Fidelity H1 profit falls 66 pct on finance costs

Fidelity H1 profit  falls 66 pct on finance costs

HARARE, September 27 (The Source) – Fidelity Life Assurance reported a 66 percent decline in after tax profit from $2, 9 million to $985 000 in the six months to June weighed down by an increase in finance costs and claims.

The company’s borrowings doubled from $13, 3 million to $26,7 million after it assumed CFI Holding Limited’s bank loans amounting to $16 million last year when it acquired Langford Estates – a 834-hectare piece of undeveloped urban land located in Harare South in a land-for-debt swap arrangement.

Finance costs in the half year period jumped to $857,000 from $78,000 last year. The group posted an operating profit of $2, 1 million compared to $3, 3 million achieved last year.

“This level of performance was due to an industry wide surge in claims attributable to massive retrenchments and other challenges bedevilling the economy. In all there was a 171 percent rise in claims and benefits payments in the period under review,” said chairman Fungai Ruwende in statement accompanying company results on Tuesday.

The group’s total income closed the period at $1, 4 million down from $1, 8 million.

“The year 2016 is expected to remain challenging. For the core business we remain focused on cost control, business acquisition and retention of existing clients.”

Gross premium income was 4 percent down to $8,7 million.

Basic earnings per share was down from 2,77 cents to 0,93 cents.