13 Jun 2017 15:40
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"]
ABRIDGED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31
MARCH 2016
In accordance with the requirements of the Securities Act No. 41 of 2016, ZCCM-IH Plc announces its audited annual financial statements for the year ended 31 March 2016.
ABRIDGED GROUP STATEMENT OF COMPREHENSIVE INCOME YEAR ENDED 31 MARCH 2016
Audited | Audited | ||
2016 | 2015 | ||
ZMW'000 | ZMW'000 | ||
Revenue | 198,661 | 241,989 | |
Gross profit | 18,293 | 111,116 | |
Operating profit/(loss) | (857,921) | (2,179,453) | |
Net finance income | 203,247 | 569,950 | |
Share of (loss)/profit of equity accounted investees | (2,210,199) | 280,535 | |
Loss before tax | (2,864,873) | (1,328,968) | |
Income tax credit/(expense) | (47,356) | 341,851 | |
Loss for the period | (2,912,229) | (987,117) | |
Items that will never be reclassified to profit or loss | |||
Revaluation of PPE | 16,748 | 9,289 | |
Deferred tax on revaluation | (4,733) | (3,717) | |
Actuarial (loss)/gain on defined benefit pension plans | 983 | (101) | |
Deferred tax on defined benefit actuarial loss | (344) | 35 | |||
Equity-accounted investees- share of OCI | (204) | - | |||
12,450 | 5,506 | ||||
Items that are or maybe reclassified to profit or loss | |||||
Foreign currency translation differences-equity-accounted investees | 4,122,445 | 597,689 | |||
Equity-accounted investees- share of OCI | (266,397) | - | |||
Other comprehensive income for the year net of tax | 3,856,048 | 597,689 | |||
Total comprehensive income for the year | 956,269 | (383,922) | |||
Earnings per share (K) | (18.11) | (6.14) | |||
Basic and diluted earnings per share (K) | (18.11) | (6.14) | |||
ABRIDGED GROUP STATEMENT OF FINANCIAL POSTION | Audited | Audited | |
AS AT 31 MARCH | 2016 | 2015 | |
ASSETS | ZMW'000 | ZMW'000 | |
Property, plant and equipment | |||
1,030,284 | 775,616 | ||
Intangible assets | |||
673 | 1,030 | ||
Investment property | |||
100,778 | 15,000 | ||
Investments in associates | |||
6,852,955 | 5,886,415 | ||
Financial assets at fair value through profit or loss | |||
238,247 | 290,229 | ||
Inventories | |||
35,349 | 53,097 | ||
Trade and other receivables | |||
449,660 | 278,836 | ||
Deferred tax assets | |||
698,304 | 646,046 | ||
Held-to-maturity investment securities | |||
355,172 | 514,007 | ||
Cash and cash equivalents | |||
35,850 | 43,782 | ||
Total Assets | 9,797,272 | 8,504,058 | |
EQUITY AND LIABILITIES | |||||
Capital and Reserves | |||||
8,326,228 | 7,369,959 | ||||
Borrowings | |||||
292,644 | 267,453 | ||||
Deferred tax liabilities | |||||
211,786 | 292,820 | ||||
Trade and other payables | |||||
286,271 | 186,299 | ||||
other Provisions | |||||
139,197 | 98,538 | ||||
Retirement benefits | |||||
44,794 | 50,330 | ||||
Provisions for environmental rehabilitation | |||||
263,491 | 108,228 | ||||
Current tax liabilities | 232,542 | 130,431 | |||
Bank overdraft | 319 | - | |||
9,797,272 | 8,504,058 | ||||
ABRIDGED GROUP STATEMENT OF CASH FLOW | Audited | Audited | |||
2016 | 2015 | ||||
ZMW'000 | ZMW'000 | ||||
Net cash flow from operating activities | 131,638 | 529,297 | |||
Net cash used in investing activities | (75,329) | (508,253) | |||
Net cash outflow on financing | (64,204) | (251,625) | |||
(Decrease)/increase in cash and cash equivalents | (7,895) | (230,581) | |||
Effect of movement in exchange rates on cash held | (356) | - | |||
Cash and cash equivalents at the beginning of the year | 43,782 | 274,363 | |||
Cash and cash equivalents at the end of the year | 35,531 | 43,782 | |||
STATEMENT OF CHANGES IN
EQUITY
FOR THE YEAR ENDED 31 | Share | Share | Revaluation | Translation | Retained | Total | ||
capital | premium | reserve | reserve | earnings | ||||
MARCH 2016 | ||||||||
Balance at 1 April 2014 | 8,367 | |||||||
1,608 | 2,089,343 | 1,610,063 | 4,295,351 | 8,004,732 | ||||
Total comprehensive income | ||||||||
Profit | ||||||||
- | - | - | - | (987,117) | (987,117) | |||
Other comprehensive income: | - | |||||||
Revaluation surplus on PPE | 9,289 | |||||||
9,289 | ||||||||
Deferred tax on revaluation reserve | (3,717) | |||||||
(3,717) | ||||||||
Currency translation - equity accounted | - | - | - | |||||
investees | - | 597,689 | 597,689 | |||||
Amortisation of revaluation surplus | - | - | - | - | - | - | ||
Deferred tax on revaluation reserve | - | (215) | - | - | ||||
- | 215 | |||||||
Actuarial loss on defined benefit | - | - | - | |||||
- | (101) | (101) | ||||||
Deferred tax on defined benefit | - | - | - | |||||
actuarial loss | - | 35 | 35 | |||||
Total comprehensive income | - | - | 5,357 | 597,689 | (986,968) | (383,922) | ||
Transaction with owners of the | ||||||||
Company - Contributions | ||||||||
Payment of dividend | - | - | - | - | ||||
(250,851) | (250,851) | |||||||
Total transactions with owners of the | - | - | ||||||
Company | - | - | (250,851) | (250,851) | ||||
Balance at 31 March 2015 | 13,724 | |||||||
1,608 | 2,089,343 | 2,207,752 | 3,057,532 | 7,369,959 | ||||
Balance at 1 April 2016 | 1,608 | 2,089,343 | ||||||
13,724 | 2,207,752 | 3,057,532 | 7,369,959 | |||||
Total comprehensive income | ||||||||
Loss for the year | ||||||||
- | - | (2,912,229) | (2,912,229) | |||||
Other comprehensive income: | ||||||||
Currency translation - equity accounted | - | |||||||
investees | - | 4,122,445 | 4,122,445 | |||||
Revaluation surplus on PPE | 16,748 | |||||||
16,748 | ||||||||
Deferred tax on revaluation reserve | (4,733) | |||||||
(4,733) | ||||||||
Amortisation of revaluation surplus | - | (941) | ||||||
- | 941 | 0 | ||||||
Actuarial loss on defined benefit | - | |||||||
- | 983 | 983 | ||||||
Share of associates'OCI | 235,217 | |||||||
(501,818) | (266,601) | |||||||
Deferred tax on defined benefit | - | |||||||
actuarial loss | - | (344) | (344) | |||||
Total comprehensive income | - | - | 246,291 | 3,620,627 | (2,910,649) | 956,269 | ||
Balance at 31 March 2016 | ||||||||
1,608 | 2,089,343 | 260,015 | 5,828,379 | 146,883 | 8,326,228 | |||
Commentary
• Performance of the Group continued to be impacted by low global copper prices coupled with low production. The price of copper on the LME further fell from US$6,052/ton at 31 March 2015 to US$4,848/ton at 31 March 2016. As a result, most of the investee companies recorded significant operating losses during the period. Further, the Kwacha depreciated by 48% from K7.5755/US$ as at 31 March 2015 to K11.1800/US$ as at 31 March 2016. This had a significant impact on the Group results.
• Operating loss reduced by 61% to K858 million (2015: K 2,179million). The Group's share of losses of equity accounted investees was K2, 210 million (2015: Share of Profit K280 million).
• Loss after tax was K2, 912million (2015: Loss K987million).
• Total assets increased by 15% from K8, 504 million to K9, 797 million largely on account of translation differences on equity accounted investees.
• The Ndola Lime recapitalization project is undergoing hot commissioning. The K651 million shareholder loan that ZCCM-IH lent to Ndola Lime Company Limited (NLC) was converted into
Equity in order to strengthen the company's balance sheet.
• During the year, ZCCM-IH acquired an Investment Property (Trinity Park) at a cost of US$8 million. ZCCM-IH will occupy one third of the building while two thirds will continue to be rented out.
• During the period under review, the Company was repositioned when a subsidiary that was mainly set up to undertake exploration (Mawe Exploration and Technical Services Limited) activities was scheduled for dissolution. Its activities were internalized and incorporated into a new technical department. Furthermore, the position of the CEO was enriched to be part of the Board of Directors.
• During the year, the Ministry of Finance reduced its shareholding in ZCCM IH from 87.5% to 77.5% through a sell down process. Further the Ministry of Finance transferred part of its remaining shareholding of 60.28% to the Industrial Development Corporation (IDC) limiting its direct shareholding in ZCCM IH to only 17.25%.
• In April 2016, ZCCM-IH fully underwrote the Investrust Rights Offer at K40m and ended up with 48.6% shareholding in the bank. Subsequently, ZCCM-IH made an application for waiver of a mandatory offer to the SEC and the SEC approved the application on condition that ZCCM-IH sold down its shareholding to below 35% by 31 October 2017. 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
• Subsequent to the period under review, in August 2016, the first 150 MW was commissioned at Maamba Collieries Thermal Power Plant and the next 150 MW was commissioned in November 2016. Maamba Collieries Limited is currently supplying 270MW to ZESCO.
• Subsequent to year end, the ZCCM IH 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.
Outlook
The Copper Price has recently shown signs of recovery, and it would appear that beyond 2016 the price will continue to recover. ZCCM-IH's investee companies that operate mines have been undergoing restructuring in order to contain operating costs in the midst of the Global Copper Price crunch. This should yield positive results going forward, though recovery will be slow.
In order to ensure survival, ZCCM-IH continues to explore diversification. Introducing initiatives to achieve efficiencies at NLC, the completion of the Maamba Thermal Plant, investments in property and agriculture are activities expected to positively impact the Group in the medium to long term.
By order of the Board of Directors
Chabby Chabala
Company Secretary and Chief Corporate Services Officer
Issued in Lusaka, Zambia on 13 June, 2017
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First Issued on 13 June 2017
Zccm Inv.hds.b (ZCC)