Half Yearly Report

RNS Number : 1382A

ZCCM Invs.Hldgs PLC

27 March 2012

 



ZCCM INVESTMENTS HOLDINGS Plc

And its subsidiary

DIRECTORS' INTERIM SUMMARY

For the six month period ended 30^th September 2011

In compliance with the requirements of the "Securities Act, Cap 354 of the Laws of Zambia" and the listing rules of the Lusaka Stock Exchange, ZCCM Investments Holdings Plc (ZCCM-IH) announces the unaudited results for the six month period ended 30^th  September 2011.

The Group achieved a turnover of K891, 764 million during the six month period ended 30^th September 2011 which was 212% above the turnover of K285, 896 million for the six months to 30^th September 2010. This was mainly as a result of a profit of K699, 137 million [proceeds of K802, 357 million (US$167, 507 million) less cost of K103, 220 million] from the sale of shares in Equinox Minerals Limited. However, the turnover for Ndola Lime Company (NLC) at K105, 254 million, declined 41% from that of the same period in 2010. This decrease was largely due to the shutdown of the rotary kiln on account of a breakdown of the Electrostatic Precipitator (ESP).  With only the vertical kiln being operational, there was reduced production which in turn resulted in reduced turnover and cost of sales compared to that for the period ended 30^th September 2010.

During the period under review, a total of K87, 346 million (US$18, 381, 000) was received in dividends as follows:

·    K35, 860 million (US$7, 600, 000) from Kansanshi Mines Plc

·    K23, 628 million (US$5, 000, 000) from Konkola Copper Mines

·    K19, 858 million (US$4, 161, 000)  from Chibuluma Mines as well as

·    K8, 000 million (US$1, 620, 000) from CEC during the period. 

In addition, interest earned from treasury placements during the period amounted to K3, 488 million, where as management fees of K1, 675 million were earned from the Government of the Republic of Zambia (GRZ) relating to the Copperbelt Environment Project implementation. 

The cost of turnover decreased to K106, 484 million for the period to 30^th September 2011 from K163, 246 million for the corresponding period to 30^th September 2010. This was largely due to only the vertical kiln (at NLC) being operational during the period under review.

The operating profit for the period under review of K785, 280 million was K662, 630 million (540%) higher than that for the same period in 2010. This was mainly as a result of the sale of shares in Equinox Minerals Limited for the period under review.  For largely the same reason, the retained profit for the period under review of K1, 060, 376 million was K655, 189 million (161%) higher than that for the same period in 2010.

The Company's share of profit from Associate Companies for the period to 30^th September 2011 of K371, 430 million showed a slight decrease when compared to K372, 760 million for the period to 30^th September 2010.

During the period under review, ZCCM-IH participated in underwriting the Investrust Bank Plc (Investrust) Rights Issue in September 2011 for a fee of 2 per cent.  The underwriting resulted in ZCCM-IH acquiring 10% of the ordinary shares of Investrust at a gross amount of K7, 904 million.

The funds from the sale of shares in Equinox Minerals Limited have since been invested in the following projects:

·    Maamba Collieries Limited as an equity contribution in order to maintain the equity shareholding of ZCCM-IH at 35%. Maamba Collieries Ltd is implementing an Integrated Coal Mining Project and 300MW Thermal Power Plant Project.

·    Equity contribution in Konkola North Copper (Konnoco) project which is a start up copper mining project.  ZCCM-IH exercised an option and obtained 20% shareholding in Konnoco, of which 5% is free-carry while the additional 15% will require that ZCCM-IH contributes cash to the development of the mine.  The Shareholders' Agreement, the financing agreements and services agreement relating to Konnoco were signed by ZCCM-IH on 15^th September 2011.

·    A shareholder loan has been disbursed to NLC in order to facilitate the recapitalization programme. The recapitalization project will help lower unit costs of production and strengthen production capacity.

ZCCM-IH also made a part payment of US$ 55 million towards the pre-privatisation loans owed to GRZ.

Events in the Euro Zone are likely to adversely impact global commodity demand and prices. With lessons from the Global Financial Crisis, a number of mining companies have kept a close watch on unit production costs in order to better manage base metal price fluctuations. ZCCM-IH is keenly observing events in the Euro Zone and the efforts being made to address them.

By Order of the Board

C Chabala

Company Secretary

17 March 2012

ZCCM INVESTMENTS HOLDINGS PLC
COMPREHENSIVE GROUP INCOME STATEMENT FOR THE SIX MONTHS ENDED 30TH SEPTEMBER 2011
			SIX MONTHS ENDED		SIX MONTHS ENDED
			30 SEPTEMBER 2011		30 SEPTEMBER 2010
			Consolidated		Consolidated
			K' million		K' million
Turnover			891,764		285,896
Cost of turnover			(106,484)		(163,246)
Operating profit/(loss)			785,280		122,650
Exchange (loss)/gain			(11,958)		(63,037)
Environmental expenses			(1,554)		(7,142)
Interest charge			(1,961)		(17,321)
Royalty on minerals			(2,854)		(2,173)
Other income			12,221		9,250
Associate Companies Share of Profit			371,430		372,760
Profit/(loss) before taxation			1,150,604		414,987
Income tax			(90,228)		(9,800)
Retained profit/(loss)			1,060,376		405,187

 

END

 

 

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