CHAIRMAN’S STATEMENT
ECONOMIC OVERVIEW
The business environment in 2024 was characterised by subdued growth owing to the impact of the El-Nino induced drought. There were local currency and exchange rate reforms following a significant loss in value of the currency as well as attendant high inflation. GDP is expected to have registered growth of 2% in 2024 versus the initially forecasted 3.5% as the agricultural sector’s performance regressed by 15% owing to the absence of meaningful rains. Despite the agricultural sectors’ regression, growth was recorded in the information communication technology, mining, tourism, and construction sectors. Thus, despite the overbearing impact of the drought, there were still growth opportunities for the FMHL financial services Group.
The ZWL currency devalued by 82% against the United States dollar in Q1 2024 in the run up to the introduction of the ZWG currency on 5 April 2024. The ZWG was initially stable but was devalued by 43% on 27 September 2024. Thereafter the ZWG has been a more stable local currency, resulting in lower inflation. In the Monetary Policy Statement of 6 February 2025 the Reserve Bank advised that foreign and local currency bank deposits were split 83% and 17% respectively. While the use of the ZWG is increasing the informal sector transacts predominantly in USD cash which undermines the tax base of the country as the current tax regime is principally based on the formal sector. The Government recently introduced measures to increase the contribution of the informal sector to tax revenue. The silver lining of these developments is that it may present niche opportunities to the Group through public private partnerships in the fields of health and finance. Overall, at a national level, these macro-economic imbalances need to be resolved for a more sustainable business outlook which would improve the Group’s prospects.
The Group has maintained its strategic investment stance of a bias towards real assets to not only hedge against potential value loss arising from exchange rate and inflation shocks but to stabilise the volatility of its investments and pass such benefits to its clients. Additionally, the Group is looking forward to assisting policy makers and the Government in addressing national challenges through win–win partnerships for the benefit of not only shareholder and policyholder funds but for the nation at large.
FIRST MUTUAL LIFE SETTLEMENT AGREEMENT
First Mutual Life Assurance Company (Private) Limited (FML) is continuing to work with the Insurance and Pensions Commission (IPEC) to bring finality to the issues that arose during the forensic audit. Following the withdrawal of the Corrective Order, FML and IPEC came to a settlement agreement. This agreement incorporated steps to resolve outstanding issues. This included the appointment of independent experts to consider to review issues in contention. The independent experts submitted their findings which FML has accepted. IPEC subsequently asked FML to resubmit some information that had already been supplied, and to provide some additional information which was done.
CHANGE IN FUNCTIONAL AND PRESENTATION CURRENCY
The Group recorded a steady increase in the use of foreign currency across its business units over the past 24 months in line with the general macroeconomic trends in the country. The increased dominance of the USD prompted a reassessment of functional currency across the Group’s business units in accordance with the requirements of International Accounting Standard (IAS) 21 -The Effects of Changes in Foreign Exchange (IAS 21). The board concluded that based on the primary operating environment and the Group’s own operating activities, there had been a change in its functional currency from Zimbabwe Dollar (“ZWL”) to United States Dollar (“USD”) on 1 January 2024.
The Group has complied with the guidance of IAS 21 which directs entities operating in hyperinflationary economies to translate their last reported inflation adjusted financial statements using the closing official exchange rate at the reporting date to derive and present comparative financial statements under a newly assessed functional currency and presentation currency. While the Directors have applied the guidance of IAS 21 to present the comparative financial information it is of paramount importance that the following be brought to the attention of the users as compliance with IAS 21 will result in material distortions arising from the following:
- There were significant distortions between the official exchange rate and the pricing exchange rate for goods and services during 2023, thus the translated transactions and balances will have little to no correlation to the actual USD prices for similar transactions.
- Absolute USD transactions and balances (non-monetary) recorded in 2023 were subjected to the hyperinflation adjustments as required by International Accounting Standard 29 – Financial Reporting in Hyperinflationary Economies. Translating these to the Group’s presentation currency has the impact of overstating the reported value of the transactions which are in a stable currency.
The Board is of the view that the above factors will result in the 2023 comparative information being misleading. There was lack of consensus with auditors on the interpretation of IAS 1 – Presentation of Financial Statements paragraph 19, that the currency situation being faced (multicurrency environment and decommissioning of a hyperinflationary currency) was indeed “extremely rare” and thus requiring a departure from IAS 21 in compliance with the spirit of “comply or explain” as embodied by International Financial Reporting standards. The Directors have always exercised reasonable due care and applied judgments that they considered to be appropriate in the preparation and presentation of the Group’s financial statements, thus have included supplementary information at the end of this report which better reflects the financial results of the business and is the basis on which management decisions are made.
FINANCIAL HIGHLIGHTS
FINANCIAL PERFORMANCE
The financial results are presented in US Dollars following the change in functional and presentation currency on 1 January 2024. The conversion of the prior year figures was done in compliance with IFRS which may deviate from the underlying financial performance as tracked by management for decision making purposes. Insurance contract revenue decreased by 17% compared to 2023 performance mainly due to the IFRS related distortions emanating from the fact that prior year transactions were subjected to hyperinflationary adjustments and subsequently translated to USD using the official exchange rate which had a weak correlation to the inflation adjustment factors used which were based on Total Poverty Consumption Line. The Group incurred a loss after tax of $27.1 million from a profit of $58.7 million in the prior period. The contrasting performance for the two periods is due to major distortions on investment property emanating from compliance with functional currency transitional guidelines as required by IAS 21. In 2023 Investment Property was valued in ZWL by Independent Property valuers who did not necessarily make use of the official exchange rates in their valuation due to its limited use in property transactions. Translation of the ZWL investment property values to USD on 1 January 2024 resulted in the opening balance of $182 million, which was more than the USD valuation of $134 million for the same property as at 31 December 2024. This phenomenon resulted in the Group incurring a fair value loss on investment property of $54 million reduced by current year additions to $50.5 million.
SUSTAINABILITY
Sustainability remains key in the various aspects of operations that include value creation and optimisation, compliance with IFRS and GRI reporting requirements whilst fulfilling good corporate citizenry dictates. Creation of sustainable economic value remains a pillar of the Group’s corporate strategy environmental, social and governance (“ESG”) aspects anchor the Group’s strategy with workflows and processes in place that ensure sustainability stretches to other areas of the business beyond the core operations. In our ongoing commitment to transparency and sustainable growth, we aligned our reporting with globally recognised frameworks to provide stakeholders with a comprehensive understanding of our performance and impact. This year, we have strengthened our disclosures by integrating aspects of IFRS Sustainability Standards (S1 and S2) and the Global Reporting Initiative (GRI) guidelines, each serving distinct yet complementary purposes:
- IFRS S1 – establishes the foundation for sustainability-related financial disclosures, focusing on material risks and opportunities that influence our resilience, financial position, and strategic decision-making. It ensures investors receive consistent, decision-useful insights into how sustainability factors shape long-term value.
- IFRS S2 – a specialised extension of S1, zeroes in on climate-specific disclosures, detailing our governance, strategy, and metrics such as greenhouse gas emissions. This standard underscores our accountability in navigating climate-related challenges and opportunities critical to our stakeholders.
- GRI, in contrast, adopts a broader lens, emphasising our organisation’s impacts on the economy, environment, and society. It addresses the expectations of a diverse stakeholder base, from communities to regulators, by transparently reporting how we manage our responsibilities beyond financial performance.
By harmonising these frameworks, we not only meet investor demands for financially material sustainability data (IFRS) but also demonstrate our holistic commitment to ethical stewardship and positive societal contribution (GRI). Together, they reflect our dual focus: driving strategic priorities informed by global standards while advancing our purpose-led journey toward sustainable value creation for all.
This integrated approach reinforces our dedication to accountability, resilience, and leadership in an evolving global landscape.
FIRST MUTUAL IN THE COMMUNITY
First Mutual Holdings Limited remains committed to transforming lives through its Corporate Social Responsibility (CSR) initiatives, with a particular focus on providing educational support to vulnerable children. Through the First Mutual Foundation, the company continues to offer financial assistance to students at primary, secondary, and tertiary levels, ensuring they have the resources needed to pursue their academic dreams. This support includes, but is not limited to, the payment of school fees, levies, examination fees, and the provision of essential learning materials such as stationery and uniforms. At the tertiary level, the programme extends to tuition, accommodation, food, and upkeep fees.
During the period under review, the First Mutual Foundation proudly celebrated its 10th anniversary, marking a decade of meaningful impact in education. Over the years, the programme has significantly enhanced school attendance, retention, and transition rates among beneficiaries. Many students have not only completed their studies successfully but have also excelled in highly competitive fields such as Actuarial Science, Data Science, and Computer Engineering. The initiative has played a crucial role in shaping well-rounded individuals, equipping them with academic qualifications, personal development opportunities, and professional exposure through industry attachments and internships.
Building on this success, First Mutual Holdings Limited has expanded its scholarship programme to include five state-owned universities: the University of Zimbabwe, Chinhoyi University of Technology, the National University of Science and Technology (NUST), Midlands State University (MSU), and Bindura University of Science Education. Under this initiative, three students per university will receive financial assistance, further strengthening the company’s commitment to supporting higher education.
Notably, five students transitioning to tertiary education in 2025 have been part of the First Mutual Foundation’s support system from primary and secondary school. Their academic achievements have earned them continued sponsorship, reinforcing the organisation’s longterm investment in nurturing future leaders.
First Mutual Holdings Limited remains dedicated to empowering vulnerable students through education, fostering brighter futures, and making a lasting impact on communities.
OUTLOOK
The Group remains optimistic about future endeavours and believes that developed strategies will be adequate in ensuring agility and real growth. Provision of relevant products that serve the client needs remains critical to sustainable operations.
DIRECTORATE
Appointments:
– Dr Charles Shava was appointed to the Board with effect from 11 May 2024.
Resignations:
– Mr Matthew Mangoma resigned from the Board with effect from 18 March 2024.
DIVIDEND
On 16 April 2025 the Board resolved that a final dividend of $1.2 million be declared from the reserves of the Company for the period ended 31 December 2024. The dividend will be payable in the split of $1 million (0.14 cents per share) in United States Dollars and the balance of $0.2 million (0.73 ZWG cents per share) in local currency. Further details on the payment of the dividend will be communicated in a separate dividend announcement. This will bring the total dividend declared to $1.8 million for the financial year ended 31 December 2024.
APPRECIATION
As we reflect on the past year’s successes and challenges, I want to extend my sincere gratitude to everyone who has played a role in our achievements. We are truly grateful for the ongoing support from our customers and will continue striving to exceed your expectations. A heartfelt thank you to our dedicated employees, whose resilience, creativity, and steadfast commitment power our daily operations. Your hard work forms the foundation of our progress. We also deeply appreciate our shareholders and partners for their continued trust and support. Your confidence in our strategy, especially as we navigate a complex landscape, allows us to pursue bold, long-term objectives.
I am also thankful to the Board of Directors and leadership team for their steady guidance and collaborative approach. Their expertise and foresight have been essential in balancing financial discipline with our sustainability goals, ensuring that we stay flexible in an ever-changing environment.
Lastly, I want to thank our stakeholders and the communities where we operate for holding us accountable and motivating us to lead with purpose. Together, we are building a future where business success and societal progress go hand in hand.
This collective effort gives us hope as we look to the future. With gratitude and a shared commitment, we remain focused on delivering value, fostering innovation, and maintaining the highest standards of integrity.
Amos Manzai
Chairman
5 June 2025
Related Downloads
FMHL Abridged Audited Financial Statements for the year ended 31 December 2024 – USD.pdf
FMHL Abridged Audited Financial Statements for the year ended 31 December 2024 – ZWG.pdf
