Interim Results
August 29 2002 - 3:02AM
UK Regulatory
RNS Number:4953A
NMBZ Holdings Ld
29 August 2002
NMBZ HOLDINGS LIMITED
Holding company of
NMB Bank Limited
(registered Commercial Bank)
and
Continental Securities Trading (Private) Limited
INFLATION ADJUSTED AND HISTORICAL
RESULTS FOR THE HALF-YEAR ENDED 30 JUNE 2002
HIGHLIGHTS
* Inflation adjusted attributable profit of Z$62 million
* Historical attributable profit up 106.2% to Z$1 536 million (2001 -
Z$745 million)
* Total inflation adjusted asset base up 27.5% to Z$51 554 million (2001 -
Z$40 424 million)
* Non-interest income contribution to net operating income up 3.4% to
45.1% (2001 - 43.6%)
* Deposits up 57.0% to Z$37 011 million (2001 - Z$23 576 million)
* Capital adequacy ratio up 31.6% to 17.9% (2001 - 13.6%)
* Historical dividend per share up 122.0% to 73.8 cents (2001-33.5 cents)
Mr Paddy Zhanda, Chairman, said:
"The group achieved reasonable growth in earnings as the commercial banking
delivery channels continued to build up a large deposit base. The unfavourable
macro-economic environment affected the profitability of the Group after
adjusting the historical profits for inflation. The Group has positioned itself
well, under the prevailing circumstances, for a commendable outturn in the
second half".
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
Corinna Dorward/Matthew Gregorowski
Chairman's Statement
The first half of 2002 was a difficult period for the country. The major
macro-economic challenges facing the country during the period were:
* Decline in Gross Domestic Product (GDP)
* Hyperinflationary environment and high money supply growth
* High domestic debt
* Weak balance of payments position
* Foreign exchange shortages
* Conclusion of the fast track phase of the land redistribution
exercise
ECONOMIC REVIEW
Decline in GDP Growth in 2002
Real GDP declined by 5% in 2000, 7.5% in 2001 and is forecast to decline by a
further 11% in 2002. Major reductions are expected in agriculture (24.6%),
distribution (10%), manufacturing (11.9%), mining and quarrying (4.1%) and
construction (10%).
Hyperinflationary Environment and High Money Supply Growth
Year on year official inflation surged during the first half of 2002 from an
average of 74.5% in 2001 to 122.5% by May 2002 before slowing down to 114.5% by
June 2002. The spiralling trend is driven mainly by the high money supply
growth, cost-push effects of the depreciating parallel market foreign exchange
rate and salary and wage adjustments which are not backed by increased
productivity. The high input costs, which are expected to persist in the second
half of 2002, will continue to constrain the country's productive sectors. The
selective price controls introduced by the Government in October 2001 will
continue to curtail investment and production in the regulated sectors.
Annual money supply growth, which started the year at just under 100%, peaked at
114% in April before slowing down to 103% in May 2002. Excessive growth in money
supply, which is being driven by the accommodation of Government's monetary
requirements through the banking sector and the expansionary effects of the
concessionary financing facilities established by the Reserve Bank in January
2001, remains amongst the major causes of the runaway inflation. Fiscal
austerity measures, supported by increased monetary restraint, remain a
prerequisite for reining in inflation and the restoration of macro-economic
stability.
High Domestic Debt
Domestic debt, which stood at Z$205 billion in December 2001, ballooned to Z$303
billion by the end of June 2002 and increased to Z$315 billion at the end of
July 2002. With over 90% of the debt being Treasury Bills, interest costs will
continue to pose a serious challenge to the Government. Some strides have been
made by the Government in restructuring the domestic debt. Almost two thirds of
the Z$287 billion Treasury Bills outstanding at 30 June 2002 now have a maturity
of two years. The domestic debt is expected to increase significantly in the
second half of 2002 on the back of increased requirements to fund grain imports
and support for the newly resettled farmers.
Weak Balance of Payments (BOP) Position
The country's BOP position remains precarious, driven mainly by the continued
decline in export receipts and the cessation of offshore lines of credit and
multilateral and bilateral support.
Annual merchandise exports are estimated to have fallen by close to 36% from
US$2.5 billion to US$1.6 billion over the past five years.
The foreign exchange crisis has remained unresolved and with the Z$ still
overvalued, a further decline in exports is forecast for 2002.
The food imports required to avert mass starvation in the country will result in
increased pressures on the country's foreign exchange reserves. Donor support
will be required to bring in grain imports given the country's poor export
performance. The cost of importing the grain for the remainder of the year is
estimated at Z$19.4 billion.
The country's capital account continues to deteriorate and is forecast to close
at a deficit of US$550 million in 2002 from a deficit of US$420 million at the
end of 2001. This will be driven mainly by the decrease in direct foreign
investment inflows, as well as continued donor fatigue and the withdrawal of
multilateral lending institutions' support for the country's BOP.
Foreign Exchange Market and Exchange Rate Policy
Notwithstanding continuing high inflation during the first half of 2002, the
official exchange rate has remained fixed at Z$55 to the US$ since October 2000.
This rigid position has continued to erode the viability of the export sector
casting a shadow on any prospects of a quick recovery in the foreign exchange
crisis. Selective exchange rates above the official exchange rates are applied
to gold producers, tobacco growers and duty on some targeted imports. Whilst
the move by the Reserve Bank to give selective exchange rate adjustments is
commendable, it is however inadequate and is therefore not a permanent solution
to the foreign exchange problems. More incentives are required to stimulate
exports coupled with an objective and balanced evaluation of the current fixed
exchange rate regime.
Agrarian Reforms
The Government has announced that the fast track land redistribution programme
will be wound up by 31 August 2002 in time for preparations for the 2002/2003
agricultural season. In support of this programme Z$8.5 billion has been set
aside by the Government for the inputs to support the new farmers. It is
expected that additional resources will be provided by the banking sector.
GROUP INFLATION ADJUSTED RESULTS
Introduction
The runaway hyperinflationary conditions affected earnings resulting in the
Group posting a small inflation adjusted profit. The banking subsidiary
continues to improve the credit quality of its book as evidenced by the
reduction in the charge for doubtful debts and the reduction in non-performing
loans.
The Group's Commercial Banking operations and the product range have increased
significantly. The Group has attracted a large deposit base of Z$37 011 million
(2001 - Z$23 576 million) representing an increase of 57.0%.
Profit After Taxation
The small inflation adjusted profit after taxation of Z$61.6 million is
reflective of the hyperinflationary conditions in the country and a low return
on investment assets. The high levels of monetary assets at 30 June 2002 of Z$46
billion (30 June 2001 - $36 billion) contributed to the loss on net monetary
position of Z$1 501.4 million. The net operating income after operating
expenditure of Z$3 143.8 million was largely offset by a large monetary loss of
Z$1 501.4 million.
Net Interest Income
Net interest income at Z$2 301.0 million contributed 54.9% (2001 - 56.4%) to net
operating income as the Group continues to attract deposits through the retail
bank for on-lending at competitive rates. Lendings also grew as clients
accessed the cheaper statutory reserve funds offered by the RBZ for the Export
and Productive sectors.
Non-Interest Income
Non-interest income increased by 8.8% to Z$1 891.7 million and contributed 45.1%
(2001 - 43.6%) of net operating income. The increase is in line with the Group's
strategy of focusing on fees and other non-lending income.
The stockbroking subsidiary, Continental Securities Trading (Private) Limited,
contributed positively as it took advantage of the mini bull runs during the
period. The subsidiary contributed 17.8% (2001 - 5.5%) to net profit after tax.
Operating Expenses
Operating expenditure increased by 1.5% over the same period last year. The
cost to income ratio decreased to 25.0% (2001 - 25.9%) reflecting continued cost
control strategies despite expanding commercial banking services.
Charge for doubtful debts
The charge for the six month period, after factoring in the exposure to the
agricultural sector, decreased by 83.6% to Z$62.1 million (2001 - Z$379.2
million). This reflects the good quality of the lending book. The Board
continues to adopt a conservative approach on provisions in view of the unstable
macro-economic environment.
Dividend
An interim dividend of 73.8 cents per share has been declared. This represents
a dividend cover of 5 times on historical profit attributable to ordinary
shareholders.
BALANCE SHEET
The asset base at 30 June 2002 grew by 27.5% to Z$51 554 million from Z$40 424
million at 30 June 2001. The increase is mainly due to balances with banks and
cash which increased from Z$767 million to Z$4 393 million, financial assets
held for trading which increased from Z$14 868 million to Z$17 256 million and
advances and other assets which increased from Z$10 048 million to Z$16 399
million.
CAPITAL ADEQUACY
The banking subsidiary's capital adequacy ratio at 30 June 2002 calculated on
the historical cost basis in accordance with the guidelines of the RBZ was 17.9%
(30 June 2001 - 13.6%, 31 December 2001 - 13.4%). This compares favourably with
the Reserve Bank's minimum ratio of 10%.
CAUTIONARY STATEMENT
Discussions in respect of a significant financial transaction, for which a
cautionary statement was issued dated 17 April 2002 and regular updates issued
thereafter, are still ongoing and shareholders will be informed of any progress.
OUTLOOK
Economy
The second half of 2002 is expected to remain difficult for business and the
general public. The grain shortages brought about by the drought, at a time when
the country is critically short of foreign currency to fund food and other
essential imports, will slide the country into a deeper crisis. Steering the
economy and especially the agricultural sector back on track requires common and
concerted efforts from Government, business, labour and the general public. The
Government should institute policies that will boost business confidence, bring
back the international donor community and multilateral lending institutions and
rein in the galloping inflation. On the part of corporates, opportunities for
value added exports should be exploited once an enabling and conducive
environment is in place.
We remain optimistic that a long term recovery is possible, given an enabling
economic environment and the political will to implement new policy.
Group
The Group has positioned itself as a leading financial services provider by
continued investment in technology, people and distribution channels in order to
enhance financial flexibility for our clients.
While the economic environment has been difficult, the Group continues to focus
on growing non-interest income through advisory services and treasury mandates.
The Group has positioned itself well, under the prevailing circumstances, for a
commendable outturn in the second half.
CONCLUSION
I would like to thank our clients for their unwavering support. I would also
like to thank the Board, staff and management for their hard work in enhancing
the vibrant commercial banking services in our pursuit of excellence.
PADDY TENDAYI ZHANDA
Chairman
27 August 2002
UNAUDITED GROUP RESULTS
for the six months ended 30 June 2002
Income Statement
INFLATION ADJUSTED HISTORICAL
Unaudited Audited
Unaudited Restated Restated Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
Ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2002 2001 2001 2002 2001 2001
Note Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
Interest
from lending
activities 2 168 311 782 473 1 629 032 2 001 686 325 663 831 980
Charge for
bad and
doubtful debt (62 148) (379 202) (408 961) (62 148) (168 716) (290 681)
-------------- -------------- -------------- -------------- -------------- --------------
2 106 163 403 271 1 220 071 1 939 538 156 947 541 299
Interest
from
investing
activities 2 160 640 2 526 603 4 871 911 2 035 194 1 059 305 2 652 926
-------------- -------------- -------------- -------------- -------------- --------------
4 266 803 2 929 874 6 091 982 3 974 732 1 216 252 3 194 225
Interest
expense (1 965 787) (675 327) (1 879 204) (1 749 238) (276 817) (999 489)
-------------- -------------- -------------- -------------- -------------- --------------
Net 2 301 016 2 254 547 4 212 778 2 225 494 939 435 2 194 736
interest income
Foreign
exchange gains 649 906 441 746 1 179 089 559 395 200 357 590 179
Net dealing
income from securities 622 013 395 980 929 712 402 742 165 001 573 893
Other income 5 619 769 901 754 1 643 174 692 966 366 777 735 201
-------------- -------------- -------------- -------------- -------------- --------------
Net
operating income 4 192 704 3 994 027 7 964 753 3 880 597 1 671 570 4 094 009
Operating
expenditure 6 (1 048 930) (1 033 210) (2 194 375) (900 018) (423 696) (1 140 301)
Loss on net
monetary position (1 501 383) (918 833) (2 949 975) - - -
-------------- -------------- -------------- -------------- -------------- --------------
Profit
before taxation 1 642 391 2 041 984 2 820 403 2 980 579 1 247 874 2 953 708
Taxation (1 381 943) (1 043 510) (1 285 741) (1 243 329) (484 259) (913 878)
Financial
Institution levy (140 403) - (196 985) (140 403) - (140 013)
-------------- -------------- -------------- -------------- -------------- --------------
Profit
after taxation 120 045 998 474 1 337 677 1 596 947 763 615 1 899 817
Minority interests (58 482) (39 896) (61 480) (61 049) (18 587) (58 244)
-------------- -------------- -------------- -------------- -------------- --------------
Profit
attributable to ordinary
Shareholders 61 563 958 605 1 276 197 1 535 898 745 028 1 841 573
======== ======== ======== ======== ======== ========
Dividend 73.8 52.60 153.35 73.8 33.25 109.0
per share
(cents)
-Historical cost basis 73.8 33.25 33.25 73.8 33.25 33.2
-interim
-final - - 75.80 - - 75.80
-Restatement - 19.35 44.30 - - -
in respect of adopting
IAS 29
Earnings per share (cents)
- Basic 7 14.8 237.8 311.6 369.2 184.8 449.6
- Headline 7 14.6 236.3 305.1 369.1 184.2 445.5
- Diluted 7 14.8 230.6 311.4 368.7 179.2 449.3
- Diluted 7 14.6 229.2 304.9 368.6 178.7 445.2
headline
Weighed
average number of
issued shares 415 991 403 166 409 578 415 991 403 166 409 578
('000s)
UNAUDITED GROUP RESULTS
As at 30 June 2002
Balance Sheets
INFLATION ADJUSTED HISTORICAL
Unaudited Audited
Unaudited Restated Restated Unaudited Unaudited Audited
At 30 June at 30 June at 31 Dec at 30 June at 30 June at 31 Dec
2002 2001 2001 2002 2001 2001
Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
Shareholders' Funds
Share capital 1 257 523 1 257 523 1 257 523 103 998 103 998 103 998
Capital reserves 2 735 212 2 735 212 2 735 212 299 320 299 320 299 320
Revenue reserves 595 671 735 906 924 272 3 671 812 1 474 603 2 467 231
-------------- -------------- -------------- -------------- -------------- --------------
Total 4 588 406 4 728 641 4 917 007 4 075 130 1 877 921 2 870 549
shareholders' funds
Minority
Interest 189 415 106 586 127 296 101 410 25 841 65 825
-------------- -------------- -------------- -------------- -------------- --------------
4 777 821 4 835 227 5 044 303 4 176 540 1 903 762 2 936 374
Liabilities
Deferred taxation 109 996 564 075 - 109 996 262 973 -
Deposits and 19 096 801 11 927 665 18 871 775 19 096 801 5 560 705 13 413 665
other accounts
Provision for 1 523 849 974 570 2 243 238 1 547 595 454 347 1 594 447
current taxation
Financial 17 913 823 11 648 709 6 639 737 17 913 823 5 430 655 4 719 388
liabilities held for
trading
Acceptances 8 131 498 10 473 723 11 366 285 8 131 498 4 882 874 8 078 919
-------------- -------------- -------------- -------------- -------------- --------------
51 553 788 40 423 969 44 165 338 50 976 253 18 495 316 30 742 793
======== ======== ======== ======== ======== ========
Assets
Balances with
banks and cash 4 392 560 766 639 1 376 537 4 392 560 357 409 978 414
Financial 17 255 729 14 867 873 8 059 365 17 255 729 6 931 437 5 728 429
assets held for trading
Advances and 16 398 780 10 047 585 15 211 697 16 380 236 4 684 206 10 812 158
other accounts
Investments:
Trade investment 85 886 79 339 83 168 2 718 2 718 2 718
Quoted and other 3 170 458 2 208 618 5 200 248 3 170 458 1 029 663 3 696 228
investments
Property, plant & 2 118 877 1 980 192 2 335 499 1 643 054 607 009 1 067 409
equipment
Deferred taxation - - 532 539 - - 37 851
Customers' indebtedness
for acceptances 8 131 498 10 473 723 11 366 285 8 131 498 4 882 874 8 078 919
-------------- -------------- -------------- -------------- -------------- --------------
51 553 788 40 423 969 44 165 338 50 976 253 18 495 316 30 742 793
======== ======== ======== ======== ======== ========
UNAUDITED GROUP RESULTS
INFLATION ADJUSTED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2002
--------------------------Capital Reserves--------------------------
Restated Restated Restated Restated Restated Revenue Total
Share Share Statutory Capital Other Reserves Z$'000
Capital Premium Reserve Redemption Z$'000 Restated
Z$'000 Z$'000 Z$'000 Reserve Accumulated
Z$'000 Profit
Z$'000
Balances at 1 1 248 592 1 964 554 353 420 241 496 3 684 72 883 3 884 629
January 2001
Effects of - - - - - (38 026) (38 026)
adopting IAS 39
------------ ----------- ------------ ------------- ------------ ------------ -------------
As restated 1 248 592 1 964 554 353 420 241 496 3 684 34 857 3 846 603
at 1 January
2001
Shares issued 8 931 172 058 - - - - 180 989
in May 2001
Net profit for the - - - - - 958 605 958 605
period
Dividends - - - - - (257 556) (257 556)
------------- ----------- ------------ ------------- ------------ ------------ --------------
Balances at 1 257 523 2 136 612 353 420 241 496 3 684 735 906 4 728 641
30 June 2001
------------- ----------- ----------- ----------- ------------ ------------ -------------
Balances 1 257 523 2 136 612 353 420 241 496 3 684 735 906 4 728 641
at 1 July 2001
Net profit for the - - - - - 317 592 317 592
period
Dividends - - - - - (129 226) (129 226)
------------ ----------- ------------ ------------- ----------- ------------ -------------
Balances 1 257 523 2 136 612 353 420 241 496 3 684 924 272 4 917 007
at 31
December 2001
------------ ---------- ----------- ------------ ----------- ------------ ------------
As restated 1 257 523 2 136 612 353 420 241 496 3 684 924 272 4 917 007
at 1 January
2002
Net profit for the - - - - - 61 563 61 563
period
Dividends - - - - - (390 164) (390 164)
------------ ----------- ----------- ------------- ------------ ------------ -------------
Balances 1 257 523 2 136 612 353 420 241 496 3 684 595 671 4 588 406
at 30
June 2002
------------- ----------- ----------- ------------- ------------ ------------ ------------
UNAUDITED GROUP RESULTS
HISTORICAL STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2002
------------------Capital Reserves------------------ Revenue
Reserves
Share Share Statutory Redemption Accumulated
Capital Premium Reserve Reserve Other Profit Total
Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
Balances at 1 100 150 174 096 22 500 27 921 675 844 279 1 169 621
January 2001
Effects of adopting - - - - - (12 743) (12 743)
IAS 39
---------- ---------- --------- ---------- ------- ------------ ----------
As restated at 1 100 150 174 096 22 500 27 921 675 831 536 1 156 878
January 2001
Shares issued 3 848 74 128 - - - - 77 976
Net profit for the - - - - - 745 028 745 028
period
Dividends - - - - - (101 961) (101 961)
---------- ----------- ------------ ---------- ------- ----------- ------------
Balances at 30 June 103 998 248 224 22 500 27 921 675 1 474 603 1 877 921
2001
Balances at 1 July 103 998 248 224 22 500 27 921 675 1 474 603 1 877 921
2001
Shares issued - - - - - - -
Net profit for the - - - - - 1 096 545 1 096 545
period
Dividends - - - - - (103 917) (103 917)
---------- ----------- ------------ ---------- ------- ----------- ------------
Balances at 31 103 998 248 224 22 500 27 921 675 2 467 231 2 870 549
December 2001
---------- ----------- ------------ ---------- ------- ----------- ------------
As restated at 1 103 998 248 224 22 500 27 921 675 2 467 231 2 870 549
January 2002
Net profit for the - - - - - 1 535 898 1 535 898
period
Dividends - - - - - (331 317) (331 317)
---------- ----------- ------------ ---------- ------- ------------ ------------
Balances at 30 June 103 998 248 224 22 500 27 921 675 3 671 812 4 075 130
2002
====== ======= ======= ====== ==== ======= =======
UNAUDITED GROUP RESULTS
for the six months ended 30 June 2002
Cashflow Statement
INFLATION ADJUSTED HISTORICAL
Unaudited Audited
Restated Restated Unaudited Unaudited Audited
Unaudited 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 Jun 30 June 31 Dec
2002 2001 2001 2002 2001 2001
Note Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
Operating cash 3 199 455 3 413 269 5 884 074 2 391 421 1 449 063 3 066 372
flow before
changes in
operating assets
and liabilities
and loss on net
monetary position
Monetary loss (1 501 383) (918 833) (2 949 975) - - -
-------------- ------------- ------------- ------------- ------------- -------------
Operating cash 1 698 072 2 494 436 2 934 099 2 391 421 1 449 063 3 066 372
flow before
changes in assets
and liabilities
Changes in
operating assets
and liabilities:
Deposits, 11 499 111 15 205 967 17 143 504 19 344 611 8 186 309 3 202 502
financial
liabilities held
for trade and
other accounts
Advances, (4 169 321) (5 051 794) (11 536 188) (8 925 001) (2 996 278) 1 819 135
financial assets
held for trade
and other accounts
------------- ------------- ------------- ------------- ------------- -------------
9 027 862 12 648 609 8 541 415 12 811 031 6 639 094 8 088 009
Taxation
Corporate tax paid (1 599 200) (269 821) (719 311) (1 136 820) (84 388) (155 411)
------------- ------------- ------------- ------------- ------------- -------------
Net cash inflow 7 428 662 12 378 788 7 822 104 11 674 211 6 554 706 7 932 578
from operating
activities
Cash flows from
investing
activities
Net cash 2 243 693 (2 035 210) (5 014 331) 244 026 (1 046 341) (3 979 638)
inflow/(outflow)
from investing
activities
------------- ------------- ------------- ------------- ------------- -------------
Net cash inflow 9 672 355 10 343 578 2 807 773 11 918 237 5 513 365 3 952 960
before
financing
activities
------------- ------------- ------------- ------------- ------------- -------------
Cash flows from
financing
activities
Proceeds from - 180 989 180 989 - 77 976 77 976
issue of share
Dividends paid (364 257) (259 748) (407 162) (331 317) (101 961) (205 878)
------------- ------------- ------------- ------------- ------------- -------------
Net increase in 9 308 098 10 264 819 2 581 600 11 586 920 5 489 380 3 825 058
cash and cash
equivalents
Cash and cash 7 879 180 5 297 580 5 297 580 5 600 358 1 775 300 1 775 300
equivalents at
beginning of
period
------------- ------------- ------------- ------------- ------------- -------------
Cash and cash 8 17 187 278 15 562 399 7 879 180 17 187 278 7 264 680 5 600 358
equivalents
at end of period
======== ======== ======= ======== ======== =======
UNAUDITED GROUP RESULTS
RESTATED INFLATION ADJUSTED SEGMENT RESULT REPORT
for the six months ended 30 June 2002
------------Retail banking------------ --------Merchant banking--------
------------Consolidated------------
06/02 06/01 12/01 06/02 06/01 12/01 06/02 06/01 12/01
Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
REVENUE
External 1 651 253 550 647 1 717 442 4 569 386 4 497 909 8 535 476 6 220 639 5 048 556 10 252 918
interest
and
other
revenue
--------- --------- --------- ---------- ---------- ---------- ---------- ----------- -----------
Total 1 651 253 550 647 1 717 442 4 569 386 4 497 909 8 535 476 6 220 639 5 048 556 10 252 918
revenue
======= ======== ======== ======= ======= ======= ======= ======= ========
RESULT
Operating 686 427 254 332 662 548 2 457 347 2 706 485 5 107 830 3 143 774 2 960 817 5 770 378
profit
before
unallocated
expenses
======= ======== ======== ======== ======== ======== ======== ======= ========
Unallocated
corporate
expenses:
Income (1 522 346) (1 043 510) (1 482 726)
taxes
Loss on (1 501 383) (918 833) (2 949 975)
net monetary
position
Minority (58 482) (39 869) (61 480)
interest
---------- ----------- -----------
Profit
attributable
to ordinary
shareholders 61 563 958 605 1 276 197
======== ======= ========
UNAUDITED GROUP RESULTS
RESTATED INFLATION ADJUSTED SEGMENT REPORT
for the six months ended 30 June 2002
------------Retail banking------------ --------Merchant banking--------
---------Consolidated------------
06/02 06/01 12/01 06/02 06/01 12/01 06/02 06/01 12/01
Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
OTHER INFORMATION
Segment 17 120 745 4 798 882 8 418 901 34 433 043 35 625 087 35 213 898 51 553 788 40 423 969 43 632 799
assets
Unallocated
corporate
assets - - - - - - - - 532 539
----------- ---------- --------- ---------- ---------- ----------- ---------- ---------- ----------
Total
assets 17 120 745 4 798 882 8 418 901 34 433 043 35 625 087 33 213 898 51 553 788 40 423 969 44 165 338
========= ======== ======= ======== ======== ========= ======== ======== ========
Segment 17 120 745 4 798 882 8 418 901 28 021 377 29 251 215 28 458 897 45 142 122 34 050 097 36 877 798
liabilities
Unallocated
corporate
liabilities 1 633 845 1 538 645 2 243 238
---------- ---------- ----------
Total 46 775 967 35 588 742 39 121 036
liabilities
======== ======== ========
Capital 645 004 995 681 612 058 320 629 1 040 158 377 917 965 633 2 035 839 989 975
expenditure
Depreciation 42 158 23 961 203 291 54 549 113 644 61 973 96 707 137 605 265 264
UNAUDITED GROUP RESULTS
HISTORICAL SEGMENT REPORT
for the six months ended 30 June 2002
------------Retail banking------------ --------Merchant banking-------- ------------Consolidated------------
06/02 06/01 12/01 06/02 06/01 12/01 06/02 06/01 12/01
Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
REVENUE
External
interest
and other
revenue 1 270 195 217 990 1 099 914 4 421 788 1 899 113 4 284 265 5 691 983 2 117 103 5 384 179
--------- --------- --------- ---------- ---------- ---------- ----------- ----------- -----------
Total
revenue 1 270 195 217 990 1 099 914 4 421 788 1 899 113 4 284 265 5 691 983 2 117 103 5 384 179
======== ======== ======== ======== ======== ======== ======== ======== ========
RESULT
Operating
profit
before
unallocated
expenses 528 019 100 684 308 881 2 452 560 1 147 190 2 644 827 2 980 579 1 247 874 2 953 708
======== ======== ======== ======== ======== ======== ======== ======== ========
Unallocated
corporate
expenses:
Income (1 383 632) (484 259) (1 053 891)
taxes
Minority (61 049) (18 587) (58 244)
interest
----------- ----------- -----------
Profit
attributable to
ordinary shareholders 1 535 898 745 028 1 841 573
======== ======== ========
UNAUDITED GROUP RESULTS
HISTORICAL SEGMENT REPORT (Cont'd)
for the six months ended 30 June 2002
Retail banking Merchant banking Consolidated
06/02 06/01 12/01 06/02 06/01 12/01 06/02 06/01 12/01
Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
OTHER INFORMATION
Segment 15 408 670 2 393 220 7 113 806 35 567 583 16 102 096 23 250 469 50 976 253 18 495 316 30 364 275
assets
- - - - - - - - 378 518
--------- --------- ----------- ---------- ------------ ---------- ---------- ---------- ----------
Total
assets 15 408 670 2 393 220 7 113 806 35 567 583 16 102 096 23 250 469 50 976 253 18 495 316 30 742 793
========= ======== ========= ======== ========= ======== ======== ======== ========
Segment 15 408 670 2 237 250 5 983 979 29 733 452 13 636 984 20 227 993 45 142 122 15 874 234 26 211 972
liabilities
Unallocated
corporate
liabilities 1 657 591 717 320 1 594 447
---------- ---------- ----------
Total
liabilities 46 799 713 16 591 554 27 806 419
======== ======== ========
Capital
expenditure 543 827 394 169 455 105 145 941 318 938 278 775 689 768 713 107 733 880
Depreciation 39 545 9 486 94 776 51 312 46 360 32 337 90 857 55 846 127 113
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 2001.
2. Compliance with International Accounting Standards (IASs)
The Group's interim statements have been prepared in accordance with IASs.
3. Currency
These interim statements are expressed in Zimbabwe dollars.
4. Basis of preparation
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 2002. The comparative figures for the six months ended 30 June
2001 and the financial year ended 31 December 2001 have been restated based on the value current at 30 June 2002. The
income statement for the six month period was derived from monthly index values relative to June 2002. The
comparative income statements have been restated on average index values for the respective periods relative to June
2002.
The interim report was approved by the Board on 27 August 2002.
Indices
The indices used were compiled by the Central Statistical Office of Zimbabwe and are based on the Consumer Price
Index which is the most widely accepted measure of the inflation rate available.
The indices and conversion factors were as follows:
Indices Conversion factors
June 2002 1 642.4 1.00
December 2001 1 167.4 1.41
June 2001 765.7 2.14
IAS 29 discourages the publication of historical results as a supplement to inflation adjusted accounts. The Zimbabwe
Accounting Practices Board and the Zimbabwe Stock Exchange have permitted companies in Zimbabwe to publish historical
results in conjunction with inflation adjusted results.
5. Other income
INFLATION ADJUSTED HISTORICAL
Unaudited Audited
Unaudited Restated Restated Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2002 2001 2001 2002 2001 2001
Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
Net commission and fee 153 314 186 286 495 538 137 125 76 656 246 631
income
Gains less losses from 160 761 534 781 563 403 268 351 218 396 250 636
quoted and
other investments
Broking income 254 686 164 386 481 640 237 354 65 660 183 389
Profit on disposal of 1 039 8 698 38 549 612 3 103 24 688
fixed assets
Other operating income 49 969 7 604 64 044 49 524 2 962 29 857
----------- ----------- ------------ ----------- ----------- ------------
619 769 901 754 1 643 174 692 966 366 777 735 201
======= ======= ======= ======= ======= =======
6. Operating expenditure
The operating profit is after charging the following:
Administration costs 448 683 284 699 624 295 415 876 117 398 294 958
Depreciation 96 707 137 605 265 264 90 857 55 846 127 113
- Fixed assets - 2 741 3 012 - 1 132 1 404
leased to customers
- Own assets 96 707 134 864 262 252 90 857 54 714 125 709
Staff costs 503 540 610 906 1 304 816 393 285 250 485 718 230
------------- ------------- ------------- ------------- ------------- -------------
1 048 930 1 033 210 2 194 375 900 018 423 696 1 140 301
======== ======== ======== ======== ======== =======
7. Earnings per share
7.1 Basic earnings per share - Inflation adjusted
The calculation of inflation adjusted basic earnings per share for the six months ended 30 June 2002 of 14.8
cents (2001 - 237.8 cents) is based on the profit after taxation attributable to ordinary shareholders of Z$61 563
000 (2001 - Z$958 605 000) and the weighted average shares in issue of 415 991 100 (2001- 403 165 518). The
calculation of basic earnings per share for the year ended 31 December 2001 of 311.6 cents is based on the profit
after tax attributable to ordinary shareholders of Z$1 276 197 000 and on 409 578 313 weighted average shares in
issue.
Basic earnings per share - Historical
The calculation of historical basic earnings per share for the six months ended 30 June 2002 of 369.2 cents (2001 -
184.8 cents) is based on profit after taxation attributable to ordinary shareholders of Z$1 535 898 000 (2001 - Z$745
028 000) and the weighted average shares in issue of 415 991 100 (2001 - 403 165 532). The calculation of basic
earnings per share for the year ended 31 December 2001 of 449.6 cents is based on the profit after tax attributable
to ordinary shareholders of Z$1 841 573 000 and on 409 578 313 weighted average shares in issue.
7.2 Headline earnings per share - Inflation adjusted
The calculation of inflation adjusted headline earnings per share for the six months ended 30 June 2002 of 14.6 cents
(2001 - 236.3 cents) is based on adjusted profit after taxation attributable to ordinary shareholders of Z$60 844 000
(2001 - Z$952 595 000) and the weighted average shares in issue of 415 991 100 (2001 - 403 165 518). The calculation
of headline earnings per share for the year ended 31 December 2001 of 305.1 cents is based on the adjusted profit
after tax attributable to ordinary shareholders of Z$1 249 559 000 and on 409 578 313 weighted average shares in
issue.
Headline earnings per share - Historical
The calculation of historical headline earnings per share for the six months ended 30 June 2002 of 369.1 cents (2001
- 184.2 cents) is based on adjusted profit after taxation attributable to ordinary shareholders of Z$1 535 476 000
(2001 - Z$742 884 000) and the weighted average shares in issue of 415 991 100 (2001 - 403 165 532). The calculation
of headline earnings per share for the year ended 31 December 2001 of 445.5 cents is based on the adjusted profit
after tax attributable to ordinary shareholders of Z$1 824 514 000 and on 409 578 313 weighted average shares in
issue. The adjustments were as follows:-
INFLATION ADJUSTED HISTORICAL
Unaudited Audited
Unaudited Restated Restated Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2002 2001 2001 2002 2001 2001
Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
Profit 61 563 958 605 1 276 197 1 535 898 745 028 1 841 573
attributable
to shareholders
Deduct non-recurring
items:
Profit on disposal of:
Fixed assets (1 039) (8 698) (38 549) (612) (3 103) (24 688)
Tax effect 320 2 688 11 911 190 959 7 629
---------- ---------- --------- ---------- ---------- --------
60 844 952 595 1 249 559 1 535 476 742 884 1 824 514
====== ====== ====== ======= ====== ======
Weighted
average number of
shares ('000s) 415 991 403 166 409 578 415 991 403 166 409 578
====== ====== ====== ======= ====== ======
The headline earnings are 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.
7.3 Diluted earnings per share - Inflation adjusted
The inflation adjusted diluted earnings per share for the six months ended 30 June 2002 is 14.8 cents (2001 - 230.6
cents). The calculation is based on profit after taxation attributable to ordinary shareholders of Z$61 563 000 (2001
- Z$958 605 000) and on shares of 416 611 100(2001 - 415 713 858). The calculation of diluted earnings per share for
the
year ended 31 December 2001 of 311.4 cents is based on profit after taxation attributable to ordinary shareholders of
Z$1 276 197 000 and on diluted shares of 409 851 113.
Diluted earnings per share - Historical
The historical diluted earnings per share for the six months ended 30 June 2002 is 368.7 cents (2001 - 179.2 cents).
The calculation is based on profit after taxation attributable to ordinary shareholders of Z$1 535 898 000 (2001 -
Z$745 028 000) nd on shares of 416 611 100 (2001 - 415 713 858). The calculation of diluted earnings per share for
the year ended 31 December 2001 of 449.3 cents is based on profit after taxation attributable to ordinary
shareholders of Z$1 841 573 000 and on diluted shares of 409 851 113.
7.4 Diluted headline earnings per share - Inflation adjusted
The inflation adjusted diluted headline earnings per share for the six months ended 30 June 2002 is 14.6 cents (2001
- 229.2 cents). The calculation is based on adjusted profit after taxation of Z$60 844 000 (2001 - Z$952 595 000) and
on shares of 416 611 100 (2001- 415 713 858). The calculation of diluted headline earnings per share for the year
ended 31 December 2001 of 304.9 cents is based on adjusted profit after taxation of Z$1 249 559 000 and on diluted
shares of 409 851 113.
Diluted headline earnings per share - Historical
The historical diluted headline earnings per share for the six months ended 30 June 2002 is 368.6 cents (2001 - 178.7
cents). The calculation is based on adjusted profit after taxation of Z$1 535 476 000 (2001 - Z$742 884 000) and on
shares of 416 611 100 (2001 - 415 713 858). The calculation of diluted headline earnings per share for the year ended
31 December 2001 of 445.2 cents is based on adjusted profit after taxation of Z$1 824 514 000 and on diluted shares
of 409 851 113.
8. Cash and Cash Equivalents
INFLATION ADJUSTED HISTORICAL
Unaudited Audited
Unaudited Restated Restated Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2002 2001 2001 2002 2001 2001
Z$'000 Z$'000 Z$'000 Z$'000 Z$'000 Z$'000
Balances
with banks
and cash 4 392 560 766 639 1 376 537 4 392 560 357 409 978 414
Government
and public
sector
securities 11 784 231 3 913 741 4 115 282 11 784 231 1 824 595 2 925 057
Bills
receivable 1 010 487 10 882 019 2 387 361 1 010 487 5 082 676 1 696 887
--------------- -------------- -------------- -------------- ------------- --------------
17 187 278 15 562 399 7 879 180 17 187 278 7 264 680 5 600 358
========= ======== ======== ======== ======== =======
9. Share capital
9.1 Authorised
The authorised ordinary share capital at 30 June 2002 is at the historical figure of Z$140 000 000
(2001 - Z$140 000 000) comprising 560 000 000 ordinary (2001 - 560 000 000) shares of Z$0.25 each.
9.2 Issued and fully paid
The issued share capital at 30 June 2002 is at the historical figure of Z$103 998 000
(2001 - Z$103 998 000) comprising 415 991 100 (2001 - 415 991 100) ordinary shares of Z$0.25 each.
10. Taxation
The effective tax rate for the six months ended 30 June 2002 is 92.7% compared to 51.1% for the six months ended 30
June 2001 and 52.6% for the year ended 31 December 2001. The high effective tax rates are due to the significant
losses on the net monetary positions which are not recognised for tax purposes.
11. Exchange rates
The official exchange rates applied were as follows:
30 June 30 June 31 December
2002 2001 2001
British Sterling GBP 1.00 Z$84.00 Z$77.48 Z$82.07
United States Dollar USD 1.00 Z$55.00 Z$55.00 Z$55.00
South African Rand ZAR 1.00 Z$5.25 Z$6.83 Z$7.29
Dividend Announcement
The Board declared an interim dividend of 73.8 cents per share on 415 991 100 shares payable to shareholders
registered in the books of the Company on 13 September 2002. The Board has resolved to offer all shareholders the
opportunity to receive their interim dividend either in cash or in the form of shares. No brokerage costs will be
incurred on the scrip option.
Shareholders representing 51% of the company's issued share capital have indicated a willingness to take the scrip
option. Details on the scrip dividend option will be posted to shareholders on 17 September 2002. The transfer books
and register of shareholders will be closed from 13 September to 19 September 2002. The dividend 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.
Dividend cheques and share certificates will be mailed to shareholders on or about 24 October 2002.
By Order of the Board
M B Narotam
Secretary
27 August 2002
Transfer Secretaries:
In Zimbabwe In UK
First Transfer Secretaries Computershare Services PLC
13th Floor Caxton House
Century Towers Redcliff Way
45 Samora Machel Avenue Bristol
P O Box 11 BS99 7NH
HARARE UK
Secretary:
M B Narotam
Registered Office Branch Office
Head Office Bulawayo Office
1st Floor NMB Centre
Unity Court Corner George Silundika Avenue/Leopold
Corner First Street/Kwame Nkrumah Avenue Takawira Street
HARARE BULAWAYO
Zimbabwe Zimbabwe
Telephone Telephone
(263-4) 759651 (263-9) 70169
Facsimile Facsimile
(263-4) 759648 (263-9) 68535
(263-4) 781119
Website:
http://www.nmbz.co.zw
http://www.nmbz.com
Email:
enquiries@nmbz.co.zw
This information is provided by RNS
The company news service from the London Stock Exchange
END
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