Old Mutual sees profit after tax


BY Business reporter

OLD Mutual Zimbabwe (OMZ) registered a profit after tax of $4,32 billion in the half year ended June 30, 2020, on an inflation-adjusted basis, attributable to a 65% increase in non-banking investment income.

The increased profit after tax was from $519,1 million recorded at the end of the half year ended June 30, 2019.

In the abridged interim unaudited financial statements of OMZ for the period under review released yesterday, the financial giant’s chairman Johannes Gawaxab said despite economic and COVID-19 challenges, the group remained focused on building a strong brand.

“There was a general decline in the level of business activity registered since the onset of the COVID-19-induced lockdown,” he said.

“COVID-19 also had an impact on the alternative investments and private equity deal pipeline. A number of projects in this portfolio had to be deferred.”

The increase in non-banking investment income was from property belonging to the group and fair value gains through profit or loss on financial assets.

The result of the increase saw total revenue rise nearly 57% to $35,52 billion in the period under review from a 2019 comparative of $22,63 billion.

Despite the increase in revenue, there was also an increase in expenses, specifically net claims incurred of $24,82 billion, a figure derived after deducting reinsurance recoveries.

In the 2019 comparative, net claims incurred were nearly $15 billion.

Total assets also grew to $62,1 billion in the period under review driven by gains in property, investment and securities as well as “other assets”.

The increase in assets was from a 2019 comparative of $41,85 billion.

In terms of equity, OMZ saw this increase to $11,5 billion in the period under review, up from $6,1 billion in the comparative 2019 period.

However, future profits from equities will be weighed down going forward as OMZ shares remain suspended from the main bourse. This is owing to suspicions from the government that the fungibility nature of OMZ shares was being used to proffer the parallel foreign currency market rates.

“Engagements are under way to establish arrangements that would allow the fungible stocks to also resume trading,” Gawaxab said.

He said OMZ business units supported key economic sectors through financing and other financial service activities which covers energy, foreign currency generation and import substitution in agricultural activities, mining, horticulture, and tourism.

“The operating environment remains difficult and it requires increased levels of collaboration and mutual understanding between the business sector and government in charting a path to recover and grow out of the current economic situation,” he said.

“We support a zero-tolerance approach to corruption and financial mismanagement as well as the continued efforts at international re-engagement and reintegration into global capital markets, without which attempts at economic recovery cannot be sustained.”