The Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH) has posted impressive results for a period of nine months beginning September 2019 to June 2020, recording profits of over 240% from K128 million (September 2019) to K438.9 million (June 2020).
According to highlights of the directors’ unaudited half year financial results for ZCCM-IH and its subsidiaries for the period ended June 30, 2020, the Group’s profits were a result of an increase in net finance income from ZMW138.7 million recorded in September 2019 to ZMW327.3 million recorded in June 2020.
The increase in finance income is due to exchange gains recorded on foreign denominated assets arising from the depreciation of the Zambian Kwacha from an average of ZMW13.9 per US Dollar as at 30 September 2019 to ZMW17.2 per US Dollar as at 30 June 2020.
“Increase in the Group’s share of profit in associate companies from ZMW154.8 million recorded in September 2019 to ZMW 354.7 million in June 2020. This is mainly due to the increase in the profitability of some investee companies in the mining sector such as Maamba Collieries Limited and Kansanshi Mining Plc. Group total assets increased by 40% to ZMW 20,262 million in June 2020 from ZMW14, 519 million in September 2019. This is mainly attributed to increase in values of investments in associates as a result of improved performance of Kansanshi Mining Plc, Maamba Collieries Limited and exchange gains arising from translation of US Dollar denominated investments,” ZCCM-IH stated.
The group further stated that exploration works are currently underway at its gold venture.
“During the period, Zambia Gold Company Limited (“ZGCL”), 51% owned by ZCCM-IH and 49% owned by Ministry of Finance, was granted Small-Scale Mining in the Mwinilunga District. Exploration and mining works are underway. This is in line with its countrywide mandate to manage the programmes and the activities of the gold sector throughout the entire value chain. ZGCL also continued gold trading during the period with gold purchases extended to the Rufunsa District. Further, ZGCL has been working with artisanal miners in the forming and operationalization of gold artisanal mining cooperatives in various districts,” it stated.
On Ndola Lime Company Ltd restructuring, ZCCM-IH says it was recommended that reconstruction of creditors be done and that a new company has since been formed, named Limestone Resources Limited.
“The restructuring was done through a hybrid of Out of Court Settlement and formal insolvency procedures.
In this regard, it was decided that a Scheme of Arrangement (“the Scheme”) and reconstruction of creditors be undertaken. The objective of the Scheme was to create a new company that was free from liabilities and able to operate more efficiently. Therefore, the new company was incorporated and is known as Limestone Resources Limited (“LRL”).
Furthermore, the restructuring involved the transfer of the business and assets of NLC to LRL and the consequent issue of equity shares by LRL to the shareholders of NLC,” ZCCM-IH stated.
On Maamba Collieries Limited, it revealed that $10 million liquidity was provided to Maamba Collieries Limited (MCL) on condition that the amount was payable within 60 days from disbursement, following the receipt of power sale proceeds from ZESCO.
However, despite the agreed conditions, MCL has still not repaid the advanced sum and as a result of this, ZCCM Investments Holdings Plc instituted legal proceedings against MCL (during the period under review) in the Lusaka High Court seeking the payment of the US$10 million plus damages and interest.
On Industrial Development Corporation (IDC), ZCCM-IH stated that its board considered and approved the proposed IDC/ZCCM-IH Group reorganization exercise whereby IDC will transfer its 25% equity stake in Kagem Mining Limited, at fair market value, to ZCCM IH;
ZCCM-IH will transfer its 71.4% equity stake in Investrust Bank PLC, at fair market value to IDC; and that ZCCM-IH will transfer its 100% stake in Mushe Milling Limited to IDC at fair market value.
“These 3 corporate actions listed above will be undertaken simultaneously as a corporate group reorganization exercise involving IDC and ZCCM-IH and constitute the proposed Group Portfolio Rationalization and Reorganization,” it stated.
On CEC Africa Investments Limited, ZCCM-IH reports that it successfully disposed of its 20% shareholding in the energy company.
Proceeds from the disposal shall be applied on other opportunities in the mining and other mining related sectors of the domestic economy, ZCCM-IH stated.