Zimre Holdings attains Prescribed Asset Status

Zim Now Writer

Zimre Holdings Limited has reported that the group’s Eagle Reals Estate Investment Trust attained Prescribed Asset Status from the Insurance and Pensions Commission of Zimbabwe.

It is anticipated that the Eagle REIT will bring much needed liquidity to the real estate market especially for the country's pensions community.

Prescribed Assets are bonds or securities issued by government, local government, quasi-government organisation or any other bond that may be accorded the prescribed status.

ZHL chairman, Desmond Matete said ZHL is determined to bring high-impact sustainable investment opportunities to the public.

“Despite experiencing a turbulent year, the group is optimistic of a better year, with the group’s strategy remaining anchored on delivering a strong cash wallet driving a cost-effective insurance float through momentum and scale.

“Increasing the contribution from our regional investments by upscaling their balance sheet and effective deployment of competitive capital across all business units,” he said.

In its financial report for the year ended December 31, 2023, the group reported a strong position with real growth total assets and excellent cash generation, with the Group’s total assets uplifted by 81% to ZWL$1 1802.2 billion from ZWL$650.5 billion in inflation adjusted terms.

Historical cost total assets grew by 769% to ZWL$1 151.6 billion from ZWL$132.5 billion buoyed by growth in investment properties and equity investments which constituted 70% of total assets.

The Group’s healthy balance sheet position is evidence of its resilience and commitment to provide its stakeholders with security, growth and profitability.

Net cash generated from operating activities increased to ZWL$147.7 billion compared to ZWL$81.1 in 2022, resulting in net cash generated to operating profit ratio of 1.42 times, an improvement from 0.93 times.

The cash generated has been directed to build up the cash wallet for the group for future growth.

Positive cash flows were generated from operations mainly due to writing collectible business from quality cedants and clients, as well as the strengthening of the credit control function in most key business units.

Matete described the year under review as both challenging and rewarding for the group.

“Global economic performance was adversely affected by a myriad of factors, notable among them being the impact of high inflation on the cost of living, increase in the debt burden due to the resultant high interest rates, reduction of fiscal support and extreme weather events due to climate change.

“Whilst the Zimbabwean and regional business environments were consequently marked with low economic growth, the group remained resilient and recorded growth in real terms, retaining value for its various stakeholders.

“The business environment was characterised by exchange rate volatility, rising inflation, liquidity shortages and power outages resulting in a significant spike in operating and production costs,” he said.

In Insurance contract revenue, the group experienced an increase of 140%, reaching ZWL$255.0 billion from ZWL$106.4 billion. Under historical cost, an even more impressive growth of 779% was achieved with revenue surging from ZWL$16.8 billion to ZWL$147.5 billion compared to the same period in the previous year.

The growth is attributed to the group’s local reinsurance and pensions business operations, which collectively contributed 78% to the total premiums written during the year.

The group demonstrated a strong ability to generate new sales in tough operating environments, with the value of new business increasing to 29% during the year.

In insurance service, the group achieved a 321% increase compared to the prior year from ZWL$18.4 billion to ZWL$77.5 billion in inflation adjusted terms as a result, real growth in topline for all insurance entities and a slower growth of 62% in direct insurance service expenses from ZWL$107.7 billion to ZWL$174.8 billion.