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31 Jan 2017 14:35
ZCCM INVESTMENTS HOLDINGS PLC
聽[Incorporated in the Republic of Zambia]
Company registration number: 771
Share Code: ZCCM-IH
ISIN: ZM0000000037
["ZCCM-IH" or "the Company"]
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聽UNAUDITED PROVISIONAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016
In compliance with the requirements of the Listing Rules of the Lusaka Securities Exchange, ZCCM-IH Plc announces its unaudited provisional annual financial statements for the year ended 31 March 2016.
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ABRIDGED PROVISIONAL GROUP STATEMENT OF COMPREHENSIVE INCOME YEAR ENDED 31 MARCH 2016 | ||||
Unaudited | Audited | |||
2016 | 2015 | |||
ZMW'000 | ZMW'000 | |||
Revenue |
聽246,433 | 241,989 | ||
Gross profit |
66,065 | 111,116 | ||
Operating profit/(loss) | (206,603) | 聽(2,179,453) | ||
Net finance income | 195,203 | 569,950 | ||
Share of profit/(loss) of equity accounted investees | (2,258,981) | 280,535 | ||
(Loss)/Profit before tax | 聽(2,270,381) | 聽(1,328,968) | ||
Income tax credit/(expense) | (33,033) | 341,851 | ||
Loss for the period | 聽(2,303,414) | (987,117) | ||
Items that will never be reclassified to profit or loss | ||||
Revaluation of PPE | 16,748 | 9,289 | ||
Deferred tax on revaluation | (4,462) | (3,717) | ||
Actuarial (loss)/gain on defined benefit pension plans | 983 | (101) | ||
Deferred tax on defined benefit actuarial loss | (344) | 35 | ||
12,925 | 5,506 | |||
Items that are or maybe reclassified to profit or loss | ||||
Foreign currency translation differences-equity-accounted investees | 4,429,650 | 597,689 | ||
Other comprehensive income for the year net of tax |
聽4,429,650 | 597,689 | ||
Total comprehensive income for the year | 聽 2,139,161 | (383,922) | ||
Earnings per share (K) | ||||
Basic and diluted earnings per share (K) | (14.32) | (6.14) |
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ABRIDGED PROVISIONAL GROUP STATEMENT OF FINANCIAL POSITION | Unaudited | Audited | ||
AS AT 31 MARCH | 2016 | 2015 | ||
ASSETS | ZMW'000 | ZMW'000 | ||
聽 Property, plant and equipment | 1,030,284 | 775,616 | ||
聽 Intangible assets | 673 | 1,030 | ||
聽 Investment property | 100,778 | 15,000 | ||
聽 Investments in associates | 8,057,084 | 5,886,415 | ||
聽 Financial assets at fair value through profit or loss | 238,247 | 290,229 | ||
聽 Inventories | 35,349 | 53,097 | ||
聽 Trade and other receivables | 449,661 | 278,836 | ||
聽 Deferred tax assets | 686,530 | 646,046 | ||
聽 Held-to-maturity investment securities | 321,966 | 514,007 | ||
聽 Cash and cash equivalents | 35,582 | 43,782 | ||
Total Assets | 聽10,956,154 | 8,504,058 | ||
EQUITY AND LIABILITIES 聽 | ||||
聽 Capital and Reserves | 9,509,120 | 7,369,959 | ||
聽 Borrowings | 334,003 | 267,453 | ||
聽 Deferred tax liabilities | 201,889 | 292,820 | ||
聽 Trade and other payables | 245,590 | 186,299 | ||
聽 Other Provisions | 139,200 | 98,538 | ||
聽 Retirement benefits | 44,794 | 50,330 | ||
聽 Provisions for environmental rehabilitation | 263,491 | 108,228 | ||
Current tax liabilities | 218,067 | 130,431 | ||
聽10,956,154 | 8,504,058 |
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ABRIDGED PROVISIONAL GROUP STATEMENT OF CASH FLOW | 聽 Unaudited | Audited | ||
2016 | 2015 | |||
ZMW'000 | ZMW'000 | |||
Net cash inflow/(outflow) from operating activities | (46,798) | 529,297 | ||
Net cash inflow/(outflow) from/(on) investing activities | 102,802 | (508,253) | ||
Net cash outflow on financing | (64,204) | (251,625) | ||
(Decrease)/increase in cash and cash equivalents | (8,200) | 聽(230,581) | ||
Cash and cash equivalents at the beginning of the year | 43,782 | 274,363 | ||
Cash and cash equivalents at the end of the year | 35,582 | 43,782 |
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PROVISIONAL STATEMENT OF CHANGES IN EQUITY | ||||||
FOR THE YEAR ENDED 31 MARCH 2016 | Share capital | Share premium | Revaluation reserve | Translation reserve | Retained earnings | Total |
聽Balance at 1 April 2014 | 1,608 | 2,089,343 |
8,367 | 1,610,063 | 4,295,351 | 8,004,732 |
聽Total comprehensive income | ||||||
聽Profit | 聽- | 聽- | 聽- | 聽- | (987,117) | (987,117) |
聽Other comprehensive income: |
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聽Revaluation surplus on PPE | - | - | 9,289 | - | - | 9,289 |
聽Deferred tax on revaluation reserve | - | - | (3,717) | - | - | (3,717) |
聽Currency translation - equity accounted investees | 聽- | - | 聽- | 597,689 | 聽- | 597,689 |
聽Deferred tax on revaluation reserve | 聽- | 聽- | (215) | 聽- | 215 | - |
聽Actuarial loss on defined benefit | 聽- | - | 聽- | 聽- | (101) | (101) |
聽Deferred tax on defined benefit actuarial loss | 聽- | 聽- | 聽- | 聽- | 35 | 35 |
聽Total comprehensive income | - | - | 5,357 | 597,689 | (986,968) | (383,922) |
聽Transaction with owners of the Company - Contributions | ||||||
聽Payment of dividend | - | 聽- | 聽- | 聽- | (250,851) | (250,851) |
聽Total transactions with owners of the Company | - | - | - | - | (250,851) | (250,851) |
聽Balance at 31 March 2015 | 1,608 | 2,089,343 |
聽13,724 | 2,207,752 | 3,057,532 | 7,369,959 |
聽Balance at 1 April 2015 | 1,608 | 2,089,343 | 13,724 | 2,207,752 | 3,057,532 | 7,369,959 |
聽Total comprehensive income | ||||||
聽Loss | 聽- | 聽- | - | - | (2,303,414) | (2,303,414) |
聽Other comprehensive income: | ||||||
聽Currency translation - equity accounted investees | 聽- | - | - | 4,429,650 | - | 4,429,650 |
聽Revaluation surplus on PPE | - | - | 16,748 | - | - | 16,748 |
聽Deferred tax on revaluation reserve | - | - | (4,462) | - | - | (4,462) |
聽Amortisation of revaluation surplus | 聽- | 聽- | (941) | - | 941 | - |
聽Actuarial loss on defined benefit | 聽- | 聽- | - | - | 983 | 983 |
聽Deferred tax on defined benefit actuarial loss | 聽- | 聽- | - | - | (344) | (344) |
聽Total comprehensive income | - | - | 11,345 | 4,429,650 | (2,301,834) | 2,139,161 |
聽 Balance at 31 March 2016 | 1,608 | 2,089,343 |
25,069 | 6,637,402 | 755,698 | 9,509,120 |
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COMMENTARY
Financial highlights
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路 Performance of the Group continued to be impacted by low Global Copper Prices and low production. The Price of Copper on the LME further fell from US$6,052/ton at 31 March 2015 to US$4,848/ton at 31 March 2016. As a result, most of the Investee Companies recorded significant operating losses during the period. Further, the Kwacha depreciated by 48% from K7.5755/US$ in March 2015 to K11.1800/US$ at 31 March 2016. This had a significant impact on the Group results.
路 Operating loss reduced by 91% to K207 million (2015: K 2,179million). The Group's share of losses of equity accounted investees was K2, 259 million (2015: Share of Profit K280 million).
路 Loss after tax was K2,303 million (2015: Loss K987million)
路 Total assets increased by 29% from K8, 504 million to K10, 956 million largely on account of translation differences on equity accounted investees.
路 The Ndola Lime recapitalization project underwent 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.
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Strategic and Operational
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路 During the year ZCCM-IH acquired an Investment Property (Trinity Park) at a cost of K85 million (US$8 million). ZCCM-IH will occupy one third of the building while two thirds will continue to be rented out.
路 In August 2015, Minister of Finance transferred 60.3% shares out of 87.5% previously held in ZCCM-IH to the Industrial Development Corporation Limited (IDC).
路 During the period under review, the Company was repositioned when its subsidiary that was mainly set up to undertake exploration activities (Mawe Exploration and Technical Services Limited) was scheduled for dissolution. Its activities were internalized and incorporated into a new technical department. Furthermore, the position of the CEO was enriched to be part of the Board of Directors.
路 During the year, the Company acted on behalf of the Government of the Republic of Zambia ("GRZ") through the Preferential Secondary Market Offer ("the Offer") to Zambian Citizens of 27,961,237 shares, representing a shareholding of 17.4%, held by the Minister of Finance. Only 0.01% shares were sold signifying challenges that the global copper mining industry faced, and particularly ZCCM-IH's significant portfolio concentration in the industry.
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Subsequent events
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路 Subsequent to the period under review, significant progress was made on the Maamba Thermal Plant project with the first 150 megawatts production commissioned in August 2016聽and the next 150 MW commissioned in November 2016. MCL is currently supplying 270MW to ZESCO. Going forward Nava Bharat will be responsible for the operation and maintenance of the power plant.
路 In June 2016, ZCCM-IH commenced legal proceedings in the London Courts to recover over K1 billion (US$ 100 million) owed by Konkola Copper Mine Plc relating to the Settlement Agreement (SA) signed 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.
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 have 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 Ndola Lime Company Limited, investment into property and agriculture are activities expected to positively impact the Group in the medium to long term.
By Order of the Board
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Chabby Chabala
Company Secretary
Issued in Lusaka, Zambia on 16 January 2017
T | +260-211-232456 聽 E | advisory@sbz.com.zm 聽 W | www.sbz.com.zm 聽 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 16 January 2017 | |
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