First Mutual makes five-fold profit

First Mutual Holdings’ net profit grew nearly five-fold, to $2.6 million from $442 000 in the six months to June as a result of cost containment measures and strict management of claims, the company said today.

Operating profit stood at $4.9 million compared to $1.8 million last year, largely due to lower claims in the insurance business and a $900 000 reduction in administrative expenses.

Total Gross Premium Written (GPW) marginally increased to $60.6 million from $60.2 million driven by positive performance from the health, life assurance and pension business segments.

Health insurance GPW stood at $26 million compared to $25 million last year while the life assurance registered an 18 percent increase in GPW to $18.4 million.

The group’s subsidiary Pearl Properties registered a 2 percent decline in revenue from $4.3 million to $4.2 million in the six month period as rental income fell 5 percent to $4 million.

The decrease was driven by a decline in the occupancy level and reduced rental income across the property portfolio.

Tenant arrears were at $2.4 million compared to $2.6 million last year while occupancy levels were down from 77 percent to 72 percent with voids occurring largely within the central business district.

In a statement accompanying company results chairman Oliver Mtasa said a valuation of the investment property portfolio had resulted in a fair value loss of $3.7 million to $118.5 million.

“The impairment is driven by rising vacancies that have added pressure on rentals, increasing tenant defaults and an illiquid property sales market.

The group’s assets marginally grew to $212.6 million from $209 million. The board did not declare dividends.-The Source

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