First Mutual says third quarter much stable, posts ZW$341 bln profit

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By Alois Vinga

FIRST Mutual Holdings Limited (FMHL) has described the just ended third quarter economic environment as “stable” owing to policy measures employed by monetary authorities on the back of recording a ZW$341 billion profit.

Presenting a trading update for the nine months period ended September 30 2023, FMHL said compared to the first two quarterly periods of the year, the third one recorded significant improvement.

“The operating environment was stable during Q3 2023 following policy intervention measures instituted by the Government to tackle price and exchange rate volatility. The measures resulted in stable market conditions though the gap between the official and parallel rates is now increasing.

“The Bank Policy rate stood at 150% as of September 2023 while the official exchange rate, which was at USD1:ZWL5 769 at the beginning of the quarter, closed at USD1:ZWL5 467,” said the group.

FMHL also observed that according to the Total Consumption Poverty Line (TCPL), local currency year-on-year inflation peaked in June 2023 when it registered 394,8% but has since receded to 249,7% in September 2023 with the third quarter inflation standing at  139,1% from a quarterly inflation movement of 208.4% in Q2 2023.

Over the nine months period, the business generated a profit amounting to ZWL341 billion in inflation adjusted terms representing a growth of 647% compared to the previous year.

In historical cost terms, the profit for the period amounted to ZWL439.3 billion representing a growth of 6,623% from prior year performance.

The insurance service result declined by 66% to $13.1 billion compared to the prior year attributable to the impact of continuous ZWL depreciation on US$ business with US$ premiums being translated at the beginning of the cover period and the US$ claims emerging at the later stages.

Rental income for the period ended 30 September 2023 grew by 200% to ZWL18.2 billion in inflation adjusted terms and by 969% to ZWL 13 billion in historical cost terms.

Total assets grew by 104% to ZWL1.3 trillion from ZWL635.6 billion in December 2022 in inflation adjusted terms (in historical costs terms the total assets stood at ZWL1.25 trillion representing a growth of 549% from 31 December 2022.