TA Holdings Limited managed to return to profitability in the year ending December 31 after it posted a profit after tax of $6,2 million compared to a loss of $5,1 million during the same period in 2010.
Although the group’s cluster investments all reported improvements in performance, the growth in earnings was mainly attributed to increase in underwriting results in insurance.
“The business models at all groups in Zimbabwe insurance business were restructured to reduce the high levels of reinsurance, reviewing the quality of business retained and matching of costs to revenues,” the group said.
“In this regard an amount of $804 000 in retrenchment costs were incurred at Zimnat Lion Insurance.”
The group recorded a top line of $62 million compared to $52 million the previous year.
TA Holdings’ insurance business recorded a profit after tax of $9,1 million compared to $3,3 million.
The group said the main features for this business performance were “an improved mix of business with better risk profiles resulting in lower claims ratio and consequently an improved underwriting outcome.
However, retrenchment costs of $804 000 resulted in an underwriting loss for the year.
Investment income also declined during the year due to lower fair value gains on the company’s equity investments.
The hotel business recorded a profit of $1,1 million.
The group’s agro-chemicals division, Sable Chemicals, production volumes were 8% below last year’s figure due to shortages of power as the company was subjected to periodic load shedding.
“This reduced the company’s ability to manufacture ammonia, the principal feedstock for making ammonium nitrate fertiliser.
“As a consequence, the company did not have sufficient working capital to import the required ammonia to augment local production,” the group said.
Zimbabwe Fertiliser Company production was constrained due to tight liquidity conditions resulting in the company being unable to secure inputs needed to make compound fertilisers.