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Zimre Holdings recorded a profit after tax of $2,2 million in the first quarter of this year compared to a loss of $5,2 million in the same period last year. Last year the company attributed its loss to negative fair value adjustments of investment properties, retrenchment costs and the poor performance of CFI Holdings of which it has a 28 percent stake.In the period under review, profit before tax for the group increased by 89 percent to $2,1 million.

Speaking at the company’s 18th Annual General Meeting, chief executive officer Stanley Kudenga said the increase in profitability was a result of cost containment measures which had seen a 31 percent decline in operating costs.

“We expect this to go even further with the measures we are currently implementing,” he said.

Mr Kudenga said the company had made profits in all sectors except for its interests in the agribusiness with the most encouraging figures coming from Baobab Reinsurance which contributed 52 percent of the profits earned.

Gross premium written for the group declined by 11 percent during the period, which Mr Kudenga attributed to a strong United States currency and its negative impact on commodity prices.

“Impact of depreciation on regional currency resulted in a fall in commodity prices,” he said.

He added that the groups’ main challenges were collection of premiums and the debtors’ book which currently accounted for 36 percent of the company’s total assets.

Mr Kudenga said it was a major priority to move the debt ratio “significantly downwards” during the year.

He noted that the company’s credit rating had been revised upwards from BB to BBB – in April and after implementation of restructuring measures was optimistic that an August review would result in another upward rating. Going forward Mr Kudenga said the good performance was expected to be maintained despite the weak economic outlook.

“That trend is going to be maintained because it is one of the areas we are looking at in terms of implementing a turnaround programme of cutting down our costs and realigning our structures to the current environment,” he said. — New Ziana.