First Mutual reports US$27.1 million loss

Rutendo Mazhindu - ZimNow Reporter

First Mutual Holdings Limited (FMHL) has reported a US$27.1 million loss after tax, driven by a US$50.5 million fair value loss on investment properties and distortions from currency adjustments.

The group shifted its functional and reporting currency from Zimbabwe dollars to United States dollars at the beginning of the year, a move that exposed valuation inconsistencies on its investment portfolio and financial statements.

According to total assets fell by 10 percent to US$256.8 million, from US$287 million previously reported. Total equity declined to US$91.5 million from US$115 million.

FMHL Group Chief Executive Officer Douglas Hoto said the currency realignment process had a significant impact on financial performance.

“The conversion to USD reporting reflected the economic reality on the ground but also exposed material distortions, particularly in investment property valuations,” Hoto said in a statement.

The group’s investment property portfolio dropped from US$182 million to US$134 million after independent revaluations in line with international standards.

Insurance contract revenue decreased by 17 percent to US$156.2 million, compared to US$183.4 million previously.

First Mutual Health recorded a 26 percent increase in revenue to US$60.3 million, while profit rose by 31 percent to US$5.8 million.

NicozDiamond Insurance’s revenue grew by 14 percent to US$41.7 million, with profit rising by 89 percent to US$2.4 million.

FMHL’s reinsurance operations in Zimbabwe recorded a US\$0.3 million loss, compared to a profit in the previous period.

The board declared a final dividend of US\$1.2 million, bringing the total dividend to US\$1.8 million.

FMHL Chairman Amos Manzai said the company was working to protect shareholder value despite prevailing economic challenges.

“The operating environment remains complex with exchange rate volatility, high inflation and subdued growth, but our focus on real assets and product relevance will ensure long-term sustainability,” Manzai said.