TA profit up 861%

TA Holdings, which has just completed its restructuring exercise to focus on business with high growth potential, high margins and currency hedging, saw its net profit soar by 861 percent in the first half of this year.

Its profit to June stood at $2.7 billion, up from $276.9 million during the first half of last year. Its net profit for the year ending December was $1.2 billion. Sales were up 320 percent from $5.2 billion to $21.1billion.

It says 60 percent of the revenue was generated by Zimnat Lion Insurance Company whose gross written premium increased by 350 percent to $12.3 billion. It says growth in gross premium came from motor and commercial classes with personal lines contributing 20 percent.

There was an increase in the number of policies while some of the growth was from inflation. The company says although there was an increase in claims due to increased burglaries and third party motor claims these were manageable. Investment income grew by 459 percent largely due to the buoyant stock market.

Zimnat Life did not do that well with premium income increasing by 97 percent which was way below inflation.

Cresta Zimbabwe had a 360 percent growth in turnover with operating profit margins improving from 1 percent to 27.9 percent. Turnover for Cresta Marakanelo in Botswana declined by 5 percent due to pressure from competition and declining tourist arrivals. This is, however, not unusual in the first half. The hotel operation is expected to recover in the second half to December.

The company says it disposed of Blue Ribbon Foods at a profit of $1.8 billion dollars and Sabata Holdings at a profit of $100 million.

The other associated companies, namely: Sable Chemicals, ZFC, AON and United Refineries, contributed nearly $2 billion before tax. Sable chemicals contributed 44.5 percent while ZFC brought in 27.5 percent with AON and United Refineries sharing the remainder equally.

The associated companies are expected to contribute increased profits in the second half because of the lifting of price controls.

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