CONGLOMERATE, TA Holdings has posted a loss of $5,6 million for the year ended 31 December weighed down by its local investments.
The local investments recorded a $11,2 million loss for the period under review compared to the $5,5 million profit from outside investments.
Last week the group issued a profit warning on the loss citing an impairment charge of $13 million against its troubled agrochemicals subsidiary Sable Chemical.
“The impairment arose due to uncertainty over future returns to be realised by the group from this investment,” the group said in a statement accompanying its results on Tuesday.
The five percent increase in profit before tax by investments outside Zimbabwe was attributed to improved underwriting performance at Lion Assurance Company in Uganda where underwriting profit grew by 153 percent to $0.6 million.
The group also recorded a 53 percent growth in investment income at the Botswana Insurance Company to $4,6 million.
Group income grew to $76 million from $72 million in 2012.
TA achieved a 126 percent increase in headline earnings per share to 2.15 cents per share in 2013 driven by 731 percent increase in profit before tax achieved by local investments although no dividends were declared.
Total expenses stood at $66 million from $64 million in the previous year.
Group borrowings increased to $8 million from $6.4 million last year attributed to an increase in borrowings by Cresta Zimbabwe of $1,5 million to fund the opening of Cresta Sprayview in Victoria Falls and the refurbishment of Cresta Loge Harare.
The group’s assets totalled 156 million up from 153 million in 2012 while liabilities went up to $95 million from $84 million in the prior year.
Going forward the group anticipates a growth in the insurance sector and continues to target profitable business channels, and an aggressive focus on cost containment and reduction.
“Growth in investment income will be linked to returns prevailing in the Zimbabwe investment market as a whole. Results recorded so far for 2014 indicate growth of premiums and profits for our insurance sector,” the company said.
Turning to the hotels, the group said tight liquidity had resulted in falling occupancies and room rates. The final phase of Cresta Lodge refurbishment had been suspended until trading conditions improved.Advertisement
At Sable, the group said finalization of a viable electricity tariff would enable the company to complete refurbishment of its plant to return it to its installed capacity.
Strict credit control policies had enabled Sable to lower its level of debt and reduce finance costs with the group anticipating the trend to continue in the forthcoming year.
Turning to outside investments, the group said Botswana Insurance Company had employed strategies to enable the company to retain market share and increase profitability despite competition.
At Lion Assurance Company in Uganda, the market share that characterised the previous year is expected to continue.
At Cresta Marakanelo, the company expects to retain market share at its hotels in Gaborone to drive revenue and profitability in 2014.
Discussions are at an advanced stage for the company to lease a new hotel and conference centre in Botswana with construction expected to start in the third quarter of this year.