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 2017. Below are extracts from the results.
- The Group’s performance improved during the year owing to increase in copper production for most major mining companies. This was due to stability in energy supply and an improvement in copper prices on the world market. The copper price increased by 23% from US$4,848/ton in March 2016 to US$5,956/ton in March 2017.
- The Group recorded an operating profit of K1, 703 million (2016 Loss: K858 million), mainly attributable to the recovery of K1, 923 million impairment from investee companies whose performance improved during the year.
- The Group’s share of losses of equity accounted investees significantly reduced by 91% from K2, 210 million in 2016 to K194 million in 2017.
- Profit after tax was K1,764 million (2016: Loss K2,912 million).
- Total assets marginally increased by 8% from K9, 797 million to K10, 575 million largely on account of the recovery of the copper price participation receivable that was impaired in the preceding year.
- The Ndola Lime Company Limited recapitalization project is still undergoing a hot commissioning, though the process has been met with a lot of challenges.
- In February 2016, ZCCM-IH undertook to subscribe for all shares not subscribed for by other Investrust Bank Plc (Investrust) shareholders in the Investrust Rights Offer. This resulted in an increase in ZCCM-IH’s shareholding in Investrust from 10.6% to 48.6%. As a result, ZCCM-IH was required to proceed with a Mandatory Offer to all the other shareholders in Investrust in accordance with Rule 56 of the Third Schedule of the Securities (Takeovers and Mergers) Rules, Statutory Instrument No 170 of 1993, issued pursuant to the Securities Act, Chapter 354 of the Laws of Zambia.
The process is expected to be concluded by end of March 2018.
- Subsequent to the period under review, ZCCM-IH’s subsidiary Mawe Exploration and Technical Services Limited which was scheduled for dissolution in prior year was formally in dissolved in April 2017.
Copper prices are expected to increase steadily premised on increased demand from high copper consumer countries. ZCCM-IH’s performance is expected to improve as a result of the improvement in copper prices which drive the performance of the mining portfolio. Furthermore, as a result of good rains experienced during the 2016/17 season, the generation capacity of hydroelectricity is expected to improve thereby stabilising energy supply.
The recovery in copper prices as well as stability in energy supply will contribute to the growth in copper production which in turn will lead to growth in copper exports. The expected growth is further confirmed by additional investments of over $ 2 billion over the next several years announced by major multinational investors in the mining sector of Zambia.
In response to the positive outlook, ZCCM-IH will implement a new Strategic Plan hinged on expansion of its investment footprint in various sectors of the economy including mining with a focus on industrialisation, energy, agriculture, manufacturing, real estate and financial services.
By Order of the Board
Issued in Lusaka, Zambia on 2 January 2018
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First Issued on 2 January 2018