ZCCM Investments Holdings (“ZCCM-IH” or “the Company”) on Monday 6 February 2023 commenced distribution of ZMW85.2 million (USD4.43 million) or ZMW0.53 per share being a total final dividend payable to shareholders for the financial year ended 31 December 2020. This was approved by the company’s shareholders at the 18th Annual General Meeting held on 9th December 2022.
The dividend paid was as a result of a Group profit of ZMW2.1 billion (USD109 million), and a Company profit of ZMW568 million (USD29.5 million) recorded for financial year ended 31 December 2020. A Group profit of ZMW307 million (USD15.98 million) and a Company profit of ZMW153 million (USD7.96 million) were recorded the year prior, representing a 594% and 271% increase in profit respectively.
Profit Recorded at Group Level was on account of a 70% increase in the value of dividends received due to improvements in the performance of investee companies. Additionally, two companies paid dividend during the period, as opposed to the year prior where one dividend payment was received by the Company.
Due to favorable copper prices of USD6,200 per ton recorded in 2020, a 3% increase from the USD6,000 per ton recorded in 2019, investee company share of profit on equity increased by 254% during the period.
Total Group assets also increased with value going from ZMW15.2 billion (USD790 million) in 2019 to ZMW 23.7 billion (USD1.2 billion) by the conclusion of 2020. This 55.9% increase was on account of a 63% increase in investment of associates, and a 219% increase in Cash and Cash equivalents resulting from a receipt of ZMW208 million (USD10.8 million) in dividends in 2020.
Further, the Group recorded a 95% increase in retained earnings during the period under review. This increased from ZMW2.1 billion (USD109 million) in 2019 to ZMW4.2 billion (USD218 million) in 2020.
Profit Recorded at Company Level was attributed to a recorded income of K226 million (USD11.75 million) for the year, a growth of 32% when compared to ZMW171 million (USD8.89 million) recorded the year prior.
With most assets being denominated in USD, some gains achieved were a result of the significant depreciation of the Kwacha against the United States Dollar. The years under review saw an average increase of 40.9% in exchange rate gains, with the average rate increasing from ZMW13.2/USD in 2019 to ZMW18.6/USD in 2020.
Retained earnings at Company level also increased, with ZMW1.5 billion (USD78 million) recorded for 2020 from ZMW978 million (USD50.9 million) recorded the year prior, a 53% increase.
Payment of Dividends by ZCCM-IH to its Shareholders is governed by the Company’s Dividend Policy as amended on 29th March 2018. The ZCCM-IH Dividend Policy stipulates that a minimum of 35% of the unconsolidated Net Profit after Tax (“NPAT”) for any financial year in which a positive unconsolidated NPAT is recorded be paid to its shareholders as dividends.
The ZMW85.2 million (USD4.43 million) dividend paid constitutes 37.7% of NPAT and is the fifth consecutive year reported that the Company has declared a dividend for a return on investment to our shareholders.
To access the Company’s Strategic Plan, kindly click the following link: https://zccm-ih.financifi.com/download/2018-2023-strategic-plan/
Note, all USD conversions are as at the closing rate on 6 February 2023 when dividend payment commenced.