FIRST Mutual Holdings Limited (FMHL) recorded a 44% decline in profit for the quarter ended March 31, 2025 on the back of bearish market conditions on the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) during the quarter.
The business, which recorded a US$2,3 million for the quarter, said it, however, recorded marginal increases in all other its business unit’s.
In its trading update for the quarter, the firm said despite the fall in profitability, the group recorded a 17% increase in insurance contract revenue (ICR) to US$41,7 million, supported by strong policyholder confidence.
“The business recorded a profit of US$2,3 million for the quarter ended March 31, 2025, representing a 44% decline compared to the prior year,” FMHL said.
“The decrease was primarily attributable to bearish market conditions on the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) during the quarter.”
The weak performance comes amid rising inflation and tightening liquidity in the formal economy, which continues to lose ground to the expanding informal sector.
Foreign currency business (USD, BWP and MZN) accounted for 82% of the consolidated ICR, reinforcing the group’s growing USD-based underwriting base.
FMHL’s insurance service result, however, edged up by just 2% to US$4,7 million, as claims rose faster than revenue growth.
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“The consolidated insurance contract revenue for the period ended March 31, 2025 was US$41,7 million, reflecting a 17% increase compared to the prior year. This growth was driven by sustained customer confidence in the group’s insurance offerings,” FMHL said.
On the property front, the group posted rental income of US$2 million for the quarter, a 7% year-on-year increase, largely driven by upward reviews in rental rates.
However, occupancy levels slipped to 86,49% from 88,78% in the prior year due to recently completed developments that remain partially vacant.
“Rental income for the quarter ended 31 March 2025 grew by 7% to US$2 million, mainly driven by rental rate reviews,” FMHL said.
“The occupancy levels declined to 86,49% from 88,78% in the prior year as a result of recently completed properties yet to be fully occupied.”
The group’s financial performance unfolded against a challenging macroeconomic backdrop, with Zimbabwe’s USD inflation spiking to 11,5% in January 2025 following the Zimbabwe Revenue Authority’s enforcement of taxes and excise duties at border posts.
Inflation then cooled to 0,2% in February and 0,1% in March, resulting in a quarterly average of 11,9%.
In contrast, Zimbabwe’s local currency (ZiG) inflation was contained at 10,9% during the same period, supported by tight monetary policy and relative exchange rate stability.
FMHL highlighted that while short-term macroeconomic stability has returned, the formal business sector remains under strain from high compliance costs and a heavy regulatory burden.
“Despite the current short-term stability, businesses continue to lose ground to the expanding informal sector due to the high cost of compliance and excessive regulatory burdens,” it said.
“In response, the government, through the Ministry of Finance, has announced plans for a comprehensive review of existing taxes, business fees, and licensing requirements.”
