Regional operations spur Zimre

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A RESURGENCE at Zimre Property Investments (ZPI) and growth in regional operations spurred ZIMRE Holdings (Zimre)’s performance in 2019.

Despite a challenging macro-economic environment in Zimbabwe characterised by, among other things, a rapidly depreciating local currency the group ended the year with a profit of 10 million on an inflation adjusted basis, a marked improvement from a loss of 23 million in the prior year. Profitability in 2019 was driven by the significant property revaluations following the change in functional currency, the growth in reinsurance business which was more pronounced in the Mozambican operation, and the release of high value rental space and stand sales at ZPI,” Benjamin Kumalo, Zimre’s board chairman said in a comment accompanying the group’s results for the year ended December 31, 2019.

On a historical cost basis, the company recorded a profit of 419 million, up from 3, million in 201, driven by the return to profitability at and increased contributions from the group’s associates, property and foreign currency revaluations following the change of functional currency”. The results show that the company’s total inflation adjusted income was up 140 percent from 241 million in the prior year to 0 million, and this was attributed to improved contribution of the regional businesses of 60 percent compared to 55 percent in 201, commissioning of ZPIs Sawanga Mall in Victoria Falls and Nicoz House for student accommodation in Bulawayo.

The company’s inflation adjusted comprehensive income for the year was 290 million, a 1 313 percent improvement on the ination adjusted prior year loss of 24 million. Kumalo said the growth was attributed to the exchange differences on the translation of foreign operations, fair value gains on financial assets, share of comprehensive income from associates and gains on property and equipment revaluations. The gains reect the hidden values that existed before the change of functional currency where a rate of 1:1 against the US dollar was applied before the introduction of the interbank rate in February 2019,” he said.

The group’s total assets closed the period under review at 1,13 billion compared to 700 million on an inflation adjusted basis. Kumalo said these gains too were against the backdrop of the revaluation of investment properties and other non-monetary assets. Further, shareholders funds were closed at 93 million on an inflation adjusted basis, compared to 37 million in the prior year. Kumalo said these gains were on the back of the profitability recorded, revaluation of properties, acquisition of additional stake in ZPI and the change of functional currency. newsdesk@fingaz.co.zw