ESWATINI HELPS BOOST VUNANI PROFIT

MBABANE - Vunani Group has realised a net profit after tax of E40.7 million for the period ended August 31, 2021.

This is an increment of 11.54 per cent when compared to last year’s profit of E36.0 million. This is per the group’s interim results presented virtually yesterday. The group has five reportable segments being, fund management, asset administration, advisory services, institutional securities broking and insurance. The fund management and other investment segments are geographically located in South Africa and, on a smaller scale, in Botswana.

The insurance segment is located here in Eswatini. The insurance segment includes the group’s investment in Oracle Insurance and Oracle Life. On May 31 this year, Oracle Insurance acquired 75 per cent of Medscheme Holdings Proprietary Limited for a nominal consideration. The segment contributed revenue of E126.7 million (2020: E107.1 million) and profit of E7.1 million in the current period compared to E5.7 million in August 2020. An after tax loss of E2.4 million has been included in Vunani’s profit or loss for the period ended  August  31,2021, E1.5 million of this profit is attributable to non-controlling interests.  

Included

At least E2.1 million has been included in Vunani’s revenue since the acquisition of Medscheme for the period June 1, 2021 to August 31, 2021. The acquisition resulted in the recognition of a bargain purchase gain of E0.9 million at acquisition date which has been presented separately as part of other income in the statement of comprehensive income. “Trade receivables acquired are at fair value and are expected to be collected in their entirety. No contingent liabilities arose as a result of the business combination. The valuation of the non-controlling interest was based on the fair value of the net asset value of Medscheme at acquisition date and amounted to E1.5 million,” shared the group.

Revenue from continuing operations include trading revenue, fees earned from advisory services, brokerage, fund management fees, asset administration fees and insurance premiums. The unaudited financial statements have been prepared on a going concern basis. Management has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future and that the group will extinguish liabilities in the normal course of business at the amounts stated in the condensed consolidated financial statements.

“The board is of the view that, based on its knowledge of the group, assumptions regarding the outcome of the key processes under way and specific inquiries it has made, the group has adequate resources at their disposal to settle obligations as they fall due and the group will continue as going concern for the foreseeable future. The group continues to monitor the impact of COVID-19 on its revenue and will adjust its cost base if required,” Vunani shared.

Assesment

The directors have made an assessment of the ability of the company and its subsidiaries to continue as going concerns and have no reason to believe the businesses will not continue as going concerns for the foreseeable future. Following the decision to restructure the group’s assets, the fund management operations in Malawi, Zimbabwe and the private equity segments has been shown as a discontinued operation. Comparative segmental disclosures have been adjusted to reflect the impact of the discontinued operations.

Meanwhile, back in 2019 there was a transaction between MMI Holdings Limited and Vunani Limited. The latter, together with Metropolitan Life Swaziland management, acquired the majority stake of 67 per cent in MMI’s Eswatini insurance business, Metropolitan Life Swaziland and its wholly owned subsidiary Momentum Insurance Swaziland Limited.

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