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NicozDiamond records slump in profit

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NICOZDIAMOND has recorded a slump in profit to $1,1 million for the year ended December 2014 as compared to $2,3 million in 2013 due to impairments of investments whose recoverability was viewed to be doubtful.

BY TARISAI MANDIZHA

Gross premium written declined to $28,7 million from $30 million in 2013, while operating profit grew to $2,3 million as compared to $1,9 million in 2013.

In a statement accompanying the short-term insurer’s financial results, board chairperson Albert Nduna said the group performed relatively well despite the aforementioned challenges with overall profitability at $1,1 million for the year, while there was growth in operating profit of 17%.

He said investment performance as well as the contribution of associates declined, resulting in a reduction in overall profitability by 52% from that of 2013.

“The growth in operating profit was driven by the insurance underwriting result that grew by 45% from $892 000 in 2013 to $1,3 million in 2014.

Investment performance for the year was weighed down by impairments of investments whose recoverability was viewed to be doubtful as at December 31 2014. There were also impairments on some unquoted equities and unrealised losses on the quoted equities portfolio,” Nduna said.

Domestic insurance business contributed 88% to profit before share of associates, followed by the property companies which contributed 11% and the Uganda operation contributed 1%.

“The associate companies contributed negatively and took away 28% from the group’s profit. Diamond Seguros, the new operation in Mozambique, was accounted for as an associate for the first time in the year and recorded a loss as expected. Though the performance of other associates, Fidelity Funeral Services and Clover Leaf Panel Beaters were improved, they also had to be impaired in the year to align to their net asset values in line with accounting standards,” Nduna said.

He added that the group generated positive cash from operations of $2 million which was growth of 43% compared to the prior year, emanating from the strong focus management of cash flow and expenditure.

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