Earnings Release • Dec 16, 2019
Earnings Release
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RNS Number : 0151X
ZCCM Invs.Hldgs PLC
16 December 2019
SENS ANNOUNCEMENT
(the "Notice" or "Announcement")
ISSUER
ZCCM INVESTMENTS HOLDINGS PLC ("ZCCM-IH")
[Incorporated in the Republic of Zambia]
Company registration number: 119540000771
Share Code: ZCCM-IH
ISIN: ZM0000000037
Authorised by: Chabby Chabala - Company Secretary
SPONSOR
Stockbrokers Zambia Limited
[Founder Member of the Lusaka Securities Exchange]
[Regulated and licensed by the Securities and Exchange Commission of Zambia]
Contact Number: +260-211-232456
Website: www.sbz.com.zm
APPROVAL
The captioned Notice or Announcement has been approved by:
i. the Lusaka Securities Exchange ("LuSE")
ii. the Securities and Exchange Commission ("SEC")
iii. Stockbrokers Zambia Limited ("SBZ")
RISK WARNING
The Notice or Announcement contained herein contains information that may be of a price sensitive nature.
Investors are advised to seek the advice of their investment advisor, stockbroker, or any professional duly licensed by the Securities and Exchange Commission of Zambia to provide securities advice.
ISSUED: 16 December 2019
ZCCM INVESTMENTS HOLDINGS PLC
(Incorporated in the Republic of Zambia)
ABRIDGED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019
INTRODUCTION
In compliance with the requirements of the Securities Act No. 41 of 2016, ZCCM Investments Holdings Plc ("ZCCM-IH 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.
STRUCTURE OF THE ZCCM-IH GROUP
The ZCCM-IH Group consist of the following seven (7) subsidiary companies:
| Name | Shareholding |
| ZCCM-IH | Parent Company |
| Ndola Lime Company Limited | 100% |
| Kariba Minerals Limited | 100% |
| Misenge Environmental and Technical Services Limited | 100% |
| Mushe Milling Limited | 100% |
| Kabundi Resources Limited | 100% |
| Investrust Bank Plc | 71.4% |
The Company also has other interests in the undernoted companies:
| Name | Shareholding | |||
| Rembrandt Properties | 49.00% | |||
| Maamba Collieries Limited | 35.00% | |||
| Konkola Copper Mines Plc | 20.60% | |||
| Kansanshi Mining Plc | 20.00% | |||
| Copperbelt Energy Corporation Plc | 24.10% | |||
| CEC Africa Investments Limited | 20.00% | |||
| CNMC Luanshya Copper Mines Plc | 20.00% | |||
| NFCA Africa Mining Plc | 15.00% | |||
| Mopani Copper Mines Plc | 10.00% | |||
| Copper Tree | 10.00% | |||
| Oranto Oil Block | 10.00% | |||
| ABRIDGED GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME | ||||
| Audited | Audited | |||
| 2019 | 2018 | |||
| ZMW'000 | ZMW'000 | |||
| Revenue | 155,611 | 60,982 | ||
| Gross profit | 79,096 | (17,487) | ||
| Operating (loss)/profit | (614,412) | 46,550 | ||
| Net finance income | 39,957 | (132,485) | ||
| Share of profit of equity accounted investees | 973,213 | 689,207 | ||
| Profit before tax | 398,758 | 603,272 | ||
| Income tax (expense)/credit | 49,105 | 241,287 | ||
| Profit from continuing operations | 447,863 | 844,559 | ||
| Loss from discontinued operations | - | (1,610) | ||
| Profit for the year | 447,863 | 842,949 | ||
| Earnings per share (k) | 2.79 | 5.25 | ||
| Basic and diluted earnings per share (k) | 2.79 | 5.25 |
| ABRIDGED COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME | ||||
| Audited | Audited | |||
| 2019 | 2018 | |||
| ZMW'000 | ZMW'000 | |||
| Revenue | 133,323 | 199,841 | ||
| Operating (loss)/profit | (366,877) | 343,748 | ||
| Net finance income | 96,927 | (123,835) | ||
| (Loss)/profit before tax | (269,950) | 219,913 | ||
| Income tax credit/(expense) | 162,426 | 213,500 | ||
| (Loss)/ profit for the year | (107,524) | 433,413 | ||
| Earnings per share (k) | (0.67) | 2.70 | ||
| Basic and diluted earnings per share (k) | (0.67) | 2.70 |
| ABRIDGED GROUP STATEMENT OF FINANCIAL POSITION | ||||||||
| Audited | Audited | |||||||
| 2019 | 2018 | |||||||
| Assets | ZMW'000 | ZMW'000 | ||||||
| Property, plant and equipment | 187,268 | 143,164 | ||||||
| Intangible assets | 8,532 | 367 | ||||||
| Investment property | 251,230 | 64,473 | ||||||
| Investments in associates | 10,276,405 | 7,355,864 | ||||||
| Financial assets at fair value through profit or loss | 584 | 336,082 | ||||||
| Inventories | 104,681 | 37,026 | ||||||
| Trade and other receivables | 1,153,236 | 1,022,880 | ||||||
| Deferred tax assets | 601,589 | 497,609 | ||||||
| Term deposits | 754,438 | 535,384 | ||||||
| Cash and cash equivalents | 74,480 | 339,386 | ||||||
| Total assets | 13,412,443 | 10,332,235 | ||||||
| Equity and liabilities | ||||||||
| Capital and reserves | 11,124,784 | 8,940,346 | ||||||
| Borrowings | 104,357 | 133,703 | ||||||
| Deferred tax liabilities | 245,455 | 256,072 | ||||||
| Trade and other payables | 1,453,503 | 488,989 | ||||||
| Provisions | 127,590 | 139,785 | ||||||
| Retirement benefits | 34,180 | 32,422 | ||||||
| Provisions for environmental rehabilitation | 145,460 | 118,081 | ||||||
| Current tax liabilities | 177,114 | 222,837 | ||||||
| Total equity and liabilities | 13,412,443 | 10,332,235 | ||||||
| ABRIDGED COMPANY STATEMENT OF FINANCIAL POSITION | ||||||||
| Audited | Audited | |||||||
| 2019 | 2018 | |||||||
| Assets | ZMW'000 | ZMW'000 | ||||||
| Property, plant and equipment | 85,819 | 71,089 | ||||||
| Intangible assets | 671 | 367 | ||||||
| Investment property | 157,606 | 64,473 | ||||||
| Investments in subsidiaries | 69,987 | - | ||||||
| Investments in associates | 9,703,369 | 4,694,323 | ||||||
| Financial assets at fair value through profit or loss | - | 336,082 | ||||||
| Trade and other receivables | 842,664 | 1,017,927 | ||||||
| Held-to-maturity investment securities | 727,554 | 535,384 | ||||||
| Cash and cash equivalents | 26,276 | 337,942 | ||||||
| Total assets | 11,613,946 | 7,057,587 | ||||||
| Equity and liabilities | ||||||||
| Capital and reserves | 8,661,948 | 5,790,154 | ||||||
| Borrowings | 103,271 | - | ||||||
| Deferred tax liabilities | 2,306,727 | 754,221 | ||||||
| Trade and other payables | 77,342 | 56,223 | ||||||
| Provisions | 127,590 | 139,785 | ||||||
| Retirement benefits | 5,513 | 4,340 | ||||||
| Provisions for environmental rehabilitation | 112,905 | 86,566 | ||||||
| Current tax liabilities | 218,650 | 226,298 | ||||||
| Total equity and liabilities | 11,613,946 | 7,057,587 | ||||||
| ABRIDGED GROUP STATEMENT OF CASH FLOWS | ||||||||
| Audited | Audited | |||||||
| 2019 | 2018 | |||||||
| ZMW'000 | ZMW'000 | |||||||
| Net cash flow from operating activities | (238,880) | 16,323 | ||||||
| Net cash used in investing activities | 38,181 | 198,218 | ||||||
| Net cash outflow on financing | (64,207) | (54,086) | ||||||
| Increase in cash and cash equivalents | (264,906) | 160,455 | ||||||
| Cash and cash equivalents at the beginning of the year | 339,386 | 178,931 | ||||||
| Cash and cash equivalents at the end of the year | 74,480 | 339,386 | ||||||
| ABRIDGED COMPANY STATEMENT OF CASH FLOWS | ||||
| Audited | Audited | |||
| 2019 | 2018 | |||
| ZMW'000 | ZMW'000 | |||
| Net cash flow from operating activities | (69,732) | 160,525 | ||
| Net cash used in investing activities | (345,205) | (652) | ||
| Net cash outflow on financing | 103,271 | (202) | ||
| Increase in cash and cash equivalents | (311,666) | 159,671 | ||
| Cash and cash equivalents at the beginning of the year | 337,942 | 178,271 | ||
| Cash and cash equivalents at the end of the year | 26,276 | 337,942 |
ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY
| Audited | Audited | |||
| 2019 | 2018 | |||
| ZMW'000 | ZMW'000 | |||
| Balance at 1 April | 8,771,841 | 8,013,913 | ||
| Profit for the year | 447,863 | 842,949 | ||
| Other comprehensive income | 2,138,241 | 83,484 | ||
| Dividend paid | (233,161) | - | ||
| Balance at 31 March | 11,124,784 | 8,940,346 | ||
| IFRS expected credit loss adjustments | - | (168,505) | ||
| Restated balance at 31 March | 11,124,784 | 8,771,841 | ||
ABRIDGED COMPANY STATEMENT OF CHANGES IN EQUITY
| Audited | Audited | ||||||
| 2019 | 2018 | ||||||
| ZMW'000 | ZMW'000 | ||||||
| Balance at 1 April | 5,790,154 | 5,491,126 | |||||
| (Loss)/ profit for the year | (107,524) | 433,413 | |||||
| Other comprehensive income | 3,212,479 | (134,385) | |||||
| Dividend paid | (233,161) | - | |||||
| Balance at 31 March | 8,661,948 | 5,790,154 | |||||
1. FINANCIAL PERFORMANCE
The Group reported a profit for the year of ZMW448 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 ZMW39.96 million in 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 ZMW448 million, there was a decline of 47% 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 ZMW108 million (2018: Profit ZMW433 million), mainly due to reduction in other income, impairment losses and fair value loss amounting to ZMW360 million, ZMW 373 million and ZMW 336 million respectively.
Group total assets increased by 30% to ZMW13,412 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 10,276 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 Monday, 16th December 2019
| Lusaka Securities Exchange Sponsoring Broker | |
| T | +260-211-232456 E | [email protected] W | www.sbz.com.zm Stockbrokers Zambia Limited (SBZ) is a member of the Lusaka Securities Exchange and is regulated by the Securities and Exchange Commission of Zambia |
|
| First Issued on 16 December 2019 |
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