First Mutual Holdings Limited has reported a strong financial performance for the half year ended 30 June 2026, posting a profit after tax of US$19.8 million, a significant increase from US$6.2 million recorded in the prior comparative period, representing a 222 percent growth. The performance, contained in the Group’s abridged unaudited financial results, reflects a resilient operation underpinned by improved investment returns, substantial fair value gains on investment properties and steady growth in core insurance business.
The company attributed the first half performance to a relatively stable macroeconomic environment. According to the company, the period was characterised by broad stability of the Zimbabwe Gold currency, supported by the Reserve Bank of Zimbabwe’s tight monetary policy stance and prudent liquidity management measures. The Bank Policy Rate was maintained at 35 percent at the beginning of the year before being reduced to 30 percent following the Monetary Policy Committee meeting held on 15 June 2026, while inflation averaged 4.2 percent. This stability, the company noted, enhanced business confidence and improved the ability of corporates and households to plan and allocate resources more effectively.
Despite increased confidence in the local currency, the United States Dollar continued to dominate transactional activity, reflecting customers’ historical preference for USD certainty, particularly regarding the value of benefits payable at claim stage. This trend was evident in the Group’s revenue composition, where USD-denominated income accounted for approximately 89 percent of total revenue for the half year, up from 85 percent in the prior year. The company noted that this progressive shift underscores the Group’s proactive alignment with evolving customer preferences, as products continue to be offered in both currencies across all business units to ensure relevance, competitiveness and responsiveness to market demands. The dual reality of ZWG stability and USD dominance, the company observed, presents both opportunities and challenges, necessitating a flexible and responsive product strategy.
From a financial perspective, the standout drivers of performance were investment-related. Insurance Contract Revenue increased by 6 percent to US$92.8 million from US$87.7 million, reflecting ongoing commitment to customer retention, product innovation and disciplined underwriting. Rental income increased marginally by 1 percent to US$4.4 million, supported by consistent occupancy levels across the property portfolio. However, the Insurance Service Result declined by 7 percent to US$13.2 million from US$14.2 million, largely attributable to higher claims experience driven by a growing chronic disease burden and a rise in insurance contract acquisition costs.
Net investment return surged by 568 percent to US$13.7 million from US$2.05 million, reflecting favourable movements in equities markets and higher yields on fixed-income securities, while fair value gains on investment property increased by 1,257 percent to US$13.8 million, resulting in a total investment property value of US$150 million. Management cautioned that while these gains underscore the strategic value of the Group’s diversified asset base, they are market-driven and may not be replicated at the same magnitude in future periods.
The Group’s financial position strengthened during the period, with total assets increasing by 9 percent to US$306.0 million from US$280.8 million as at 31 December 2025, largely driven by fair value gains on investment properties and growth in investment assets. Total liabilities rose to US$185.8 million from US$178.0 million, in line with increased insurance contract liabilities following business growth.
A review of operations shows mixed but largely positive performance across clusters. In the Life and Health cluster, First Mutual Health Company recorded a 3 percent increase in Insurance Contract Revenue to US$39.7 million, driven by increased membership and contribution reviews, while profit surged by 2,828 percent to US$8.7 million attributable to positive operating performance and higher investment income, despite the claims ratio rising to 83.95 percent from 82.15 percent. First Mutual Health Services recorded broadly stable revenue of US$5.1 million, with profit declining by 6 percent to US$0.2 million due to higher operating costs arising from expansionary initiatives. First Mutual Life recorded a 6 percent increase in Insurance Contract Revenue to US$8 million, driven by growth in group risk schemes and retail funeral products, with profit increasing significantly to US$3.2 million on the back of positive investment outturn and effective cost management.
In the General Insurance cluster, NicozDiamond Insurance delivered Insurance Contract Revenue of US$21.5 million, an 11 percent increase from the prior period on the back of new business in marine, accident and motor classes, with profit after tax rising by 271 percent to US$5.1 million mainly on account of fair value gains on investment property. Diamond Seguros in Mozambique experienced a challenging period, with Insurance Contract Revenue decreasing by 8 percent to US$2.3 million due to non-renewals, reporting a loss of US$0.1 million consistent with the prior year, attributable to adverse reinsurance performance.
The Reinsurance cluster performed strongly. First Mutual Reinsurance Zimbabwe recorded a 4 percent increase in Insurance Contract Revenue to US$8.4 million, underpinned by treaty portfolio expansion and deepened cedant relationships, while profit increased to US$3.4 million, representing a 4,797 percent surge due to exceptional investment performance. FMRE Property and Casualty Botswana recorded Insurance Contract Revenue of US$13.8 million, a 14 percent increase, with profit after tax rising 45 percent to US$1.5 million.
In the Investments cluster, First Mutual Properties delivered US$4.6 million in rental income, an 8 percent improvement year-on-year buoyed by upward adjustments in average rental rates and consistent occupancy levels, with profit after tax increasing by 432 percent to US$10.4 million largely driven by enhanced fair value gains. First Mutual Microfinance saw net interest and fee income decline by 32 percent to US$0.9 million due to lower market interest rates that compressed lending margins, breaking even for the period compared to a loss of US$0.2 million in the prior year. First Mutual Wealth Management recorded a 14 percent increase in investment management fees to US$0.8 million, in line with an 18 percent expansion in Funds Under Management to US$173.9 million, with profit after tax increasing to US$0.3 million.
On sustainability, the company noted that Environmental, Social and Governance principles remain central to its operations and strategic direction, with progress made in harmonising sustainability practices with the IFRS Sustainability Disclosure Standards S1 and S2 and the PAAB sustainability reporting roadmap released in April 2026. In the community, the First Mutual Foundation Scholarship Fund, established in 2014, continued to provide comprehensive assistance covering tuition, learning materials, accommodation and living expenses, with beneficiaries recording marked improvements in retention and academic progression in fields such as Actuarial Science, Data Science and Computer Engineering. Through First Mutual Health, the Group also partnered with Global Aid Mission to support Zimbabwe’s Skin Cancer Prevention and Clinical Capacity Programme for people living with albinism.
The company resolved to declare an interim dividend of US$1 million from profits for the period ended 30 June 2026, payable as US$0.80 million, translating to USD0.109 cents per share in United States Dollars, and the balance of US$0.20 million, translating to ZWG0.737 cents per share in local currency, with further details to be communicated in a separate announcement.
Looking ahead, Group Chief Executive Officer Douglas Hoto said the Group’s future direction is shaped by a relentless focus on understanding customer expectations, adapting its product suite to meet emerging demands, and accelerating investments in digital capabilities and innovation. He said sustained macroeconomic stability will enhance prospects for consistent revenue growth and reduce investment portfolio volatility, enabling further diversification into real assets to manage both local and regional risk over the medium to long term. The Group remains committed to constructive policy advocacy and initiatives that contribute to economic growth.
