Last checked at 31 Jan 2017 15:54
ZCCM INVESTMENTS HOLDINGS PLC
(Incorporated in the Republic of Zambia)
Company registration number: 771
Share Code: ZCCM-IH
ISIN: ZM0000000037
["ZCCM-IH" or "the Company"]
DIRECTORS' HALF YEARLY INTERIM SUMMARY FOR THE PERIOD ENDED 30th SEPTEMBER 2016:
Introduction
In compliance with the requirements of the "Securities Act, Cap 354 of the Laws of Zambia" and the Listing Rules of the Lusaka Securities Exchange, ZCCM Investments Holdings Plc announces the unaudited results for the six months' period ended 30th September 2016.
Financial Performance
The Group achieved a turnover of K65.5 million for the six-month period ended 30th September 2016 which was 49% below the turnover of K128.4 million achieved during the six months to 30th September 2015. The decrease in Group turnover was mainly as a result of a decrease in turnover for Ndola Lime Company by 46% from K116.5 million to K62.5 million for the period under review. No Dividends were earned for the period ended 30th September 2016 (September 2015: K11.9 million).
The Group recorded an operating loss of K65 million (Sept 2015:K31million). The Group's share of profit in associate companies was K58.6 million (September 2015: Loss: K1 546 million). The performance of the associate companies improved on account of cost containment measures instituted in the midst of the low copper prices. The price of copper reduced to US$4 790 per ton as at 30th September 2016 compared to US$4,970 per ton as at 30th September 2015 representing a 4% decrease. Overall the Group recorded an after tax loss of K134.7 million (September 2015: Loss K601.4 million).
Operations and Strategic developments
On 6th June 2016 ZCCM-IH filed a Claim Form with the English High Court to recover outstanding sums in excess of US$100 million due to it from KCM, pursuant to the terms of the Settlement Agreement entered into in 2013. On 16 December 2016, ZCCM-IH was successful in its application for default judgment. KCM was ordered to pay all sums owed to ZCCM-IH pursuant to the Settlement Agreement (plus associated contractual interest) within thirty (30) days. The total amount to be paid by KCM amounted to approximately US$103 million. KCM was also ordered to reimburse ZCCM-IH 80% of the costs it had incurred in pursuing its claim. Further directions were given to determine whether KCM made payments to Vedanta Group Companies in breach of the prohibition on doing so under the Settlement Agreement. If and to the extent it is determined that such payments were made, ZCCM-IH will be entitled to recover additional sums from KCM.
In April 2016, ZCCM-IH fully underwrote the Investrust Rights Offer and ended up with 48.6% shareholding in the bank. Subsequently, ZCCM-IH made an application for waiver of a mandatory offer to the Securities and Exchange Commission (SEC) and the SEC approved the application on condition that ZCCM-IH sold down its shareholding to below 35% within 12 months. The 35% shareholding is the trigger for a mandatory offer. ZCCM-IH has since sold 3.2% of its shares in the bank and is currently at 45.4% shareholding.
ZCCM-IH continued to provide financial support towards the completion of the Ndola Lime Recapitalisation Project. The Project is expected to increase the company's production volume at a reduced unit cost of production by using alternative cheaper fuel. Further, the Project is expected to be commissioned in the first quarter of 2017.
Subsequent events to 30 September 2016
ZCCM-IH also filed a Notice of Arbitration on 26th October 2016 in London against Kansanshi Holdings Limited and Kansanshi Mining PLC. Further, on 28th October 2016 ZCCM-IH commenced Legal Proceedings in Lusaka against First Quantum Limited, FQM Finance Limited, Philip K.R. Pascal, Arthur Mathias Pascal, Clive Newall, Martin R. Rowley and Kansanshi Mining PLC for various Claims arising from transactions between Kansanshi Mining Plc and FQM Finance Limited.
The following Non- Executive Directors were appointed to the Board of ZCCM-IH on the dates indicated:
1. Mr Teddy D Mulonga (31 October 2016)
2. Mr Fredson K Yamba - Vice Chairperson (15 December 2016)
3. Mr Paul M Chanda (15 December 2016)
4. Mr Mateyo C Kaluba (15 December 2016)
The said appointments replaced the directors who were retired in July 2016. Thus, the Company now has a quorate board.
In August 2016 and November 2016, Maamba Collieries Limited (MCL) commissioned the production of first and second 150 MW respectively, of the Thermal Power.
With regard to Copperbelt Energy Corporation Plc (CEC), the company held an Extraordinary General Meeting on 9th December 2016, where the shareholders approved the demerger of CEC Africa Investments Limited (CEC Africa) from CEC Plc by way of a dividend in specie in the ratio of one CEC Africa share for each share held in CEC Plc.
CONSOLIDATED GROUP INCOME STATEMENT FOR THE SIX MONTHS ENDED 30TH SEPTEMBER 2016 (UNAUDITED)
K'000 | ||||||
30-Sep-16 | 30-Sep-15 | |||||
Revenue | 65,470 | 128,394 | ||||
Cost of sales | (50,547) | (100,617) | ||||
Gross profit | 14,922 | 27,777 | ||||
Other income | 4,803 | 5,332 | ||||
Environmental expenses | (66) | (2,014) | ||||
Administration expenses | (84,734) | (62,163) | ||||
Operating profit/(Loss) | (65,076) | (31,068) | ||||
Finance costs | (101,567) | (408,101) | ||||
Finance income | 28,036 | 1,391,166 | ||||
Net finance income | (73,531) | 983,065 | ||||
Share of profit/(loss) of equity accounted investees | 58,626 | (1,546,688) | ||||
Loss before tax | (79,981) | (594,691) | ||||
Income tax | (54,737) | (6,706) | ||||
Loss from continuing operations | (134,717) | (601,397) | ||||
Retained loss | (134,717) | (601,397) | ||||
EPS | (0.84) | (3.74) |
CONSOLIDATED GROUP STATEMENT OF FINANCIAL POSITION FOR THE SIX MONTHS ENDED 30th SEPTEMBER 2016 (UNAUDITED)
K'000 | ||||
30-Sep-16 | 30-Sep-15 | |||
Assets Employed | ||||
Non-Current Asset | 9,694,731 | 11,304,607 | ||
Current Assests | 781,642 | 1,624,205 | ||
Total Assets | 10,476,373 | 12,928,812 | ||
Equity and Liabilities | ||||
Shareholders' Funds | 8,889,391 | 11,982,934 | ||
Non-Current Liabilities | 710,838 | 457,446 | ||
Current Liabilities | 876,144 | 488,433 | ||
Total Equity and Liabilities | 10,476,373 | 12,928,813 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30TH SEPTEMBER 2016 (UNAUDITED)
K'000 | |||||
Share capital | Share premium | Total Reserves | Retained earnings | Total | |
Balance at 1 April 2015 | 1,608 | 2,089,343 | 2,221,476 | 3,057,532 | 7,369,959 |
Total comprehensive income | |||||
Profit | - | - | - | (2,303,414) | (2,303,414) |
Currency translation - equity accounted investees | - | - | 4,429,650 | - | 4,429,650 |
Revaluation surplus on PPE, net of tax | - | - | 12,286 | - | 12,286 |
Amortisation of revaluation surplus | - | - | (941) | 941 | - |
Actuarial loss on defined benefit, net of tax | - | - | - | 639 | 639 |
Balance at 31 March 2016 | 1,608 | 2,089,343 | 6,662,471 | 755,698 | 9,509,120 |
Balance at 1 April 2016 | 1,608 | 2,089,343 | 6,662,471 | 755,698 | 9,509,120 |
Total comprehensive income | |||||
Profit | - | - | - | (134,717) | (134,717) |
Currency translation - equity accounted investees | - | - | (485,012) | - | (485,012) |
Balance at 30 September 2016 | 1,608 | 2,089,343 | 6,177,459 | 620,981 | 8,889,391 |
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30TH SEPTEMBER 2016 (UNAUDITED)
K'000 | |||
Cash flows from operating activities | Sep-16 | Sep-15 | |
(Loss)/ Profit | (134,717) | (601,397) | |
Adjustments for: | |||
Depreciation and Amortisation | 18,256 | 10,437 | |
Interest income | (4,803) | (80,001) | |
Interest expense | 3,862 | 1,685 | |
Exchange differences/interest on borrowings | 93,291 | 25,243 | |
Fair value change on investment property | - | (53) | |
Share of profit of equity - accounted investees, net of tax | (58,626) | 1,546,688 | |
Profit on disposal of property, plant and equipment | - | (144) | |
Tax expense | 54,737 | 6,706 | |
Change in: | (28,000) | 909,164 | |
Inventories | (1,804) | 2,250 | |
Trade and other receivables | (45,252) | (691,214) | |
Trade and other payables and provisions | 143,850 | 21,733 | |
Provision for environmental rehabilitation | - | (157) | |
Cash generated from operating activities | 68,794 | 241,776 | |
Interest paid | (3,862) | (1,685) | |
Tax paid | (4,474) | (44,057) | |
Retirement benefits paid | (1,358) | (4,632) | |
Net cash from operating activities | 59,100 | 191,402 | |
Cash flows from investing activities | |||
Interest received | 4,803 | 80,001 | |
Proceeds from disposal of property, plant and equipment | - | 144 | |
Acquisition of PPE and intangible assets | (142,782) | (221,378) | |
Proceeds on maturity of fixed deposits | 321,966 | (579,089) | |
Acquisition of held to maturity investments | (133,239) | 514,007 | |
Acquisition of financial Assets at fair value through P & L | (4,239) | - | |
Net cash used in investing activities | 46,509 | -206,315 | |
Cash flows from financing activities | |||
Repayment of borrowings | (24,855) | (4,651) | |
Net cash used in/ from financing activities | (24,855) | (4,651) | |
Net (decrease)/ increase in cash and cash equivalents | 80,754 | (19,564) | |
Cash and cash equivalents at 1 April | 35,582 | 43,782 | |
Cash and cash equivalents at 30 September | 116,336 | 24,218 |
By Order of the Board
Chabby Chabala
Company Secretary
Issued in Lusaka, Zambia on 23 January 2017
T | +260-211-232456 E | advisory@sbz.com.zm W | www.sbz.com.zm Stockbrokers Zambia Limited (SBZ) is a founder member of the Lusaka Securities Exchange and is regulated by the Securities and Exchange Commission of Zambia | |
First Issued on 23 January 2017 | |