FMHL declares first dividend

HARARE - First Mutual Holdings Limited (First Mutual) has declared its first dividend of $0,01 per share since dollarisation in 2009.

This comes as most companies have struggled to pay dividends following adoption of the multi-currency system,  dominated by the US dollar, as they found the going tough.

The group’s chief executive Douglas Hoto said plans were underway to sustain dividend pay outs into the future.

“We will be paying out nearly $400 000 in dividends and we don’t want it to be a once off thing.

“From our projections we are quite confident that we will be able to continue paying dividends in the foreseeable future,” he said.

First Mutual, which recently rebranded from Africa First Renaissance Corporation to bury its troubled past and improve visibility, has made significant strides to reposition itself among the top insurance firms in the country.

In the year to December 2013, the listed insurance group’s gross written premium rose by 14 percent to $101,1 million compared to $88,6 million recorded in the prior period.

“We achieved this growth on the back of improved performance across the group, with health, life and short term reinsurance businesses being the major contributors in absolute terms,” said Hoto.

During the period under review, rental income grew by 6,8 percent from $7,3 million in 2012 to $7,8 million driven by an increase in the contribution of turnover-based rental income.

Hoto noted that the limited overall economic growth constrained the property market leading to low demand for office and conventional industrial space.

“The property market continues to face challenges with limited property transactions being recorded especially in residential stands and low value properties,” he said.

“The year-on-year attributable profit declined mainly due to the higher claims ratio for the health insurance business and the adoption of a more prudent approach to technical reserves following the introduction of the actuarial control during the year,” he added.

First Mutual’s total income in the full year to December rose by 22 percent from $93 million in 2012 to $113 million, while profit after tax declined by 55,6 percent to $5,9 million from $13,4 million registered in the comparable period.

The group’s total assets also grew to $205 million from $176 million, showing an increase of 16,4 percent.

“Going forward, the group will improve risk management through enforcing the actuarial control cycle, active management of trade receivable and continuously reviewing the product portfolio to keep the products relevant and affordable,” said Hoto.

“The group will continue with its stringent risk assessment approach for money market investments with deposits being placed with stable banking counter parties and equity investments being made into entities that are considered resilient.”

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