First Mutual Holdings Limited recorded a profit of $100 000 million for the year ended 31 December 2015.The profit comes after the company recorded a $5.1 million loss for the same period in 2014.
Addressing delegates at the group’s Annual General Meeting in the capital, Group Chief Executive officer, Mr Douglas Hoto, said the previous financial year was challenging with the Gross Domestic Product (GDP) growth rate being reduced in the National Budget to 1.5% due to underperformance in key sectors like agriculture and mining.
“The operating environment was largely difficult and this affected our operations. A weakened rand and decline in demand were other factors that contributed to our financial status coupled with under-performance from key sectors in the economy such as mining and agriculture,”said Hoto.
He said this deflationary tendency also contributed to the low industry capacity utilization and low uptake of insurance products.
“The group incurred investment losses of $4.7 million in 2015 compared to $3.8 million in 2014. However, we managed to achieve an overall profit $0.1 million for the year compared to a loss of $5.1 million last year,” he said adding that the total comprehensive profit attributes to the equity holders of the parent company was $0.2 million.
Turning to assets, Hoto said the Group total assets declined by 2% from $213.3 million in 2014.The decline was mainly attributed to the fair value loss on investment property of $6.6million, fair value loss of $7.3 million on the listed equity investments portfolio and the $2.6 million impairment of the investment in Rainbow Tourism Group.
“The decline in assets was however, mitigated by net new cash inflows as reflected in the increase in money market and held to maturity investments,” said the CEO.
Driven by the need to conserve cash, Hoto said the Company’s Directors decided that no dividend would be declared for the end of the financial year.
He added that although the operating environment is going to remain challenging, the board is confident that business process efficiencies being implemented, coupled with prudent cost containment measures will position First Mutual Holdings Limited to deliver value to its stakeholders and added that enhanced enterprise risk management initiatives and strict adherence to the actuarial control cycle remain key in mitigating against risks in the operating environment.
