Directors' Half-year Report- 30 September 2016

RNS Number : 6396V
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"]

 

 

DIRECTORS' HALF YEARLY INTERIM SUMMARY FOR THE PERIOD ENDED 30th SEPTEMBER 2016:  

 

 

Introduction

 

In compliance with the requirements of the "Securities Act, Cap 354 of the Laws of Zambia" and the Listing Rules of the Lusaka Securities Exchange, ZCCM Investments Holdings Plc announces the unaudited results for the six months' period ended 30th September 2016.

 

Financial Performance

 

The Group achieved a turnover of K65.5 million for the six-month period ended 30th September 2016 which was 49% below the turnover of K128.4 million achieved during the six months to 30th September 2015. The decrease in Group turnover was mainly as a result of a decrease in turnover for Ndola Lime Company by 46% from K116.5 million to K62.5 million for the period under review. No Dividends were earned for the period ended 30th September 2016 (September 2015: K11.9 million). 

 

The Group recorded an operating loss of K65 million (Sept 2015:K31million). The Group's share of profit in associate companies was K58.6 million (September 2015: Loss: K1 546 million). The performance of the associate companies improved on account of cost containment measures instituted in the midst of the low copper prices. The price of copper reduced to US$4 790 per ton as at 30th September 2016 compared to US$4,970 per ton as at 30th September 2015 representing a 4% decrease. Overall the Group recorded an after tax loss of K134.7 million (September 2015: Loss K601.4 million).

 

Operations and Strategic developments

On 6th June 2016 ZCCM-IH filed a Claim Form with the English High Court to recover outstanding sums in excess of US$100 million due to it from KCM, pursuant to the terms of the Settlement Agreement entered into 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. KCM was also ordered to reimburse ZCCM-IH 80% of the costs it had incurred in pursuing its claim. Further directions were given to determine whether KCM made payments to Vedanta Group Companies in breach of the prohibition on doing so under the Settlement Agreement. If and to the extent it is determined that such payments were made, ZCCM-IH will be entitled to recover additional sums from KCM.

 

In April 2016, ZCCM-IH fully underwrote the Investrust Rights Offer and ended up with 48.6% shareholding in the bank. Subsequently, ZCCM-IH made an application for waiver of a mandatory offer to the Securities and Exchange Commission (SEC) and the SEC approved the application on condition that ZCCM-IH sold down its shareholding to below 35% within 12 months. 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.

 

ZCCM-IH continued to provide financial support towards the completion of the Ndola Lime Recapitalisation Project. The Project is expected to increase the company's production volume at a reduced unit cost of production by using alternative cheaper fuel. Further, the Project is expected to be commissioned in the first quarter of 2017. 

 

Subsequent events to 30 September 2016

 

ZCCM-IH also 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.

 

The following Non- Executive Directors were appointed to the Board of  ZCCM-IH on the dates indicated:

1.    Mr Teddy D Mulonga (31 October 2016)

2.    Mr Fredson K Yamba - Vice Chairperson (15 December 2016)

3.    Mr Paul M Chanda (15 December 2016)

4.    Mr Mateyo C Kaluba (15 December 2016)

 

The said appointments replaced the directors who were retired in July 2016. Thus, the Company now has a quorate board.

 

In August 2016 and November 2016, Maamba Collieries Limited (MCL) commissioned the production of first and second 150 MW respectively, of the Thermal Power. 

 

With regard to Copperbelt Energy Corporation Plc (CEC), the company held an Extraordinary General Meeting on 9th December 2016, where the shareholders approved the demerger of CEC Africa Investments Limited (CEC Africa) from CEC Plc by way of a dividend in specie in the ratio of one CEC Africa share for each share held in CEC Plc.

 

 



 

CONSOLIDATED GROUP INCOME STATEMENT FOR THE SIX MONTHS ENDED 30TH SEPTEMBER 2016 (UNAUDITED)







K'000





30-Sep-16


30-Sep-15

Revenue




                65,470


             128,394

Cost of sales




              (50,547)


           (100,617)

Gross profit




                14,922


                27,777

Other income




                  4,803


                  5,332

Environmental expenses




                     (66)


                (2,014)

Administration expenses




              (84,734)


              (62,163)

Operating profit/(Loss)




              (65,076)


              (31,068)

Finance costs




           (101,567)


           (408,101)

Finance income




                28,036


          1,391,166

Net finance income




              (73,531)


             983,065








Share of profit/(loss) of equity accounted investees




                58,626


        (1,546,688)

Loss before tax




              (79,981)


           (594,691)

Income tax




              (54,737)


                (6,706)

Loss from continuing operations




           (134,717)


           (601,397)

Retained loss




           (134,717)


           (601,397)

EPS




                  (0.84)


                  (3.74)

 

 

 

 

 



 

CONSOLIDATED GROUP STATEMENT OF FINANCIAL POSITION FOR THE SIX MONTHS ENDED 30th SEPTEMBER 2016 (UNAUDITED)

 





K'000


30-Sep-16



30-Sep-15

Assets Employed





Non-Current Asset

          9,694,731



11,304,607

Current Assests

             781,642



1,624,205

Total Assets

        10,476,373



        12,928,812






Equity and Liabilities





Shareholders' Funds

          8,889,391



11,982,934

Non-Current Liabilities

             710,838



457,446

Current Liabilities

             876,144



488,433

Total Equity and Liabilities

10,476,373



12,928,813

 


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30TH SEPTEMBER 2016 (UNAUDITED)

 






 K'000








Share capital

Share premium

Total Reserves

Retained earnings

Total







 Balance at 1 April 2015

         1,608

   2,089,343

        2,221,476

   3,057,532

         7,369,959

 Total comprehensive income 






 Profit 

                -  

                -  

                     -  

 (2,303,414)

       (2,303,414)

 Currency translation - equity accounted investees

                -  

                -  

4,429,650

                -

         4,429,650

 Revaluation surplus on PPE, net of tax

                -  

                -  

             12,286

                -  

              12,286

 Amortisation of revaluation surplus

                -  

                -  

                (941)

            941

                      -  

 Actuarial loss on defined benefit, net of tax

                -  

                -  

                     -  

            639

                  639

 Balance at 31 March 2016

         1,608

   2,089,343

        6,662,471

      755,698

         9,509,120







 Balance at 1 April 2016

         1,608

   2,089,343

        6,662,471

      755,698

         9,509,120

 Total comprehensive income 






 Profit 

                -  

                -  

                     -  

    (134,717)

          (134,717)

 Currency translation - equity accounted investees

                -  

                -  

         (485,012)

                -  

          (485,012)

 Balance at 30 September 2016

         1,608

   2,089,343

        6,177,459

      620,981

         8,889,391

 

 

 

 

 


 

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30TH SEPTEMBER 2016 (UNAUDITED)




 K'000

Cash flows from operating activities

Sep-16


Sep-15

(Loss)/ Profit

    (134,717)


      (601,397)

Adjustments for:




Depreciation and Amortisation

      18,256


      10,437

Interest income

    (4,803)


   (80,001)

Interest expense

       3,862


       1,685

Exchange differences/interest on borrowings

     93,291


     25,243

Fair value change on investment property

             -


           (53)

Share of profit of equity - accounted investees, net of tax

  (58,626)


  1,546,688

Profit on disposal of property, plant and equipment

              -  


        (144)

Tax expense

54,737


6,706

Change in:

  (28,000)


    909,164

Inventories

    (1,804)


       2,250

Trade and other receivables

  (45,252)


  (691,214)

Trade and other payables and provisions

   143,850


     21,733

Provision for environmental rehabilitation

             -  


        (157)

Cash generated from operating activities

     68,794


    241,776

Interest paid

     (3,862)


     (1,685)

Tax paid

    (4,474)


   (44,057)

Retirement benefits paid

    (1,358)


     (4,632)

Net cash from operating activities

59,100


191,402

Cash flows from investing activities




Interest received

4,803


     80,001

Proceeds from disposal of property, plant and equipment

              -  


          144

Acquisition of PPE and  intangible assets

(142,782)


   (221,378)

Proceeds on maturity of fixed deposits

   321,966


 (579,089)

Acquisition of held to maturity investments

 (133,239)


   514,007

Acquisition of financial Assets at fair value through P & L

    (4,239)


               -  

Net cash used in investing activities

46,509


-206,315

Cash flows from financing activities




Repayment of borrowings

  (24,855)


     (4,651)

Net cash used in/ from financing activities

  (24,855)


     (4,651)

Net (decrease)/ increase in cash and cash equivalents

80,754


     (19,564)

Cash and cash equivalents at 1 April

35,582


43,782

Cash and cash equivalents at 30 September

116,336


24,218

 

 

 

 

 

By Order of the Board

Chabby Chabala

Company Secretary

Issued in Lusaka, Zambia on 23 January 2017


T    |    +260-211-232456

E    |    advisory@sbz.com.zm

W  w.sbz.com.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 23 January 2017

 


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