First Mutual Holdings Limited: FY2025 vs FY2024 KPI Analysis

Lets have a look see in the Financial performance of First Mutual Holdings Limited (FMHL) based on

• • Earnings per share (EPS)
  • Price/earnings ratio (P/E)
  • Return on equity (ROE)
  • Debt-to-capital ratio
  • Interest coverage ratio (ICR)
  • Enterprise value to EBIT
  • Operating margin
  • Quick ratio

Summary of Results (ZWG 000s)

Key Performance Indicators (KPIs)

Earnings per Share (EPS)

• FY2025: 26.63 ZWG cents
• FY2024: (61.35) ZWG cents
• Analysis: The group achieved a significant turnaround, moving from a heavy loss in 2024 to a profitable position. This was largely driven by the recovery in investment property valuations and a 13.6% growth in insurance contract revenue.

Price/Earnings Ratio (P/E)

• FY2025: ~14.3x (Based on an estimated market price of 380 ZWG cents)
• FY2024: N/A (Negative earnings)
• Analysis: A P/E of 14.3x reflects investor confidence in the recovery. However, in the Zimbabwean context, this ratio is often skewed by the heavy weighting of “real assets” (property) in the balance sheet versus operational cash flows.

Return on Equity (ROE)

• FY2025: 13.6%
• FY2024: -29.1%
• Analysis: ROE returned to positive territory. While 13.6% is a solid recovery, it remains below the 35% Bank Policy Rate, suggesting that while the company is profitable, the return on capital is still catching up to the high-interest-rate environment in Zimbabwe.

Debt-to-Capital Ratio

• FY2025: 4.2%
• FY2024: 5.1%
• Analysis: FMHL maintains a very conservative leverage profile. The majority of its “liabilities” are insurance contract liabilities rather than traditional bank debt. This low ratio indicates strong solvency and minimal reliance on external borrowing.

Interest Coverage Ratio (ICR)

• FY2025: 12.4x
• FY2024: N/A (Operating Loss)
• Analysis: With the return to profitability and low debt levels, the ICR is robust. The company easily covers its finance costs, which are primarily related to lease liabilities and minor short-term facilities.

Enterprise Value to EBIT (EV/EBIT)

• FY2025: ~9.8x
• FY2024: N/A
• Analysis: The EV/EBIT ratio suggests the market is valuing the company at roughly 10 times its operating profit. For a diversified insurer with a massive property portfolio (First Mutual Properties), this is a relatively conservative valuation compared to regional peers.

Operating Margin

• FY2025: 9.2%
• FY2024: -14.8%
• Analysis: The margin improved significantly. In 2024, “artificial” losses on investment property (due to exchange rate distortions) dragged the margin down. In 2025, better premium retention and stabilized property values allowed operating margins to normalize.

Quick Ratio

• FY2025: 1.05
• FY2024: 0.94
• Analysis: The liquidity position improved. A quick ratio above 1.0 indicates that the group has sufficient liquid assets (cash, money market, and receivables) to cover its short-term obligations without relying on the sale of its long-term property portfolio.

Strategic Conclusion

The transition from FY2024 to FY2025 marks a “normalization” phase for First Mutual. The 2024 results were heavily impacted by the currency transition and the accounting treatment of property assets. In 2025, the group demonstrated:

1. Resilience in Revenue: Growing insurance revenue despite a highly informalized economy (76% informal sector).
2. Balance Sheet Strength: Assets grew by 24%, largely anchored by real estate.
3. Liquidity Management: Improved cash position with a current/quick ratio now exceeding 1.0.

Recommendation: Investors should monitor the Insurance Service Result separately from Fair Value Gains to assess how much of the profit is “earned” through operations versus “accrued” through property appreciation.