Abridged Audited Financial Statements31 March 2016

RNS Number : 9824H

ZCCM Invs.Hldgs PLC

13 June 2017

 

ZCCM INVESTMENTS HOLDINGS PLC

[Incorporated in the Republic of Zambia]

Company registration number: 771

Share Code: ZCCM-IH

ISIN: ZM0000000037

["ZCCM-IH" or "the Company"]

ABRIDGED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31

MARCH 2016

In accordance with the requirements of the Securities Act No. 41 of 2016, ZCCM-IH Plc announces its audited annual financial statements for the year ended 31 March 2016.

ABRIDGED GROUP STATEMENT OF COMPREHENSIVE INCOME YEAR ENDED 31 MARCH 2016

	Audited		Audited
	2016	2015
	ZMW'000		ZMW'000
Revenue	198,661		241,989
Gross profit	18,293		111,116
Operating profit/(loss)	(857,921)	(2,179,453)
Net finance income	203,247	569,950
Share of (loss)/profit of equity accounted investees	(2,210,199)		280,535
Loss before tax	(2,864,873)	(1,328,968)
Income tax credit/(expense)	(47,356)		341,851
Loss for the period	(2,912,229)	(987,117)
Items that will never be reclassified to profit or loss
Revaluation of PPE	16,748	9,289
Deferred tax on revaluation	(4,733)	(3,717)
Actuarial (loss)/gain on defined benefit pension plans	983	(101)

Deferred tax on defined benefit actuarial loss		(344)	35
Equity-accounted investees- share of OCI		(204)			-
		12,450	5,506
Items that are or maybe reclassified to profit or loss
Foreign currency translation differences-equity-accounted investees		4,122,445	597,689
Equity-accounted investees- share of OCI		(266,397)	-
Other comprehensive income for the year net of tax		3,856,048			597,689
Total comprehensive income for the year		956,269			(383,922)
Earnings per share (K)		(18.11)	(6.14)
Basic and diluted earnings per share (K)		(18.11)	(6.14)

ABRIDGED GROUP STATEMENT OF FINANCIAL POSTION	Audited		Audited
AS AT 31 MARCH	2016	2015
ASSETS	ZMW'000		ZMW'000
Property, plant and equipment
	1,030,284	775,616
Intangible assets
	673	1,030
Investment property
	100,778	15,000
Investments in associates
	6,852,955	5,886,415
Financial assets at fair value through profit or loss
	238,247	290,229
Inventories
	35,349	53,097
Trade and other receivables
	449,660	278,836
Deferred tax assets
	698,304	646,046
Held-to-maturity investment securities
	355,172	514,007
Cash and cash equivalents
	35,850		43,782
Total Assets	9,797,272	8,504,058

EQUITY AND LIABILITIES
Capital and Reserves
		8,326,228	7,369,959
Borrowings
		292,644	267,453
Deferred tax liabilities
		211,786	292,820
Trade and other payables
		286,271	186,299
other Provisions
		139,197	98,538
Retirement benefits
		44,794	50,330
Provisions for environmental rehabilitation
		263,491	108,228
Current tax liabilities		232,542	130,431
Bank overdraft		319			-
		9,797,272	8,504,058

ABRIDGED GROUP STATEMENT OF CASH FLOW		Audited			Audited
		2016	2015
		ZMW'000			ZMW'000
Net cash flow from operating activities		131,638	529,297
Net cash used in investing activities		(75,329)	(508,253)
Net cash outflow on financing		(64,204)			(251,625)
(Decrease)/increase in cash and cash equivalents		(7,895)			(230,581)
Effect of movement in exchange rates on cash held		(356)	-
Cash and cash equivalents at the beginning of the year		43,782			274,363
Cash and cash equivalents at the end of the year		35,531	43,782

STATEMENT OF CHANGES IN

EQUITY

FOR THE YEAR ENDED 31		Share		Share	Revaluation	Translation	Retained	Total
		capital		premium	reserve	reserve	earnings
MARCH 2016
Balance at 1 April 2014					8,367
		1,608		2,089,343		1,610,063	4,295,351	8,004,732
Total comprehensive income
Profit
			-	-	-	-	(987,117)	(987,117)
Other comprehensive income:								-
Revaluation surplus on PPE					9,289
								9,289
Deferred tax on revaluation reserve					(3,717)
								(3,717)
Currency translation - equity accounted			-		-		-
investees				-		597,689		597,689
Amortisation of revaluation surplus			-	-	-	-	-	-
Deferred tax on revaluation reserve			-		(215)	-		-
				-			215
Actuarial loss on defined benefit			-		-	-
				-			(101)	(101)
Deferred   tax   on   defined   benefit			-		-	-
actuarial loss				-			35	35
Total comprehensive income			-	-	5,357	597,689	(986,968)	(383,922)
Transaction  with  owners  of  the
Company - Contributions
Payment of dividend			-	-	-	-
							(250,851)	(250,851)
Total transactions with owners of the			-		-
Company				-		-	(250,851)	(250,851)
Balance at 31 March 2015					13,724
		1,608		2,089,343		2,207,752	3,057,532	7,369,959
Balance at 1 April 2016		1,608		2,089,343
					13,724	2,207,752	3,057,532	7,369,959
Total comprehensive income
Loss for the year
			-	-			(2,912,229)	(2,912,229)
Other comprehensive income:
Currency translation - equity accounted			-
investees				-		4,122,445		4,122,445
Revaluation surplus on PPE					16,748
								16,748
Deferred tax on revaluation reserve					(4,733)
								(4,733)
Amortisation of revaluation surplus			-		(941)
				-			941	0
Actuarial loss on defined benefit			-
				-			983	983
Share of associates'OCI					235,217
						(501,818)		(266,601)
Deferred   tax   on   defined   benefit			-
actuarial loss				-			(344)	(344)
Total comprehensive income			-	-	246,291	3,620,627	(2,910,649)	956,269
Balance at 31 March 2016
		1,608		2,089,343	260,015	5,828,379	146,883	8,326,228

Commentary

•     Performance of the Group continued to be impacted by low global copper prices coupled with low production. The price of copper on the LME further fell from US$6,052/ton at 31 March 2015 to US$4,848/ton at 31 March 2016. As a result, most of the investee companies recorded significant operating losses during the period. Further, the Kwacha depreciated by 48% from K7.5755/US$ as at 31 March 2015 to K11.1800/US$ as at 31 March 2016. This had a significant impact on the Group results.

•     Operating loss reduced by 61% to K858 million (2015: K 2,179million). The Group's share of losses of equity accounted investees was K2, 210 million (2015: Share of Profit K280 million).

•     Loss after tax was K2, 912million (2015: Loss K987million).

•     Total assets increased by 15% from K8, 504 million to K9, 797 million largely on account of translation differences on equity accounted investees.

•     The Ndola Lime recapitalization project is undergoing hot commissioning. The K651 million shareholder loan that ZCCM-IH lent to Ndola Lime Company Limited (NLC) was converted into

Equity in order to strengthen the company's balance sheet.

•     During the year, ZCCM-IH acquired an Investment Property (Trinity Park) at a cost of US$8 million. ZCCM-IH will occupy one third of the building while two thirds will continue to be rented out.

•     During the period under review, the Company was repositioned when a subsidiary that was mainly set up to undertake exploration (Mawe Exploration and Technical Services Limited) activities was scheduled for dissolution. Its activities were internalized and incorporated into a new technical department. Furthermore, the position of the CEO was enriched to be part of the Board of Directors.

•     During the year, the Ministry of Finance reduced its shareholding in ZCCM IH from 87.5% to 77.5% through a sell down process. Further the Ministry of Finance transferred part of its remaining shareholding of 60.28% to the Industrial Development Corporation (IDC) limiting its direct shareholding in ZCCM IH to only 17.25%.

•     In April 2016, ZCCM-IH fully underwrote the Investrust Rights Offer at K40m and ended up with 48.6% shareholding in the bank. Subsequently, ZCCM-IH made an application for waiver of a mandatory offer to the SEC and the SEC approved the application on condition that ZCCM-IH sold down its shareholding to below 35% by 31 October 2017. The 35% shareholding is the trigger for a mandatory offer. ZCCM-IH has since sold 3.2% of its shares in the bank and is currently at 45.4% shareholding

•     Subsequent to the period under review, in August 2016, the first 150 MW was commissioned at Maamba Collieries Thermal Power Plant and the next 150 MW was commissioned in November 2016. Maamba Collieries Limited is currently supplying 270MW to ZESCO.

•     Subsequent to year end, the ZCCM IH filed a Notice of Arbitration on 26th October 2016 in London against Kansanshi Holdings Limited and Kansanshi Mining Plc. Further, on 28th October 2016 ZCCM-IH commenced Legal Proceedings in Lusaka against First Quantum Limited, FQM Finance Limited, Philip K.R. Pascal, Arthur Mathias Pascal, Clive Newall, Martin R. Rowley and Kansanshi Mining PLC for various Claims arising from transactions between Kansanshi Mining Plc and FQM Finance Limited.

Outlook

The Copper Price has recently shown signs of recovery, and it would appear that beyond 2016 the price will continue to recover. ZCCM-IH's investee companies that operate mines have been undergoing restructuring in order to contain operating costs in the midst of the Global Copper Price crunch. This should yield positive results going forward, though recovery will be slow.

In order to ensure survival, ZCCM-IH continues to explore diversification. Introducing initiatives to achieve efficiencies at NLC, the completion of the Maamba Thermal Plant, investments in property and agriculture are activities expected to positively impact the Group in the medium to long term.

By order of the Board of Directors

Chabby Chabala

Company Secretary and Chief Corporate Services Officer

Issued in Lusaka, Zambia on 13 June, 2017

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First Issued on 13 June 2017

 

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