ZIMRE Holdings (Zimre) says it is looking forward to working closely with Mutapa Sovereign Wealth Fund (Mutapa) in its pursuit of initiatives that seek to yield considerable return on investment from agri-business firm, CFI Holdings.
The National Social Security Authority (NSSA) and Zimre have a 38,91 percent shareholding in CFI held through Stalap Investments making them joint-largest shareholders in the agri-business firm.
Mutapa recently acquired a controlling stake in Zimre after securing 33,8 percent from Day River Corporation, through which businessman Hamish Rudland controlled Zimre.
Zimre has not been able to execute meaningful initiatives to turnaround CFI owing to its failure to acquire sufficient votes on proposed resolutions which it now hopes the coming in of Mutapa will enable them to team up and secure enough votes.
ZHL group chief executive officer, Stanley Kudenga
“One asset that needs resolution is CFI. As you remember, we are also significant investors in CFI through Stalap, which we own jointly with NSSA. There hasn’t been any movement and we are hoping that the coming onboard of Mutapa as well into the picture will then work together to make sure that we realise that investment one way or another,” Zimre group chief executive officer Stanley Kudenga told The Financial Gazette on the side-lines of the company’s analyst briefing.
In 2018, Zimre was identified as the government’s sleeping partner in the troubled public bus company Zupco.
Prior to selling its portion of Zupco in 2022 to the government, Zimre owned 49 percent of the company.
“We managed to secure resolutions with the government; they bought us out; I think it was in 2022 for almost US$1,5 million and they paid,” said Kudenga.
The takeover of Rudland’s controlling stake in Zimre was one of the mergers and acquisitions that the Competition and Tariff Commission approved in 2023.
In its financial results statement for the year ended December 31,2023, Zimre’s insurance contract revenue grew 140 percent to $255 billion anchored by the local reinsurance and pensions business operations, which collectively contributed 78 percent to the total premiums written during the year.
However, it said premium income growth was primarily driven by the expansion into new markets, the introduction of innovative product offerings and increased new product acceptance by the market.
Consolidation of the group’s reinsurance cluster has entered its final phase following approval of the amalgamation of Emeritus Reinsurance Botswana into Emeritus International Reinsurance.
This is expected to attract additional capital to the regional units.
Insurance service results increased by 321 percent compared to the prior year, from $18,4 billion to $77,5 billion in inflation adjusted terms. As a result, there was real growth in top-line for all insurance entities and a slower growth of 62 percent in direct insurance service expenses, from $107.7 billion to $174.8 billion.
The group’s total income for the year was $357.6 billion in inflation adjusted terms compared to $182.4 billion achieved in the prior year 2022, representing an increase of 96 percent.
Net investment income increased by 85 percent from $62,1 billion to $114,7billion.
The real estate business also contributed to total income growth by exhibiting significant growth in rental income, with a 138 percent increase anchored by the conversion of ZWL leases to USD-indexed leases, regular rent reviews on leased properties and good quality tenant profile.
The average occupancy level was 92 percent.
The group’s local operations recorded increased volumes of foreign currency-denominated income during the year at 84 percent compared to 35 percent a year earlier as business operations shifted significantly from local to foreign currency to preserve value for its stakeholders.
As a result, profit for the year of $304,9 billion was achieved, up 321 percent from $72,4 billion in 2022.
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