TA half-year profit up

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ZIMBABWE Stock Exchange-listed diversified concern TA Holdings’ after-tax profit for the six months to June rose to $2,7 million from nearly $1 million driven by a decline in net claims and fair value adjustments.

ACTING BUSINESS EDITOR

Despite reporting a decline in net earned premium, net claims reduced to $8,7 million from $9,2 million.

Finance costs also fell to $314 000 from $469 000.

TA has interests in insurance, agrochemicals and the hospitality industry. The group’s hotel business was weighed down by operating costs relating to the refurbishment of a new local hotel which was acquired last year.

Cresta Marakanelo of Botswana, in which the group has a 35% interest, performed well as a result of improved revenue per available room.

“The company had a 43% decline in gross written premiums mainly due to a deliberate move to reduce participation in underwriting farming business as a result of high claims encountered in 2012,” the company said.

“The reinsurance ratio increased as a result of the mix of business which was skewed towards fire and engineering class which have high retrocession ratios. Consequently, underwriting result was breakeven.”

Gross written premiums increased by 15% compared to the same period last year and net written premiums went up by 42%.

However, the increase in claims ratio to 37% from 32% last year resulted in the company recording a 9% decline in underwriting profits.

Claims increases were mainly in the motor class of business.

Turning to Zimbabwe Fertiliser Company, the group said: “Challenges in recovering debts from its customers incurred in the previous seasons had put pressure on working capital resulting in a rise in both finance charges and debtors impairments.

“The company continues to streamline its operations to adapt to the current economic environment, and is forecasting to return to profitability by the end of the financial year.”

The group also reported that although Sable Chemicals recorded an improvement in both ammonia and ammonia nitrate production compared to the same period last year, production for the current period under review was affected by a scheduled tri-annual maintenance shutdown in May as well as liquidity constraints.