HARARE – Zimbabwe Stock Exchange-listed diversified concern, Zimre, is planning to list its subsidiary Emeritus International Reinsurance Company (Emeritus) in Botswana.
The group’s chief executive, Stan Kudenga, said exchange controls
approvals for the setting up of Emeritus — an offshore company registered in Botswana — have already been obtained.
“Restructuring of the shareholding that will result in all the group reinsurance operations being owned by and rebranded to Emeritus…is in progress,” he said, adding that Zimre will use Emeritus as a vehicle to mobilise international capital required to further strengthen regional operations, enhance credit ratings and advance the group’s domestic and regional footprint.
“The group’s long-term plans are to list Emeritus…on the Botswana Stock Exchange,” Kudenga told shareholders attending the company’s annual general meeting yesterday.
The latest development also comes at a time Zimre has been given the greenlight by the central bank to disinvest from Continental Re Nigeria and use the proceeds to recapitalise Mozambique Reinsurance Company. Meanwhile, Kudenga said Zimre nearly doubled its first quarter profits due to improved performance from associate companies.
“The group delivered significantly improved bottom line performance in the 2017 first quarter where profit increased by 48 percent to $1,35 million compared to $0,9 million in the same period in 2016.
“The improved performance was mainly attributed to focus on prudent and selective underwriting, continued recovery at Baobab Re and subdued claims experienced across most of the group’s reinsurance operations,” he said.
However, despite an improved profit performance, the group’s revenue declined by 13 percent to $6,52 million. Kudenga further indicated that in terms of country contribution to the group total revenue by the end of the first quarter, Zimbabwe had the highest contribution at 62 percent followed by Malawi at 13 percent, with Zambia and Mozambique contributing 10 percent and five percent each, respectively.
“The total revenue achieved in the first quarter was below expectations mainly due to the soft domestic insurance market and the impact of the loss of value of the regional currencies against the United States dollar,” he said.
“The turnaround and momentum gained in performance in the first quarter has been sustained in the second quarter,” Kudenga added.
The Zimre bosses also noted that the capital base of the group’s local reinsurance operations were now approaching regional and international parity.
“Ongoing measures to grow and strengthen regional reinsurance operations, manage and align costs to revenue as well as effective leveraging on group assets to improve return on investment are expected to result in profitable business growth for Zimre in 2017,” Kudenga said.