HARARE, September 28 (The Source) – Fidelity Life Assurance’s after tax profit doubled to $1,98 million in the six months to June from $985,253 in the comparable period last year driven by investment income and cost containment.
Revenue increased by 18 percent to $13,1 million from $11,1 million in the same period last year buoyed by interest income from the sale of residential stands and an increase in the group’s equity portfolio following the bull run on the local bourse.
Net premium fell 28 percent to $6,1 million on poor remittances by policyholders.
“This is explained by non remittance of premiums by some policyholders as well as discontinuance of some product lines on account of unfavourable actuarial projections,” chair Fungai Ruwende said in a statement accompanying the group’s financial results.
Operating and administrative expenses declined to $786,874 from $857,200 in the comparable period last year.
The group’s operating profit doubled to $2 million in the period.
The group’s flagship company, Fidelity Assurance reported a 14 increase in revenue to $9,5 million from $8,3 million in the same period last year, despite a decline in net premiums to $4,48 million from $7,6 million. The company also reported a 160 percent increase in after tax profit to $1,3 million from $500,000 in the comparable period last year driven by investment income and cost containment.
The group’s Malawi subsidiary, Vanguard life assurance recorded an increase in net premium to $1,6 million from $1,1 million in the comparable period last year on the back of acquisition of new schemes and a surge in individual life policy intake.
Fidelity total assets increased to $115,4 million from $112,6 million previously.
Borrowings were reduced by 11 percent to $26,1 million from $29,3 million in the same period last year.
Ruwende said the group will focus on debt reduction initiatives so as to allow the company to carry optimum levels of debt on the balance sheet.
The company did not declare a dividend, citing the need to conserve cash for projects funding and maintaining liquidity.