Last checked at 6 Oct 2009 14:11
ZCCM Investments Holdings Plc
Incorporated in the Republic of Zambia
ZCCM INVESTMENTS HOLDINGS Plc
And its subsidiaries
DIRECTORS' HALF YEARLY SUMMARY
For the period ended 30th June 2009
In compliance with the requirements of the "Securities Act, Cap 354 of the Laws of Zambia" and the listing rules of the Lusaka Stock Exchange, ZCCM Investments Holdings PLC announces the unaudited results for the half year ended 30 June 2009.
The Group achieved a turnover of K84, 567 million during the six month period ended 30 June 2009 which was slightly above the turnover of K84, 100 million for the six months to 30 June 2008.
The increase was mainly due to dividends received of K19, 804 million for the six months to 30 June 2009 compared to K12, 594 million for the six months ended 30 June 2008. This was attributed to the receipt of dividends from Copperbelt Energy Corporation Plc (CEC) and Kansanshi Mining Plc.
There was also increased production of coal at Maamba Collieries Limited (MCL) following the partial rehabilitation of the mine, which resulted in coal sales for the period to 30 June 2009 of
K834 million compared to K110 million for the six months to 30 June 2008.
However, there was no Price Participation payment (Deferred Consideration) received during the period under review compared to K8, 973 million for the period to 30 June 2008 because the conditions triggering a payment by the associate companies, Konkola Copper Mines Plc (KCM) and Chambishi Metals Plc, were not met.
Lime sales at Ndola Lime Company Limited (NLC) increased to K63, 420 million for the period to 30 June 2009 as compared to K61, 914 million for the period to 30 June 2008. This was mainly attributed to an increase in the quantity of Limestone products sold resulting from increased demand in the copper industry during the period under review compared to the period to 30 June 2008.
The cost of turnover for the six months to 30 June 2009 was K84, 741 million compared to
K83, 535 million for the period to 30 June 2008. The increase in cost of turnover was mainly as a result of the provision for employee benefits for the period under review.
However, there was a comparative decrease in cost of turnover attributed to the reduction in the price of Heavy Fuel Oil at NLC coupled with reduced utilization of the less efficient rotary kiln in the production of lime compared to the period to June 2008. The rotary kiln utilizes double the heavy fuel oil when in operation compared to the vertical kiln. There was also a reduction in cost of turnover at MCL due to improved processing efficiency owing to the partial rehabilitation of the mine.
The depreciation of the Kwacha against the United States dollar (US$) in the period under review resulted in a loss of K90, 351 million compared to K111, 953 million profit for the period to June 2008, after the translation of foreign denominated liabilities. This was attributed to the Kwacha depreciating against the US$ from K4, 810 as of 1 January 2009 to K5, 181 as of 30 June 2009 which resulted in an Exchange loss of K73, 482 million for the period to 30 June 2009 compared to an exchange gain of K130, 838 million for the period to 30 June 2008.
Future Outlook
The global financial crisis has had a negative impact on the mining sector. This has resulted in lower commodity prices and reduced output. In reaction, most of the mines have adopted cost rationalization activities. Recently however there have been improvements in base metal prices, which have raised the prospects of dividend receipts. With the improved and positive outlook of metal prices, increased production in the mining sector and the improved fiscal regime for mines, ZCCM-IH expects associate mining companies to consistently declare and remit dividends.
By Order of the Board
C Chabala
Acting Company Secretary
29 September 2009
ZCCM INVESTMENTS HOLDINGS PLC
And its Subsidiaries
GROUP PROFIT/ (LOSS) ACCOUNT AS AT 30 JUNE 2009
| SIX MONTHS ENDED | SIX MONTHS ENDED | |||
| 30 JUNE 2009 | 30 JUNE 2008 | |||
|
|
| |||
| Consolidated | Consolidated | |||
| K' million | K' million | |||
| Turnover | 84,567 | 84,100 | ||
| Cost of turnover | (84,741) | (83,535) | ||
| Operating profit/(loss) | (174) | 565 | ||
| Exchange gain/(loss) | (73,482) | 130,838 | ||
| Environmental expenses | (11,961) | (11,541) | ||
| Interest charge | (4,135) | (6,786) | ||
| Royalty on minerals | (1,446) | (1,243) | ||
| Other Income | 2,149 | 2,092 | ||
| Profit/(loss) before taxation | (89,049) | 113,925 | ||
| Income tax | (1,302) | (1,972) | ||
| Retained profit/(loss) | (90,351) | 111,953 | ||