RNS Number:1731Q
NMBZ Holdings Ld
31 August 2000
NMBZ HOLDINGS LIMITED
Holding company of
NMB Bank Limited (registered Commercial Bank)
(formerly National Merchant Bank of Zimbabwe Limited)
and
Continental Securities Trading (Private) Limited
INFLATION ADJUSTED
RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2000
HIGHLIGHTS
* Attributable profits up 1,669% to Z$214.1 million (1999 -
Z$12.1 million)
* Historical attributable profits up 174% to Z$335.2 million on
previous year's historical attributable profits of Z$122.3
million
* Headline earnings per share up 1,739% to 752.2 cents (1999 -
40.9 cents)
* Non-interest income up 114% to Z$531.0 million (1999 -
Z$248.3 million)
* Return on shareholders' funds up at 24.4% (1999 - 5.1%)
* Dividend per share of 250.7 cents (1999 - 246.2 cents)
Mr Paddy Zhanda, Chairman, said:
"Having reported the group's results in terms of inflation
accounting, I am delighted that the results for the interim
period reflect good growth in attributable profits both on an
inflation adjusted basis and on a historical basis. The group
has established commercial banking branches in Harare and
Bulawayo, creating exciting new opportunities for the group to
diversify its products and enhance its position as a leading
provider of banking services. I am confident that with the
expanded services and continued focus on non-interest income the
group will continue to deliver real growth".
Enquiries:
NMBZ HOLDINGS LIMITED Tel: +263-4-759 601/6
Dr Julius Makoni, Managing Director
James Mushore, Deputy Managing Director
Otto Chekeche, Finance Director
COLLEGE HILL - LONDON Tel: +44-207-457 2020
Nicholas Williams/Corinna Dorward
CHAIRMAN'S STATEMENT
The end of the first half 2000 could mark a watershed in Zimbabwe's
economic fortunes. The fundamental changes that took place on the
political front present a new opportunity to implement a sustainable
economic recovery plan. The recent devaluation of the Zimbabwe
dollar, release of 50% of the statutory reserves for on-lending to
exporters at concessionary interest rates as well as the retention of
25% of the export proceeds by gold producers are welcome indicators
of the thrust to address problems facing the country's economy. The
post election period has been calm. However, more effort is required
to restore property rights and a propitious climate for foreign
investment and balanced growth.
The major macro-economic challenges facing the country are:
* Forecast decline in GDP growth for 2000
* Hyperinflation, high interest rates and poor fiscal policy
* Weak Balance of Payments (BOP) position
* Foreign currency shortages
ECONOMIC REVIEW
Decline in GDP growth for 2000
Real GDP growth is forecast to decline by 1.3% in 2000 compared to an
estimated decline of 0.1% in 1999. The manufacturing sector, long
expected to spearhead an export-led economic recovery plan, is
expected to decline in real terms by 11.0% in 2000 following a 10.0%
decline in 1999. The de-industrialisation currently occurring in the
manufacturing sector epitomises problems in all other sectors of the
economy resulting from weak domestic demand, high input costs, the
continued management of the exchange rate, and high domestic
inflation which has made Zimbabwean exports very uncompetitive.
Zimbabwe's economy is heavily dependent on the agricultural sector.
The sector has suffered from the current hostile economic environment
and the absence of a consensual land reform programme which
guarantees the integrity of property rights in Zimbabwe. The
disruption of agricultural activity through farm invasions is likely
to result in reduced productivity, food shortages, unemployment and
loss of exports.
Hyperinflation, High Interest Rates and Poor Fiscal Policy
Interim figures on the national budget outturn for 2000 indicate
continuing unbudgeted expenditure exacerbated by under-budget revenue
collection. The substantial salary increases for the civil service
awarded in January 2000 have imposed further pressures on the already
inappropriately skewed mix of government expenditure.
Inflation remained high during the first half of the year driven by
government's recourse to domestic bank credit to finance its
ballooning budget deficit. Inflation increased from 56.9% in December
1999 to 59.3% in June 2000. However the average rate of inflation was
54.5% for the six months to June 2000 compared to 58.5% for the same
period last year. Inflation has also been driven by wage increases
which were generally above the average rate of inflation.
Despite the tight monetary policy of the Reserve Bank of Zimbabwe
(RBZ) the economy continues to experience high monetary growth, a
deteriorating balance of payments position, weak currency and high
interest rates. This has increased the cost of government debt, in
addition to creating high levels of bad debts and low levels of real
investment. The disposal of state assets through privatisation and
restructuring should be speeded up in order to retire part of the
government debt.
In an effort to address the high interest rates, the Bank rate was
lowered in August 2000 by 12 percentage points to 61.4% and further
to 55.4% in line with the policy of maintaining the bank rate within
a range of 2 to 2.5 percentage points above the rate of inflation.
This is expected to provide a quick supply response, which would, in
turn, stimulate economic activity.
Weak Balance of Payments (BOP) position
The BOP remained under pressure in the first half of the year against
a background of continued poor export performance across all the
major sectors, coupled with reduced international capital inflows.
Imports, which fell by 23.9% in 1998, and 17.1% in 1999 are likely to
fall even further in 2000 owing to shortages of foreign currency,
high tariffs, high interest rates and a depreciating currency.
The outlook for the external sector appears promising following the
exchange rate adjustment, which should boost exports and curtail non-
essential imports. The high inflation differentials between Zimbabwe
and its trading partners will maintain pressure on the BOP position.
Shortages of Foreign Currency and the Management of the Exchange Rate
Foreign exchange remained critically short with importers queuing for
hard currency. The energy sector which relies heavily on imports was
affected most. The RBZ introduced measures to assist this sector,
with authorised foreign exchange dealers required to withhold 25% of
all export proceeds for use by the sector.
To restore currency stability and a sustainable balance of payments
position, the exchange rate was adjusted from Z$38 to Z$50 against
the US$ in early August. The exchange rate had been maintained at
the level of Z$38 to the US$ for eighteen months. Whilst the
devaluation may be considered as inadequate it may begin to restore
output growth through:
* Improved trade balance and foreign exchange inflows arising from
increased export earnings and a fall in the import bill.
* Increased industrial capacity utilisation leading to GDP growth.
The currency, however, remains very fragile and fundamentally weak
due to the rising external debt and a fall in portfolio and foreign
direct investment and donor financing. The long-term stability of
the Zimbabwe dollar can only be guaranteed by large inflows of
foreign exchange from exports and the return of multilateral
financial institutions, the IMF and the World Bank.
Export Incentives
The Reserve Bank released 50% of the pool of commercial and merchant
bank statutory reserves for on-lending to exporters, at an all-
inclusive concessionary final interest rate of 30%. These measures
should boost export earnings through cheaper funding of exports,
already more competitive through the devaluation. To ensure the
viability of the gold producing industry, the Reserve Bank extended
concessions to gold producers to operate foreign currency accounts
(FCAs). The FCA funds should be utilised to finance the gold
producers' own foreign currency requirements. Gold is the second
largest foreign exchange earner in Zimbabwe after tobacco.
It is necessary for the policy makers to mobilise international
financial support and attract direct foreign investment inflows.
This would create the capacity to meet external obligations timeously
in order to complement the measures above.
GROUP RESULTS
Application of IAS29 'Reporting in Hyperinflationary Economies'
As stated in the annual report for the year ended 31 December 1999,
the existence of Hyperinflation as defined by International
Accounting Standard 29 (IAS 29) "Financial Reporting in
Hyperinflationary Economies" was formally identified by the Zimbabwe
Accounting Practices Board which decided that IAS 29 would apply for
financial periods beginning on or after 1 January 2000. Accordingly
these results have been prepared in accordance with IAS 29 which
requires the restatement of the Income Statement and Balance Sheet on
the basis of the inflation indices over the reporting period. The
application of IAS 29 is likely to continue for the next two to three
years even if effective measures are taken immediately to reduce
inflation.
Summary
The group achieved inflation adjusted attributable profits of Z$214.1
million, an increase of 1,669% over the adjusted results for the same
period last year. The return on shareholders' funds was 24.4%, a
significant improvement on the 5.1% for the same period last year.
As a result of the negative macro-economic environment it was
difficult for the group to rely on its traditional banking business.
Risk management and provisioning requirements were further tightened.
The bank continued to increase its non-interest revenue.
Net Interest Income
As a result of the reduced appetite for borrowings and higher
provisions for doubtful debts, net interest income dropped
significantly over the same period last year. Interest expense also
declined significantly as the deposits dropped in tandem with the
lendings. Offshore lines of credit have been curtailed with most
overseas banks adopting a "wait and see" attitude on the political
developments in the country.
Non-Interest Income
Non-interest income increased by 114% and comprises 80% of total
income. In line with its strategy to grow non-interest income, the
group increased activity on fee earning business. The bull run on
the Zimbabwe Stock Exchange in the first quarter resulted in a
substantial profit on the group's quoted investment portfolio. Fees
were also earned for advisory services to clients in Zimbabwe and the
region.
Foreign exchange earnings increased by 86% as a result of the banks'
ability to consummate several high-value transactions.
The stock-broking subsidiary, Continental Securities Trading (Pvt)
Ltd (CST) continued to contribute positively to group earnings,
despite the limited activity on the Zimbabwe Stock Exchange.
Operating Expenses
The group's cost/income management strategy continued to bear fruit
with a reduction in cost/income ratio from 43% to 34%. Staff costs
remain the single most significant cost. The recruitment of
commercial banking staff contributed to the increase in this expense.
There was also an increase in performance related remuneration in
line with the higher profits.
Charge for Doubtful Debts
The charge for the six month period increased by 32% from Z$58.0
million in the comparable period last year to Z$76.7 million.
Although the exposure to the troubled agricultural sector comprises
only 6.7% of the lending book, significant provisions have been made
for this sector. The Board continues to be cautious in view of the
adverse economic environment.
Dividend
In view of the continuing profitability of the group, an interim
dividend of 250.7 cents per share (1999 - 144.0 cents per share) on
28,465,589 shares amounting to Z$71.4 million has been declared
payable to members registered in the books of the company on 10
September 2000. This represents a dividend cover of three times.
BALANCE SHEET
The total assets reduced by 41% to Z$5,179.7 million from Z$8,850.1
million at 30 June 1999 as a result of the reduction in both local
and foreign currency denominated loans as well as a reduction in
treasury bill investments due to the increase in the tax rate on
treasury bill income from 15% to 30%.
CAPITAL ADEQUACY
The banking subsidiary's capital adequacy ratio at 30 June 2000
calculated on the historical basis in accordance with the guidelines
of the Reserve Bank of Zimbabwe was 24.73% (30 June 1999 - 17.94%, 31
December 1999 - 23.4%). As long as the current economic environment
persists, this ratio is unlikely to reduce in the near future.
THE STOCK MARKET
After a promising start for most of the first quarter, the Zimbabwe
Stock Exchange failed to register any meaningful growth. This was
mainly due to widespread negative investor sentiment following farm
invasions and pre-election violence. There was significant selling
by foreign investors.
The expected decrease in interest rates following the reduction of
the bank rate by the Reserve Bank of Zimbabwe may rekindle activity
on the stock market during the second half of the year.
COMMERCIAL BANK
The group has established commercial banking branches in Harare and
Bulawayo and is proud to have recruited high calibre staff. An
investment in cutting edge technology will enable delivery of a high
level of quality service and innovative products. The commercial
banking services are targeted at corporate entities and high net-
worth individuals. The new services offered will complement existing
services. The product range and geographical spread will be expanded
in the coming year.
Whilst the contribution from commercial banking activities in respect
of net interest income and other services will be insignificant this
year, it is anticipated that a significant portion of the group's
earnings will be derived from these activities next year.
OUTLOOK
Economy
The recently appointed new government ministers have introduced
economic policy measures that should have a positive effect on the
macroeconomic environment. A lower interest rate environment should
restore economic growth. Improved foreign exchange earnings from a
devalued currency should address the fragile balance of payments
position as well as improve the availability of strategic inputs such
as electricity and fuel.
The measures should increase the country's economic resilience,
enhance its growth potential based on competitiveness and
productivity gains and address socio-economic issues emerging from
the economic slowdown.
The restoration and guarantee of the transparency, predictability and
impartiality of the regulatory and legal systems should improve the
country's poor international credit rating and alienation from the
international community, which has blocked the country's access to
both official and private sources of external credit.
Group
The group will continue with its strategy to increase non-interest
income and to control costs. Adequate skills exist to continue
identifying and exploiting opportunities to maintain earnings from
investment and dealing in securities as well as structured foreign
currency transactions. The income from advisory services should be
maintained from a strong pipeline of existing mandates. Particular
attention will be paid to risk management issues to ensure that the
quality of earnings will be enhanced.
Following the establishment of branches for the commercial bank in
Harare and Bulawayo, I am confident that the group will enhance its
position as a leading provider of banking services whilst continuing
to deliver real growth.
In view of the overwhelming demand for the company's shares on the
stockmarket, the directors are considering ways of improving
liquidity of the shares. Appropriate shareholders' approval will be
sought in due course.
Mr Freddie Mutenure, who was a founding shareholder and Managing
Director of the stockbroking subsidiary, CST, for the last five
years, died in April following a road accident. My colleagues on the
board and I, and indeed all the staff in the group, miss him sorely
and join me in extending our condolences to his family.
I would like to thank our clients for their continued support. I
would also like to thank the board, staff and management for
achieving such positive results.
PADDY TENDAYI ZHANDA
Chairman
31 August 2000
UNAUDITED INFLATION ADJUSTED GROUP RESULTS & DIVIDEND ANNOUNCEMENT
for the six months ended 30 June 2000
Income Statement
Unaudited Restated Restated
6 months 6 months Year
ended ended ended
NOTE 30 June 2000 30 June 1999 31 Dec 1999
Z$'000 Z$'000 Z$'000
Interest from lending 130,158 281,492 565,945
activities
Charge for bad and
doubtful debts (76,691) (57,987) (102,028)
------- ------- --------
53,467 223,505 463,917
Interest from investing
activities 158,813 308,255 916,076
------- ------- --------
212,280 531,760 1,379,993
Interest expense (77,103) (320,511) (666,337)
------- ------- --------
Net interest income 135,177 211,249 713,656
Other income 5 530,983 248,306 477,092
------- ------- --------
Net operating income 666,160 459,555 1,190,748
Operating expenditure 6 (227,847) (196,092) (430,437)
Loss on net monetary
position (151,858) (197,105) (347,494)
-------- -------- --------
Profit before taxation 286,455 66,358 412,817
Taxation (69,865) (47,802) (123,905)
-------- -------- --------
Profit after taxation 216,590 18,556 288,912
Outside shareholders'
interests (2,473) (6,480) (8,808)
-------- -------- --------
Profit attributable to
ordinary shareholders 214,117 12,076 280,104
Appropriations (71,372) (70,094) (313,742)
Dividends - interim (71,372) (70,094) (70,094)
- final - - (243,648)
-------- -------- --------
Retained profit 142,745 (58,018) (33,638)
-------- -------- --------
Dividend per share (cents)
- interim 250.7 246.2 246.2
- final - - 855.9
Earnings per share (cents) 752.2 42.4 984.0
Headline earnings per share
(cents) 752.2 40.9 977.2
Diluted earnings per share
(cents) 739.3 41.7 967.2
Diluted headline earnings
per share (cents) 739.3 40.2 960.5
Dividend cover (times) 3.00 0.17 0.89
Number of issued shares
(000's) 28,466 28,466 28,466
The comparative results have been restated in accordance with IAS 29
(see Note 4).
UNAUDITED INFLATION ADJUSTED GROUP RESULTS & DIVIDEND ANNOUNCEMENT
for the six months ended 30 June 2000
Balance Sheet
Unaudited Restated Restated
30 June 30 June 31 Dec
NOTE 2000 1999 1999
Z$'000 Z$'000 Z$'000
Share capital 8 99,630 99,630 99,630
Restatement of Share
capital 253,564 253,564 253,564
Capital reserves 223,245 223,245 223,245
Restatement of Capital
reserves 501,062 501,062 501,062
Revenue reserves (59,384) (226,509) (202,129)
--------- -------- --------
1,018,117 850,992 875,372
Minority Interest 19,925 16,881 17,796
--------- -------- --------
1,038,042 867,873 893,168
Liabilities
Deferred taxation 17,765 272 13,446
Deposit and other accounts 1,922,977 4,812,493 2,725,186
Provision for taxation 97,103 54,823 98,885
Dividend proposed 71,372 65,175 211,450
Acceptances 2,032,464 3,049,531 3,497,212
--------- --------- ---------
5,179,723 8,850,167 7,439,347
========= ========= =========
Assets
Balances with banks
and cash 26,275 154,734 79,313
Government and public
sector securities:
Treasury bills 690,575 1,464,319 1,695,265
Advances and other
accounts 1,447,517 3,723,237 1,594,163
Investments:
Trade investment 16,708 10,438 10,438
Short term investments 6,684 38,049 133,391
Other 495,580 186,772 205,913
Fixed assets 463,920 223,087 223,652
Customers' indebtedness
for acceptances 2,032,464 3,049,531 3,497,212
--------- --------- ---------
5,179,723 8,850,167 7,439,347
========= ========= =========
UNAUDITED INFLATION ADJUSTED GROUP RESULTS & DIVIDEND ANNOUNCEMENT
STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2000
-----------Capital Reserves------------ Revenue
Restated Reserves
Restated Restated Restated Capital Restated
Share Share Statutory Redemption Restated Accumulated
Capital Premium Reserve Reserve Other Profit/(Loss) Total
Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
Balances
as 1
January
1999 353,194 550,229 104,636 68,398 - (169,751) 906,706
Dilution
of interest
in
subsidiary - - - - 1,044 1,260 2,304
Net profit
for the
period - - - - - 12,076 12,076
Dividends - - - - - (70,094) (70,094)
-------------------------------------------------------------------
Balances
at 30 June
1999 353,194 550,229 104,636 68,398 1,044 (226,509) 850,992
-------------------------------------------------------------------
Balances
at 1 July
1999 353,194 550,229 104,636 68,398 1,044 (226,509) 850,992
Net profit
for the
period - - - - - 268,028 268,028
Dividends - - - - - (243,648) (243,648)
--------------------------------------------------------------------
Balances
at 31
December
1999 353,194 550,229 104,636 68,398 1,044 (202,129) 875,372
--------------------------------------------------------------------
Balances
at 1
January
2000 353,194 550,229 104,636 68,398 1,044 (202,129) 875,372
Net profit
for the
period - - - - - 214,117 214,117
Dividends - - - - - (71,372) (71,372)
--------------------------------------------------------------------
Balances
at 30 June
2000 353,194 550,229 104,636 68,398 1,044 (59,384) 1,018,117
--------------------------------------------------------------------
UNAUDITED INFLATION ADJUSTED GROUP RESULTS & DIVIDEND ANNOUNCEMENT
for the six months ended 30 June 1999
Cashflow Statement
Unaudited Restated Restated
Six months Six months Year
ended ended ended
30 June 30 June 31 Dec
2000 1999 1999
Z$'000 Z$'000 Z$'000
Operating cash flow before changes
in operating assets and liabilities
and loss on net monetary position 438,312 263,463 838,018
Loss on monetary position (151,858) (197,105) (347,494)
-------- -------- ---------
Operating cash flow before changes
in operating assets and
liabilities 286,454 66,358 490,524
Changes in operating assets
and liabilities:
Deposits and other accounts (802,209) (345,069) (2,432,376)
Advances and other accounts 146,646 583,101 2,712,174
-------- -------- ---------
(369,109) 304,390 770,322
Dividends paid (180,782) (64,090) (123,116)
Corporate tax paid (83,063) (32,964) (34,214)
Net cash outflow from investing (551,481) (57,893) (212,684)
activities --------- -------- ---------
(1,184,435) 149,443 400,308
Net cash inflow from
financing activities - 2,985 2,985
Cash and cash equivalents
at beginning of period 1,907,969 1,504,676 1,504,676
--------- --------- ---------
Cash and cash equivalents
at end of period 723,534 1,657,104 1,907,969
======= ========= =========
Cash and cash equivalents comprise cash and bank balances, treasury
bills and short-term investments.
NMBZ HOLDINGS LIMITED
NOTES TO THE ACCOUNTS
1. Accounting Policies
The interim statements have been prepared on the basis of the
accounting policies set out in the financial statements for the
year ended 31 December 1999. In addition, the group has applied
IAS 29 for the first time to conform with International
Accounting Standards. (See note 4)
2. Compliance with International Accounting Standards Numbers 29
(IAS 29) and 34 (IAS 34)
The group's interim statements have been prepared in accordance
with the requirements of IAS 29, "Reporting in Hyperinflationary
Economies", and also in accordance with the requirements of IAS
34, "Interim Financial Reporting". IAS 34 requires that in a
hyperinflationary environment the interim results should be
prepared on the same basis as that for the full year.
3. Currency
These interim statements are expressed in Zimbabwe dollars.
4. Basis of preparation
The interim report was approved by the board on 29 August 2000.
The financial information in the interim report for the six
months ended 30 June 2000 has not been audited, but has been
reviewed by the external auditors, as was the financial
information for the six months ended 30 June 1999. The financial
information for the year ended 31 December 1999 has been restated
based on the audited financial statements for that period.
The financial statements have been prepared on the historical
cost basis and restated in accordance with IAS 29, which requires
that the results be stated in terms of the measuring unit current
at the balance sheet date. The index used was based on the
closing index value for June 2000. The comparative figures for
the period ended 30 June 1999 and the financial year ended 31
December 1999 have been restated based on the value current at 30
June 2000. The income statement for the six month period was
derived from monthly index values relative to June 2000, the
comparative income statements have been restated on average index
values for the respective periods relative to June 2000.
IAS 29 discourages the publication of historical results as a
supplement to inflation adjusted accounts. However, historical
results have been published to allow comparability of results as
this is the first application of the Standard by the group. The
Zimbabwe Accounting Practices Board and the Zimbabwe Stock
Exchange have permitted companies in Zimbabwe to publish
historical interim results in conjunction with inflation adjusted
results.
5. Other income
Unaudited Restated Restated
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 1999
2000 1999
Z$'000 Z$'000 Z$'000
Net commission and fee
income 24,407 50,132 92,924
Gains less losses from
investment securities 108,292 23,745 -
Net dealing income from
securities 165,067 32,432 147,072
Gains less losses from
dealing in
foreign currencies 189,279 101,660 167,443
Broking income 16,511 23,901 36,698
Other operating income 27,427 16,436 32,955
------- ------- -------
530,983 248,306 477,092
======= ======= =======
6. Operating expenditure
The operating profit is after
charging the following:
Unaudited Restated Restated
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2000 1999 1999
Z$'000 Z$'000 Z$'000
Administration costs 46,307 38,210 106,640
Audit Fees 606 721 2,208
Depreciation 14,976 15,543 39,708
- Fixed assets leased to
customers 4,844 9,110 20,886
- Own assets 10,132 6,433 18,822
Directors remuneration 14,033 18,031 34,800
Paid by subsidiary companies:
- Fees for services
as directors 321 534 948
- Other emoluments 13,712 17,497 33,852
Staff costs 151,925 123,587 247,081
------- ------- -------
227,847 196,092 430,437
======= ======= =======
The depreciation charge on own assets has increased marginally in
comparison with the increase in the assets. This is a result of
work in progress on the computerisation and the retail bank
projects on which no depreciation has been provided.
7. Earnings per share
7.1 Earnings per share
The calculation of earnings per share for the six months
ended 30 June 2000 is based on the profit after tax
attributable to ordinary shareholders of Z$214,117,000 and on
28,465,589 issued shares. The earnings per share for the six
months ended 30 June 1999 was based on the restated profit
after tax attributable to ordinary shareholders of
Z$12,076,000 and on 28,465,589 issued shares. The
calculation of the weighted earnings per share for the year
ended 31 December 1999 was based on the restated profit after
tax attributable to ordinary shareholders of Z$280,104,000
and on 28,465,589 issued shares.
7.2 Headline earnings per share
The calculation of headline earnings per share for the six
months ended 30 June 2000 is based on profit after taxation
of Z$214,117,000 and on 28,465,589 issued shares. The
calculation of the headline earnings per share for the six
months ended 30 June 1999 was based on the restated profit
after taxation of Z$11,638,000 and on 28,465,589 issued
shares. The calculation of the headline earnings per share
for the year ended 31 December 1999 was based on restated
profit after taxation of Z$278,174,000 and on issued shares
of 28,465,589. The adjustments were as follows:
Unaudited Restated Restated
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2000 1999 1999
Z$'000 Z$'000 Z$'000
Profit attributable to
shareholders 214,117 12,076 280,104
Deduct non-recurring items:
Profit on disposal of fixed
assets - (438) (1,930)
------- ------- --------
214,117 11,638 278,174
======= ======= ========
This is calculated in accordance with the Statement of
Investment Practice No.1 issued by the Institute of
Investment Management and Research to assist users of
accounts to identify earnings derived from trading
activities.
8. Share capital
8.1 The issued share capital since January 1999 remained at the
historical figure of $99,630,000 comprising 28,465,589
ordinary shares of Z$3.50 each.
8.2 Purchase of own shares
Shareholders authorised the directors to purchase for
cancellation 4,000,000 of the company's own shares at the
annual general meeting held on 30 May 2000. By the end of
June 2000, no shares had been purchased.
9. Taxation
The effective tax rate for the six months ended 30 June 2000 is
15.94% compared to 18.14% for the six months ended 30 June 1999
and 16.3% for the year ended 31 December 1999. This is due to
the final tax rate of 30% which is applicable to income earned on
treasury bills on contracts entered into from 1 January 1999 and
the utilisation of the assessed tax loss.
10.Exchange rates
The official exchange rates applied were as follows:
30 June 30 June 31 December
2000 1999 1999
British Sterling GBP 1.00 Z$62.03 Z$59.77 Z$62.03
United States
Dollar USD 1.00 Z$37.95 Z$37.95 Z$37.95
11.Indices
The indices used were compiled by the Central Statistical Office
of Zimbabwe and are based on the consumer price index which is
the best measure of the inflation rate available.
The indices were as follows:
June 2000 1,560.60
December 1999 1,188.20
June 1999 979.70
December 1998 757.33
NMBZ HOLDINGS LIMITED
DIVIDEND ANNOUNCEMENT
The board has declared an interim dividend of 250.7 cents per share
on 28,465,589 shares payable to members registered in the books of
the company on 15 September 2000. The transfer books and register of
members will be closed from 16 September to 22 September 2000.
Dividend cheques will be mailed to shareholders on or about 26
September 2000. The dividends payable to non-resident shareholders
will be paid in accordance with Exchange Control Regulations.
Resident and non-resident shareholders' tax of 15% will be deducted
where applicable.
By Order of the Board
T Nyambirai
Secretary
29 August 2000
Directors: P T Zhanda (Chairman), J T Makoni (Managing Director)*, O O
Chekeche*,
C J Constable, M L dos Remedios, J S Friedlander, J A Mushore*, A M T
Mutsonziwa,
F Zimuto*.
*Executive
Transfer Secretaries:
In Zimbabwe In UK
First Transfer Secretaries Computershare Services PLC
8th Floor Caxton House
BARD House Redcliff Way
69 Samora Machel Avenue BRISTOL
P O Box 11 BS99 7NH
HARARE UK
Secretary:
T Nyambirai
Registered Offices
Head Office Bulawayo Office
Zimbabwe Zimbabwe
4th Floor 1st Floor
Unity Court First Mutual Life Building
Corner First Street/Union Avenue Main Street/9th Avenue
HARARE BULAWAYO
Telephone (263-4) 759651 Telephone (263-9) 70169
Facsimile (263-4) 759648 Facsimile (263-9) 68535
(263-4) 781119
Website http://www.nmbz.co.zw
http://www.nmbz.com
Email ottoc@nmbz.co.zw
The inflation adjusted accounts are the principal accounts of the
group. The historical accounts are supplementary and have been
included to facilitate comparability.
NMBZ HOLDINGS LIMITED HISTORICAL RESULTS & DIVIDEND ANNOUNCEMENT
for the six months ended 30 June 2000
Income Statement
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
NOTE 30 June 30 June 31 December
2000 1999 1999
Z$'000 Z$'000 Z$'000
Interest from lending
activities 118,578 164,615 365,126
Charge for bad and
doubtful debts (76,691) (33,911) (61,485)
------- -------- --------
41,887 130,704 303,641
Interest from investing
activities 144,685 180,266 591,017
------- ------- --------
186,572 310,970 894,658
Interest expense (71,009) (187,433) (429,895)
------- ------- --------
Net interest income 115,563 123,537 464,763
Other income a 491,669 145,208 307,801
------- ------- --------
Net operating income 607,232 268,745 772,564
Operating expenditure b (199,933) (114,674) (282,040)
------- ------- --------
Profit before taxation 407,299 154,071 490,524
Taxation (69,865) (27,954) (79,939)
------- ------- --------
Profit after taxation 337,434 126,117 410,585
Outside shareholders'
interests (2,221) (3,790) (5,683)
------- ------- --------
Profit attributable
to ordinary shareholders 335,213 122,327 404,902
Appropriations (71,372) (40,990) (202,414)
Dividends - interim (71,372) (40,990) (40,990)
- final - - (161,424)
------- ------- -------
Retained profit
for the period 263,841 81,337 202,488
------- ------- -------
Dividend per share
(cents)
- interim 250.7 144.0 144.0
- final - - 567.1
Earnings per share
(cents) c 1,177.6 429.7 1,422.4
Headline earnings
per share (cents) 1,177.6 428.8 1,417.5
Diluted earnings
per share (cents) 1,157.5 427.6 1,404.1
Diluted headline
earnings per share
(cents) 1,157.5 426.6 1,399.2
Dividend cover (times) 4.70 2.98 2.00
Number of issued
shares (000's) 28,466 28,466 28,466
NMBZ HOLDINGS LIMITED HISTORICAL RESULTS & DIVIDEND ANNOUNCEMENT
for the six months ended 30 June 2000
Balance Sheet
Unaudited Unaudited Audited
At 30 June At 30 June At 31 Dec
2000 1999 1999
Z$'000 Z$'000 Z$'000
Share capital 99,630 99,630 99,630
Capital reserves 223,245 223,245 223,245
Revenue reserves 552,721 167,728 288,880
------- -------- --------
875,596 490,603 611,755
Minority Interest 8,650 7,378 7,996
------- -------- --------
884,246 497,981 619,751
Liabilities
Deferred taxation 17,765 171 10,264
Deposits and other accounts 1,922,904 3,026,726 2,080,294
Provision for taxation 97,103 34,480 75,485
Dividend proposed 71,372 40,990 161,413
Acceptances 2,032,464 1,917,944 2,669,627
--------- --------- ---------
5,025,854 5,518,292 5,616,834
========= ========= =========
Assets
Balances with banks and cash 26,275 97,318 60,544
Government and public sector
securities:
Treasury bills 690,575 920,956 1,294,095
Advances and other accounts 1,447,517 2,341,658 1,216,919
Investments:
Trade investment 7,858 2,718 2,718
Short term investments 6,684 23,930 101,825
Other 495,580 117,466 157,186
Fixed assets:
Leased to customers 3,976 13,058 7,748
Own 314,925 83,244 106,172
Customers' indebtedness for
acceptances 2,032,464 1,917,944 2,669,627
--------- --------- ---------
5,025,854 5,518,292 5,616,834
========= ========= =========
NMBZ HOLDINGS LIMITED HISTORICAL RESULTS & DIVIDEND ANNOUNCEMENT
STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2000
----------Capital Reserves----------- Revenue
Reserves
Share Share Statutory Redemption Accumulated
Capital Premium Reserve Reserve Other Profit/(Loss) Total
Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
Balances
at 1
January
1999 99,630 172,149 22,500 27,921 - 86,825 409,025
Dilution
of
interest
in
subsidiary - - - - 675 (434) 241
Net profit
for the
period - - - - - 122,327 122,327
Dividends - - - - - (40,990) (40,990)
---------------------------------------------------------------------
Balances
at 30
June
1999 99,630 172,149 22,500 27,921 675 167,728 490,603
---------------------------------------------------------------------
Net profit
for the
period - - - - - 282,576 282,576
Dividends - - - - - (161,424) (161,424)
---------------------------------------------------------------------
Balances
at 31
December
1999 99,630 172,149 22,500 27,921 675 288,880 611,755
Net profit
for the
period - - - - - 335,213 335,213
Dividends - - - - - (71,372) (71,372)
----------------------------------------------------------------------
Balances
at 30 June
2000 99,630 172,149 22,500 27,921 675 552,721 875,596
======================================================================
NMBZ HOLDINGS LIMITED HISTORICAL RESULTS & DIVIDEND ANNOUNCEMENT
for the six months ended 30 June 2000
Cashflow Statement
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 Dec
2000 1999 1999
Z$'000 Z$'000 Z$'000
Operating cash flow before changes in
operating assets and liabilities 418,961 199,791 506,432
Changes in operating assets and
liabilities:
Deposits and other accounts (157,390) 523,055 (423,377)
Advances and other accounts (230,598) (251,202) 873,537
-------- -------- --------
30,973 471,644 956,592
Net interest received - 2,493 5,986
Dividends paid (162,980) (37,037) (80,571)
Corporate tax paid (40,746) (19,277) (20,164)
Net cash outflow from investing
activities (560,177) (99,544) (129,304)
-------- -------- --------
Net cash (outflow)/inflow before
financing activities (732,930) 318,279 732,539
Net cash inflow from
financing activities - 1,500 1,500
Cash and cash equivalents
at beginning of period 1,456,464 722,425 722,425
--------- -------- --------
Cash and cash equivalents
at end of period 723,534 1,042,204 1,456,464
========= ========= =========
Cash and cash equivalents comprise cash and bank balances, treasury
bills and short term investments.
NMBZ HOLDINGS LIMITED
NOTES TO THE HISTORICAL ACCOUNTS
a. Other income
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2000 1999 1999
Z$'000 Z$'000 Z$'000
Net commission and fee
income 22,599 29,317 59,951
Gains less losses from
investment securities 100,270 13,886 -
Net dealing income from
securities 152,840 18,966 94,885
Gains less losses from
dealing in
foreign currencies 175,277 59,450 108,028
Broking income 15,288 13,977 23,676
Profit on disposal of fixed assets - 276 1,414
Other operating income 25,395 9,336 19,847
------- ------- -------
491,669 145,208 307,801
======= ======= =======
b. Operating expenditure
The operating profit is after
charging the following:
Administration costs 44,632 24,252 77,149
Audit Fees 498 378 1,327
Depreciation 12,595 11,856 23,308
- Fixed assets leased to 4,074 6,949 12,260
customers
- Own assets 8,521 4,907 11,048
Directors remuneration 11,538 9,454 20,918
Paid by subsidiary companies:
- Fees for services as 264 280 570
directors
- Other emoluments 11,274 49,174 20,348
Staff costs 130,670 68,734 159,338
------- ------- -------
199,933 114,674 282,040
======= ======= =======
The depreciation charge on own assets has increased marginally in
comparison with the increase in the assets. This is a result of
work in progress on the computerisation and retail bank projects
on which no depreciation has been provided.
c. Earnings per share
c.1 Earnings per share
The calculation of earnings per share for the six months
ended 30 June 2000 is based on the profit after tax
attributable to ordinary shareholders of $335,213,000 and on
28,465,589 issued shares. The earnings per share for the six
months ended 30 June 1999 was based on the profit after tax
attributable to ordinary shareholders of $122,327,000 and on
28,465,589 issued shares. The calculation of the weighted
earnings per share for the year ended 31 December 1999 was
based on the profit after tax attributable to ordinary
shareholders of $404,902,000 and on 28,465,589 issued shares.
c.2 Headline earnings per share
The calculation of headline earnings per share for the six
months ended 30 June 2000 is based on profit attributable to
shareholders of $335,213,000 and on 28,465,589 issued shares.
The calculation of the headline earnings per share for the
six months ended 30 June 1999 was based on adjusted profit
attributable to shareholders of $122,051,000 and on
28,465,589 issued shares. The calculation of the headline
earnings per share for the year ended 31 December 1999 was
based on adjusted profit attributable to shareholders of
$403,488,000 and on issued shares of 28,465,589. The
adjustments were as follows:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2000 1999 1999
Z$'000 Z$'000 Z$'000
Profit attributable to
shareholders 335,213 122,327 404,902
Deduct non-recurring items:
Profit on disposal of fixed - (276) (1,414)
------- ------- -------
335,213 122,051 403,488
======= ======= =======
This is calculated in accordance with the Statement of
Investment Practice No.1 issued by the Institute of
Investment Management and Research to assist users of
accounts to identify earnings derived from trading
activities.
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