Financial services group, Zimre Holdings Limited (ZHL) narrowed its loss for 2016 to $2,2 million from $23,1 million in the same period in 2015 on the back of increased business retention and favourable claims experience.
BY TATIRA ZWINOIRA
It also attributed the narrowing of the loss to restructuring and cost cutting measures and a reduction in share losses from associates.
In a statement accompanying the company’s financial results, board chairman Benjamin Kumalo said the tight liquidity position presented challenges to the group for the year under review.
“The tight liquidity situation resulted in challenges in premium and rental collections with downstream negative effects on the growth of investment income,” he said.
“The group has made significant progress in turning around the performance of the business following recapitalisation and restructuring with attendant improvements in business confidence and credit ratings. The group is now positioned to register sustainable profits in all its key operation.”
The loss comes as total income was down 14% to $28,1 million in 2016 from the 2015 figures due to a decline in gross premium written from reinsurance .
As such, net premium earnings during the period contributed 77% to total income which was a decline of 8% due to obtaining soft domestic insurance market and weak regional currencies.
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Kumalo said rental income contributed 11% to the total income which was $3,1 million but was below the 2015 level by 10%.
“The negative growth was attributed to the weak domestic economy which manifested in high void levels and downward pressure on rental rates,” he said.
Part of the restructuring in the group will involve adopting fixed term contracts for executive staff and adopting the total cost to employer remuneration system in 2016.
Future endeavours from ZHL will include capitalising on the removal of sanctions which has opened potential for new lines of credit for the group.
Kumalo said the group would be seeking to create an expansive and diversified group with a strong foothold in regional markets.
“Measures to preserve capital drive performance and achieve sustainable growth and profitability will continue to be implemented. The group has now been appropriately realigned and restructured to have lean and focused operating structures,” he said.
