Annual Financial Report

RNS Number : 6292V

ZCCM Invs.Hldgs PLC

31 January 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"]

 UNAUDITED PROVISIONAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016

In compliance with the requirements of the Listing Rules of the Lusaka Securities Exchange, ZCCM-IH Plc announces its unaudited provisional annual financial statements for the year ended 31 March 2016.

ABRIDGED PROVISIONAL GROUP STATEMENT OF COMPREHENSIVE INCOME YEAR ENDED 31 MARCH 2016
		Unaudited		Audited
		2016		2015
		ZMW'000		ZMW'000
Revenue		246,433		241,989
Gross profit		66,065		111,116
Operating profit/(loss)		(206,603)		(2,179,453)
Net finance income		195,203		569,950
Share of profit/(loss) of equity accounted investees		(2,258,981)		280,535
(Loss)/Profit before tax		(2,270,381)		(1,328,968)
Income tax credit/(expense)		(33,033)		341,851
Loss for the period		(2,303,414)		(987,117)
Items that will never be reclassified to profit or loss
Revaluation of PPE		16,748		9,289
Deferred tax on revaluation		(4,462)		(3,717)
Actuarial (loss)/gain on defined benefit pension plans		983		(101)
Deferred tax on defined benefit actuarial loss		(344)		35
		12,925		5,506
Items that are or maybe reclassified to profit or loss
Foreign currency translation differences-equity-accounted investees		4,429,650		597,689
Other comprehensive income for the year net of tax		4,429,650		597,689
Total comprehensive income for the year		2,139,161		(383,922)
Earnings per share (K)
Basic and diluted earnings per share (K)		(14.32)		(6.14)

ABRIDGED PROVISIONAL GROUP STATEMENT OF FINANCIAL POSITION		Unaudited		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		8,057,084		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		449,661		278,836
Deferred tax assets		686,530		646,046
Held-to-maturity investment securities		321,966		514,007
Cash and cash equivalents		35,582		43,782
Total Assets		10,956,154		8,504,058
EQUITY AND LIABILITIES
Capital and Reserves		9,509,120		7,369,959
Borrowings		334,003		267,453
Deferred tax liabilities		201,889		292,820
Trade and other payables		245,590		186,299
Other Provisions		139,200		98,538
Retirement benefits		44,794		50,330
Provisions for environmental rehabilitation		263,491		108,228
Current tax liabilities		218,067		130,431
		10,956,154		8,504,058

ABRIDGED PROVISIONAL GROUP STATEMENT OF CASH FLOW		Unaudited		Audited
		2016		2015
		ZMW'000		ZMW'000
Net cash inflow/(outflow) from operating activities		(46,798)		529,297
Net cash inflow/(outflow) from/(on) investing activities		102,802		(508,253)
Net cash outflow on financing		(64,204)		(251,625)
(Decrease)/increase in cash and cash equivalents		(8,200)		(230,581)
Cash and cash equivalents at the beginning of the year		43,782		274,363
Cash and cash equivalents at the end of the year		35,582		43,782

PROVISIONAL STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2016	Share capital	Share premium	Revaluation reserve	Translation reserve	Retained earnings	Total
Balance at 1 April 2014	1,608	2,089,343	8,367	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
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	1,608	2,089,343	13,724	2,207,752	3,057,532	7,369,959
Balance at 1 April 2015	1,608	2,089,343	13,724	2,207,752	3,057,532	7,369,959
Total comprehensive income
Loss	-	-	-	-	(2,303,414)	(2,303,414)
Other comprehensive income:
Currency translation - equity accounted investees	-	-	-	4,429,650	-	4,429,650
Revaluation surplus on PPE	-	-	16,748	-	-	16,748
Deferred tax on revaluation reserve	-	-	(4,462)	-	-	(4,462)
Amortisation of revaluation surplus	-	-	(941)	-	941	-
Actuarial loss on defined benefit	-	-	-	-	983	983
Deferred tax on defined benefit actuarial loss	-	-	-	-	(344)	(344)
Total comprehensive income	-	-	11,345	4,429,650	(2,301,834)	2,139,161
Balance at 31 March 2016	1,608	2,089,343	25,069	6,637,402	755,698	9,509,120

COMMENTARY

Financial highlights

·     Performance of the Group continued to be impacted by low Global Copper Prices and low production. The Price of Copper on the LME further fell from US$6,052/ton at 31 March 2015 to US$4,848/ton at 31 March 2016. As a result, most of the Investee Companies recorded significant operating losses during the period. Further, the Kwacha depreciated by 48% from K7.5755/US$ in March 2015 to K11.1800/US$ at 31 March 2016. This had a significant impact on the Group results.

·     Operating loss reduced by 91% to K207 million (2015: K 2,179million). The Group's share of losses of equity accounted investees was K2, 259 million (2015: Share of Profit K280 million).

·     Loss after tax was K2,303 million (2015: Loss K987million)

·     Total assets increased by 29% from K8, 504 million to K10, 956 million largely on account of translation differences on equity accounted investees.

·     The Ndola Lime recapitalization project underwent 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.

Strategic and Operational

·     During the year ZCCM-IH acquired an Investment Property (Trinity Park) at a cost of K85 million (US$8 million). ZCCM-IH will occupy one third of the building while two thirds will continue to be rented out.

·     In August 2015, Minister of Finance transferred 60.3% shares out of 87.5% previously held in ZCCM-IH to the Industrial Development Corporation Limited (IDC).

·     During the period under review, the Company was repositioned when its subsidiary that was mainly set up to undertake exploration activities (Mawe Exploration and Technical Services Limited) 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 Company acted on behalf of the Government of the Republic of Zambia ("GRZ") through the Preferential Secondary Market Offer ("the Offer") to Zambian Citizens of 27,961,237 shares, representing a shareholding of 17.4%, held by the Minister of Finance. Only 0.01% shares were sold signifying challenges that the global copper mining industry faced, and particularly ZCCM-IH's significant portfolio concentration in the industry.  

Subsequent events

·     Subsequent to the period under review, significant progress was made on the Maamba Thermal Plant project with the first 150 megawatts production commissioned in August 2016 and the next 150 MW    commissioned in November 2016. MCL is currently supplying 270MW to ZESCO. Going forward Nava Bharat will be responsible for the operation and maintenance of the power plant.

·     In June 2016, ZCCM-IH commenced legal proceedings in the London Courts to recover over K1 billion (US$ 100 million) owed by Konkola Copper Mine Plc relating to the Settlement Agreement (SA) signed in 2013. On 16 December 2016, ZCCM-IH was successful in its application for default judgment. KCM was ordered to pay all sums owed to ZCCM-IH pursuant to the Settlement Agreement (plus associated contractual interest) within thirty (30) days. The total amount to be paid by KCM amounted to approximately US$103 million.  

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 have 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 Ndola Lime Company Limited,   investment into property and agriculture are activities expected to positively impact the Group in the medium to long term.

By Order of the Board

Chabby Chabala

Company Secretary

Issued in Lusaka, Zambia on 16 January 2017

	T    |    [phone] E        [e-mail] W   m.zm">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 16 January 2017

 

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