 million, was 86% higher than 2018. The growth is a result of conversion of USD business for the period 1 January 2019 to 24 June 2019 written by some of First Mutual Strategic business Units (SBUs) whereas last year it was USD 1 : ZWL 1. Also contributing to strong growth was the organic growth and acquisition of new business both in USD and ZWL…
OUTLOOK
The fiscal and monetary authorities have put in place measures to address the challenges being faced by the nation, which include foreign currency challenges, power shortages, trade balances and fiscal deficit. The Group remains in a strong financial position and is prepared to take a proactive role in economic development and position itself to take advantage of opportunities arising from measures being put in place.
DIRECTORATE
Mr J Sekeso resigned from the Board on 7 February 2019. His valuable contribution to the Board is appreciated.
DIVIDEND
At a meeting held on 30 August 2019, the Board resolved that an interim dividend of ZWL 1.5 million, being 21 ZWL cents per share be declared from the profits of the Group for the half year ended 30 June 2019. The dividend will be payable on or about 27 September 2019 to all shareholders for the Company registered on close of business on 20 September 2019. The shares of the company will be traded cum-dividend on the ZSE up to 17 September 2019 and ex-dividend as from 18 September 2019.
APPRECIATION
On behalf of the Board, I would like to extend my gratitude to all employees for a strong performance in the current economic environment. In addition, my appreciation goes to fellow Board members, Customers, Regulators and other stakeholders for their contribution to Group efforts.
Oliver Mtasa
Chairman
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