Nicoz operating profit down 35pc

HARARE - Listed short-term insurer Nicoz Diamond (Nicoz) operating profit for the half-year to June 30, slumped 35 percent to $1,2 million compared to prior period on the back of higher growth claims and operating expenses of 45 percent.

In a statement accompanying the group’s financials for the period under review, Nicoz chairman Albert Nduna also said group profit after tax for the period amounted to $1,3 million  an increase of 71 percent on comparative period.

“This was a decline of 35 percent from June 2014 attributable to the higher growth of claims and operating expenses of 45 percent when compared to total revenue growth of 30 percent

“Though there was an increase in gross premiums of 42 percent which was mainly attributed to the incorporation of the premiums from the Malawi subsidiary, the Zimbabwean entity recorded a commendable growth of 6 percent compared to June 2014,” he said.

Profit before tax for the group amounted to $1,6 million inclusive of share of losses from the group’s associates amounting to $589 — an increase of 30 percent from prior year despite the reduction in operating profits.

Nduna also said claims and operating expenses declined three percent before incorporating the Malawi subsidiary.

According to Nduna, profits from insurance underwriting amounted to $694 215, a decline of 39 percent from prior year.

“The Zimbabwean entity’s underwriting profit declined by 54 percent compared to prior year due to the long term nature of policies written in the period which had a high portion of unearned premium.

“The Malawi operation contributed negatively to underwriting profit because of an increase in claims experienced in the period. The Uganda operation had a slight positive contribution to underwriting profits,” said Nduna.

The listed short-term insurer’s income from properties and other investments contributed the balance of $532 747 to operating profit, a 22 percent slump on prior contribution in prior year owing to reduced occupancy at the properties as well as lower average returns on the other investments.

This is because included under other gains is an unrealised gain of $462 609 recognised on purchase of the Malawi operation.

“Though some of the associates were still in loss positions at June 2015, this had significantly reduced from prior periods, particularly relating to the new entity in Mozambique which is performing according to expectations of a start-up entity and is expected to start breaking even in the third year of trading,” he said.

 

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