ZCCM-IH_Abridged Financial Results_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:

the Lusaka Securities Exchange (“LuSE”) the Securities and Exchange Commission (“SEC”) 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: 14 June 2021

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 NINE MONTH PERIOD ENDED 31 DECEMBER 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 nine-month period ended 31 December 2019.

CHANGE OF FINANCIAL YEAR END

The financial year end of the Group was changed from 31 March to 31 December in order to comply with the provisions of Section 71 of the Public Finance Management Act and align to the majority shareholder's financial year end. Accordingly, the current financial statements are prepared for nine (9) months from 1 April 2019 to 31 December 2019 and as a result, the comparative figures stated in the statement of profit or loss and other comprehensive income, statement of changes in equity, statement of cash flows and the related notes are not comparable.

STRUCTURE OF THE ZCCM-IH GROUP

The ZCCM-IH Group consisted of the following eight (8) subsidiary companies as at 31 December 2019:

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% Nkandabwe Coal Mine Limited 100% Kabundi Resources Limited 100% Limestone Resources Limited 100% Investrust Bank Plc 71.4%

The Company also had other interests in the undernoted companies:

Name Shareholding Rembrandt Properties 49.00% Central African Cement Company Limited 49.00% Maamba Collieries Limited 35.00% Copperbelt Energy Corporation Plc 24.10% Konkola Copper Mines Plc 20.60% Kansanshi Mining Plc 20.00% CEC Africa Investments Limited 20.00% Lubambe Copper Mine Plc 20.00% CNMC Luanshya Copper Mines Plc 20.00% Copper Tree Minerals Limited 15.58% NFCA Africa Mining Plc 15.00% Chibuluma Mines Plc 15.00% Chambishi Metals Plc 10.00% Mopani Copper Mines Plc 10.00% Oranto Oil Block 10.00% Nkana Alloy Smelting Company Limited 10.00%

 

 
ABRIDGED GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME     Audited   Audited     Nine Months to
31 Dec 2019   12 Months to 31 Mar 2019     ZMW'000   ZMW'000 Revenue    
 62,432    
 76,670 Gross profit   9,417   45,166 Operating loss   (155,385)   (580,284) Net finance income   139,074   5,829 Share of profit of equity accounted investees   420,348   973,213 Profit before tax   404,037   398,758 Income tax (expense)/credit   (22,871)   49,105 Profit from continuing operations    381,166   447,863 Loss from discontinued operations   (73,979)   - Profit for the year   307,187   447,863 Earnings per share (k)   1.91   2.79 Basic and diluted earnings per share (k)   1.91   2.79  
 
 
 
 
 
 
 
 
          ABRIDGED COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME     Audited   Audited     Nine Months to 31 Dec 2019   12 Months to 31 Mar 2019     ZMW'000   ZMW'000 Investment income  
 171,163    
 180,624 Operating profit /(loss)   17,096   (319,576) Net finance income   96,927   (123,835) Profit/(loss)/ before tax   175,601   (269,950) Income tax (expense)/ credit   (22,166)   162,426 Profit/(loss) for the year    153,435    (107,524)           Earnings per share (k)   0.95   (0.67)  
Basic and diluted earnings per share (k)   0.95   (0.67)  

 

   ABRIDGED GROUP STATEMENT OF FINANCIAL POSITION       Audited   Audited       31 Dec 2019   31 Mar 2019   Assets   ZMW'000   ZMW'000   Property, plant and equipment   299,125   187,268   Intangible assets   648   8,532   Investment property   167,970   251,230   Investments in associates   11,855,067   10,276,405   Goodwill   119,818   -   Financial assets at fair value through profit or loss   -   584   Inventories   52,057   104,681   Trade and other receivables   729,685   1,153,236   Assets held for sale   1,127,333   -   Deferred tax assets   564,304   601,589   Term deposits   274,960   754,438   Cash and cash equivalents   56,816   74,480   Total assets   15,247,783   13,412,443               Equity and liabilities           Share capital and reserves   12,629,831   11,025,116   Bank overdraft   2,641   -   Borrowings   -   104,357   Deferred tax liabilities   238,185   245,455   Trade and other payables   738,912   1,553,171   Liabilities associated with assets classified as held for sale   1,191,270   -   Provisions   83,118   127,590   Retirement benefits   34,669   34,180   Provisions for environmental rehabilitation   119,253   145,460   Current tax liabilities   209,904   177,114   Total equity and liabilities   15,247,783   13,412,443    
 
 
 
 
               ABRIDGED COMPANY STATEMENT OF FINANCIAL POSITION       Audited   Audited       31 Dec 2019   31 Mar 2019   Assets   ZMW'000   ZMW'000   Property, plant and equipment   88,439   85,819   Intangible assets   648   671   Investment property   167,970   157,606   Investments in subsidiaries   147,317   69,987   Investments in associates   10,746,818   9,703,369   Assets held for sale   387,110   -   Trade and other receivables   719,855   842,664   Term deposit   273,717   727,554   Cash and cash equivalents   54,359   26,276   Total assets   12,586,233   11,613,946    
Equity and liabilities           Capital and reserves   9,484,935   8,661,948   Borrowings   -   103,271   Deferred tax liabilities   2,688,472   2,306,727   Trade and other payables   52,271   77,342   Provisions   83,118   127,590   Retirement benefits   7,971   5,513   Provisions for environmental rehabilitation   55,258   112,905   Current tax liabilities   214,208   218,650   Total equity and liabilities   12,586,233   11,613,946    
          ABRIDGED GROUP STATEMENT OF CASH FLOWS
        Audited   Audited       Nine Months to
31 Dec 2019   12 Months to
31 Mar 2019       ZMW'000   ZMW'000               Net cash flow from operating activities   190,389   (238,880)   Net cash used in investing activities   37,696   38,181   Net cash outflow on financing   (136,702)   (64,207)   Increase in cash and cash equivalents   91,383   (264,906)   Cash and cash equivalents at the beginning of the year   74,480   339,386   Cash and cash equivalents at the end of the year   165,865   74,480   Included in the statement of financial position   54,175   74,480   Included in assets held for sale   111,688   -       165,865   74,480      
ABRIDGED COMPANY STATEMENT OF CASH FLOWS
        Audited   Audited       Nine months to
31 Dec 2019   12 Months to
31 Mar 2019       ZMW'000   ZMW'000               Net cash flow from operating activities   93,439   (80,596)   Net cash used in investing activities   37,915   (334,341)   Net cash outflow on financing   (103,271)   103,271   Increase in cash and cash equivalents   28,083   (311,666)   Cash and cash equivalents at the beginning of the year   26,276   337,942   Cash and cash equivalents at the end of the year   54,359   26,276                          

ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY

    Audited   Audited     9 Months to 31 Dec 2019   12 Months to
31 Mar 2019     ZMW'000   ZMW'000           Balance at 1 April   11,025,116   8,771,841 Profit for the period   307,187   447,863 Other comprehensive income   1,297,528   2,038,573 Dividend paid   -   (233,161) Balance at 31 December/ March   12,629,831   11,025,116  

 ABRIDGED COMPANY STATEMENT OF CHANGES IN EQUITY

      Audited   Audited          Nine months to
31 Dec 2019   12 months to 31 Mar 2019         ZMW'000   ZMW'000               Balance at 1 April   8,661,948   5,790,154   Profit/ (loss) for the period   153,435   (107,524)   Other comprehensive income   669,552   3,212,479   Dividend paid   -   (233,161)   Balance at 31 December/ March   9,484,935   8,661,948                             FINANCIAL PERFORMANCE

The Group reported a profit for the nine-month period of ZMW307 million (USD23 million) (March 2019: ZMW448 million (USD40 million)). The 31% decrease in profitability was mainly due to the fact that the previous period is accounting for 12 months as compared to 9 months for the current period. Furthermore, there was a decrease in share of profit of equity accounted investee companies on account of the impairment of receivables by associate companies such as Kansanshi Mining Plc and Copperbelt Energy Corporation Plc.

The Company reported a profit for the year of ZMW153 million (USD12 million) (March 2019: loss ZMW108 million (USD10 million)), mainly due to exchange gains on foreign denominated assets and reduced administrative costs such as impairment of financial assets accounted at fair value through profit or loss, loans and receivables.

The Group and Company's retained earnings as at 31 December 2019 were positive at ZMW2,191 million (USD179 million) (March 2019: ZMW 1,857 million (USD155 million)) and ZMW978 million (USD79 million) (March 2019: ZMW825 million (USD68 million)) respectively. The increase in retained earnings is attributed to recorded Group and Company record profits in this period of ZMW307 million (USD23 million) and ZMW153 million (USD12 million) respectively.

Group total assets increased by 14% to ZMW15.2 billion (USD 1.2 billion) as at 31 December 2019 from ZMW13.4 billion (USD1.1 billion) as at 31 March 2019. This is mainly attributed to an increase in values of investments in associates from ZMW 10.3 billion (USD956 million) as at 31 March 2019 to ZMW 11.9 billion (USD.

DIVIDEND

The Directors will recommend a final dividend payout of ZMW53,064, 601.26 (USD2,391,590.11) in total ( K 0.33 per share (USD0.0149)).

SIGNIFICANT DEVELOPMENTS

 ZCCM-IH's investments were steered towards the mining sector. Thus, three core strategies were employed targeted at driving portfolio growth which were:

Pursuit of the royalty model in order to introduce new revenue stream; Realignment of the portfolio to achieve more focus in mining and mining related activities; and Development of turnaround strategies for loss making subsidiaries. OUTLOOK

Looking into the future, the mining sector is generally expected to face challenges during early to mid-2020 due to depressed commodity prices and disruption in international trade caused by the Novel Coronavirus (COVID-19) pandemic.

Despite these challenges, ZCCM-IH is committed to enhance value creation for its shareholders. Thus, ZCCM-IH will continue to diversify within the mining sector to mitigate slumps that may be experienced in some metals at a particular time while taking advantage of surges occurring in other metals during the same time.

By Order of the Board

Chabby Chabala

Company Secretary

Issued in Lusaka, Zambia on 14 June 2021

Lusaka Securities Exchange Sponsoring Broker     T | +260-211-232456
 
E | advisory@sbz.com.zm
 
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 14 June 2021      

APPENDICES

US DOLLAR ABRIDGED GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME             31-Dec- 19   31-Mar-19   USD'000   USD'000         Revenue 4,687   6,848 Gross profit 707   4,034 Operating loss (11,664)   (51,831) Net finance income 10,440   521 Share of profit of equity accounted investees 31,555   86,926 Profit before tax 30,331   35,616 Income tax (1,717)   4,386 Profit for continuing operations 28,614   40,002 Profit for discontinued operations (5,554)   - Profit for the year 23,060   40,002 Earnings per share (USD) 0.14   0.25 Basic and diluted earnings per share (USD) 0.14   0.25  
US DOLLAR ABRIDGED COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME                         31-Dec- 19   31-Mar-19     USD'000   USD'000             Investment income 12,849   16,133   Operating profit/(loss) 1,283   (28,543)   Net finance income 11,899   4,433   Profit/(loss) before tax 13,182   (24,110)   Income tax (1,664)   14,508   Profit/(loss) for the year 11,518   (9,602)   Earnings per share (USD) 0.07   (0.06)   Basic and diluted earnings per share (USD) 0.07   ( 0.06)                  

 

US DOLLAR ABRIDGED GROUP STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019                   31-Dec-19   31-Mar-19   USD'000   USD'000 Assets       Non-Current Asset 1,066,794   976,391 Current Assets 138,250   123,892 Total Assets 1,205,044   1,100,283         Equity and Liabilities       Shareholders' Funds 1,017,413   904,440 Non-Current Liabilities 22,799   58,071 Current Liabilities 164,832   137,772 Total Equity and Liabilities 1,205,044   1,100,283          
US DOLLAR ABRIDGED COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019           31-Dec-19   31-Mar-19   USD'000   USD'000 Assets       Non-Current Asset 934,511   855,568 Current Assets 76,540   97,175 Total Assets 1,011,051   952,743         Equity and Liabilities       Shareholders' Funds 788,777   710,577 Non-Current Liabilities 197,218   198,945 Current Liabilities 25,056   43,221 Total Equity and Liabilities 1,011,051   952,743              
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