ZCCM IH Chief Executive Officer, Mabvuto Chipata concluded his dividend cheque presentation week at the headquarters of the Industrial Development Corporation (IDC) in Lusaka, Zambia by presenting the largest cheque by value of approximately K27.2 million to Chief Executive Officer Mateyo Kaluba, on Thursday 13th February 2020, after two others were presented to shareholders NAPSA and Ministry of Finance earlier in the week.
This was the third consecutive dividend payment presented to IDC and fourth for both NAPSA and the Ministry of Finance in the last 4 years. But while many focused on the size of the dividend, Financial Insight noted that CEO Chipata was gradually decoding the ZCCM IH strategy at each event systematically.
At the first presentation at the Ministry of Finance, following the reminder that the ZCCM IH group declared a profit-driven largely by an increase of 155% in revenue, the CEO announced his Group’s increasing stakes in Kariba Minerals and Copperbelt Energy Corporation in addition to new investments in companies such as Kabundi Resources that now sees them further their interests in manganese mining.
With the apparent risks in focusing on a singular global commodity, the CEO’s statement to fiscal on risk was a clear indicator of how ZCCM IH sought to position itself going forward. “We want to reduce our risk exposure on depending on copper, as well as drive portfolio growth in order to sustain the delivery of a fair return on investment for all our shareholders”, said the CEO when addressing the Minister of Finance, Dr. Bwalya Ngandu in his maiden attendance as the Minister in what is now becoming an annual event.
When the second cheque was delivered to the largest pension fund investor in the group, the CEO reminded the fund’s custodian that “they remain resolute in seeing that ZCCM-IH continues to be profitable, driven by the strategies they have devised in their 2018 to 2023 strategic plan”. These are words of comfort to the type of investor the CEO was speaking to who is critical about the time value of money as his legion of analysts apply their knowledge of investment hypothesis and return on investment for pensioners.
But comfort alone was not enough for the CEO. He also seeks sustainability for the pension funds invested in his group. “Our strategic plan is underpinned by a transformative investment agenda aimed at driving sustainable growth in the company for the benefit of all our stakeholders”. Transformative being the operative word as the market has now begun to see a ZCCM IH that is stepping outside its comfort zone and venturing into a diverse portfolio that also sees it investment in property.
With sustainability in mind, the group is ensuring that it follows all the laid down regulatory procedures in acquiring and implementing of brownfield projects. In reference to widening the group’s footprint in the mining sector by developing new product lines such as Manganese in Central Province, and Gold processing in Rufunsa, Mumbwa, and Mwinilunga, the CEO indicated that “all these projects are just waiting finalisation of statutory approvals, which we envisage should be concluded anytime soon”. The statutory approvals related to the Environmental Project Brief (EPB) and Environmental Impact Assessment (EIA) for the Mwinilunga Project from ZEMA and the Resettlement Action Plan (RAP) for the Manganese project in Rufunsa, according to sources close to the matter.
At the final presentation with IDC, from one investment expert to another, the CEO’s speech re-echoed the encouragement that IDC’s recognition, during last year’s IDC Group Annual event, of being voted and awarded the Enterprise with Highest Dividend Declared in the IDC Group for 2018 and 2019 financial years and Best Performer by Targets, having maintained profitability of the company operations in the year had a fundamental impact on the ZCCM IH team. Visiting the ZCCM IH Stand at the recently held Mining Indaba in Cape Town, South Africa from the 3rd to the 6th of February, one walked away with sense of the Group positioning itself as a global player when speaking to the Chief Financial Officer, Chilandu Josephine Sakala who indicated to the Founder of Financial Insight that “the Group was committed to its strategy”.
The CEO also reminded his principal of one of the strategic pillars of “increasing shareholder value through consistent dividend pay-outs and portfolio optimization” as being the foundation that underpins their investment strategy. This is why ZCCM IH has taken a stance towards investment that includes “holding significant controlling stakes in new investments and proactively participating in the management of new assets”.
With the presentation week done and dusted, the ZCCM IH team returns to its strategy desk to continue with the implementation of its 5-year strategic plan.
Source: Financial Insight Zambia