INTRODUCTION
In compliance with the requirements of the Securities Act No. 41 of 2016, ZCCM Investments Holdings Plc (“ZCCMIH Plc”) announces the provisional financial statements results of the Company and its subsidiary (Collectively referred to as the ‘‘the Group’’) for the year ended 31 March 2019.

1. FINANCIAL PERFORMANCE
The Group reported a profit for the year of ZMW462 million (2018: ZMW843 million), mainly due to the following:

  • increase in net finance income from a net finance cost of ZMW132.49 million recorded in 2018 to a net finance income of ZMW63.55 recorded in 2019; and
  • increase in share of profit from equity accounted investee companies from ZMW689 million recorded in 2018 to ZMW973 million recorded in 2019, mainly on account of improved performance of Kansanshi Mining Plc and Maamba Collieries Limited whose combined share of profit accounted for 84% of the recorded amount for the year.

Despite the Group reporting a profit for the year of ZMW462 million, there was a decline of 45% compared to last year mainly due to recorded losses from Ndola Lime Company Limited, and Investrust Bank Plc (Investrust) amounting ZMW246 million (2018: ZMW190 million) and ZMW79 million (2018: no comparison applicable as Investrust was not a subsidiary then), respectively.

The Company reported a loss for the year of ZMW168 million (2018: Profit ZMW433 million), mainly due to reduction in other income, impairment losses and fair value loss amounting to ZMW360 million, ZMW 270 million and ZMW 336 million respectively.

Group total assets increased by 30% to ZMW13,388 million in 2019 from ZMW10,332 million in 2018. This is attributed to increase in property, plant and equipment, investment property, investments in associate, inventories, trade and other receivables as well as held-to-maturity investment. The largest contributor to total asset increase was the enhanced values of investments in associates from ZMW 7 355 million in 2018 to ZMW 10,256 million as a result of improved performance of Kansanshi Mining Plc, Maamba Collieries Limited and exchange gains arising from translation of these US Dollar denominated investments. The Zambian Kwacha depreciated from ZMW9.49 per US Dollar as at 31 March 2018 to ZMW12.19 per US Dollar as at 31 March 2019.

2. SIGNIFICANT DEVELOPMENTS
During the year the Group has invested in several investment projects in line with the Group’s 2018-2023 Strategic Plan in a quest to maximize shareholder value.
The significant developments are detailed below:

Investrust Bank Plc
Subsequent to the reporting date, Investrust Bank Plc and ZCCM Investments Holdings Plc entered into a Non-Cumulative, Redeemable Non-Voting Preference Share Subscription Agreement. The agreement would result in ZCCM-IH recapitalizing the Bank with ZMW 286 million. The recapitalization will improve the operations of the bank and strengthen its competitive position.

Konkola Copper Mines Plc
On 21 May 2019, ZCCM-IH filed a petition in the High Court of Zambia for the winding up of KCM. ZCCM-IH has filed the said petition pursuant to Section 56(1)(c) of the Corporate Insolvency Act No. 9 of 2017. By Order of the Court, Mr. Milingo Lungu Simwanza & Company has been appointed as provisional liquidator.

Kariba Minerals Limited (KML)
On 9th November 2018, ZCCM-IH and Gemfields signed a Share Purchase Agreement for ZCCM-IH to purchase the additional 50% stake in KML. This acquisition has resulted in ZCCM-IH owning 100% of KML.

Kabundi Resources Limited
In March, 2019, the ZCCM-IH Board resolved to incorporate a Special Purpose Vehicle, Kabundi Resources Limited (“KRL”) a wholly owned subsidiary. KRL is located in Chief Muchinda’s area in Serenje District, Central Province. KRL is a mining operating company whose main activities include mining, processing and marketing of manganese and other non-ferrous metals.

Others
During the period under review, ZCCM-IH acquired a 49% interest in Rembrandt Properties Ltd (developing a budget hotel and retail outlet) and a further acquisition of a residential complex, all in Lusaka.

3. OUTLOOK
Looking into the future, the Group will continue to execute the 2018-2023 strategy to reduce dependence on dividend income streams which historically have been unstable and inconsistent. The significant developments highlighted above are expected to have a positive impact on the group’s performance in the medium to long term.

By Order of the Board
Chabby Chabala
Company Secretary

Issued in Lusaka, Zambia on Thursday, 5th September 2019

Lusaka Securities Exchange Sponsoring Broker
T | +260-211-232456
E | advisory@sbz.com.zm
W | www.sbz.com.zm
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 Thursday, 5th September 2019


Related download

ZCCM-IH Provisional Abridged Financial Statements – FYE 31 March 2019.pdf