TIDMZCC
RNS Number : 7713L
ZCCM Invs.Hldgs PLC
28 December 2018
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: 28 December 2018
ZCCM INVESTMENTS HOLDINGS PLC
(Incorporated in the Republic of Zambia)
DIRECTORS' INTERIM UNAUDITED FINANCIAL RESULTS FOR ZCCM
INVESTMENTS HOLDINGS AND ITS SUBSIDIARIES ("THE GROUP") FOR THE SIX
MONTHS PERIODED 30(th) SEPTEMBER 2018
Introduction
In compliance with the requirements of the Securities Act No. 41
of 2016 and the Listing Rules of the Lusaka Securities Exchange,
ZCCM Investments Holdings Plc (ZCCM-IH) announces the interim
unaudited financial results of the Company and its Subsidiaries
(collectively referred to as the Group) for the six months' period
ended 30(th) September 2018.
Structure of the ZCCM-IH Group
The ZCCM-IH Group consist of the following five (5)
companies:
(I) ZCCM-IH (Parent Company)
(II) Ndola Lime Company Limited (100% owned subsidiary)
(III) Misenge Environmental and Technical Services Limited (100% owned subsidiary)
(IV) Investrust Bank Plc (71.4% owned subsidiary)
(V) Nkandabwe Coal Mine Limited (100% owned subsidiary)
The Group has the following interests in associated companies
(i.e. interest of 20% and above):
(I) Kariba Minerals Limited 50.00%
(II) Maamba Collieries Limited 35.00%
(III) Konkola Copper Mines Plc 20.60%
(IV) Kansanshi Mining Plc 20.00%
(V) Copperbelt Energy Corporation Plc 20.00%
(VI) CEC Africa Investments Limited 20.00%
(VII) Lubambe Copper Mine Plc 20.00%
(VIII) CNMC Luanshya Copper Mines Plc 20.00%
Other interests of the Group are in the following companies:
(I) NFC Africa Mining Plc 15.00%
(II) Chibuluma Mines Plc 15.00%
(III) Chambishi Metals Plc 10.00%
(IV) Mopani Copper Mines Plc 10.00%
(V) Nkana Alloy Smelting Company Limited 10.00%
Financial Performance
The Group recorded a turnover of K67.5 million for the six-month
period ended 30(th) September 2018 which represents 80% over the
turnover of K37.5 million reported during the six months to 30(th)
September 2017. The increase is mostly on account of the
consolidation of Investrust Bank following the Group's increase in
the Bank's shareholding to 71.4%. The Group recorded an operating
loss of K222 million (Sept 2017: loss K123 million) and received
dividends of K44.8 million from Kansanshi Mining Plc (September
2017: Nil).
The Group's share of profit in associate companies was K437.5
million (September 2017: K227.3 million). The performance of the
associate companies has continued to improve due to continued
increase in demand for copper on the world market resulting in
increased copper prices. Overall the Group recorded an after-tax
profit of K510 million (September 2017: K87.8 million).
Operations and Strategic developments
Ndola Lime Company Limited
In September 2018, Two (2) former employees of Ndola Lime
Company Limited (NLC) instituted proceedings in the High Court of
Zambia to place NLC under supervision pursuant to the Corporate
Insolvency Act No. 9 of 2017. By order of the Court dated 5th
October 2018, the Official Receiver was appointed as Interim
Business Administrator of NLC.
The application for the Business Rescue Proceedings will be
heard in January 2019 at which all affected persons (including
ZCCM-IH) will be heard.
Investrust Bank Plc
In April 2018, ZCCM-IH conducted a Mandatory Offer to purchase
shares from all other minority shareholders in Investrust Bank Plc
(Investrust) in accordance with Rule 56 of the Third Schedule of
the Securities (Takeovers and Mergers) Rules, Statutory Instrument
No 170 of 1993, issued pursuant to the Securities Act, Chapter 354
of the Laws of Zambia, now repealed and replaced by the Securities
Act No 41 of 2016, (the "Securities Act").
The Mandatory Offer culminated into ZCCM-IH acquiring an
additional 2,125,890 shares, representing a 26.0% shareholding in
Investrust; ZCCM-IH effectively increased its shareholding from
45.4% to 71.4%.
Subsequent to increasing its shareholding in Investrust, ZCCM-IH
has committed to recapitalise and drive strategic performance
improvements of the Bank.
Cement Manufacturing Project
During the period under review, ZCCM-IH signed a Shareholders'
Agreement with China Machinery Construction Group Limited
(SinoConst) for the development of a cement plant to be located in
Masaiti District in the Copperbelt Province of Zambia under the
incorporated Special Purpose Vehicle, Central African Cement
Limited. CBMI Construction Co., Limited (Sinoma) has been engaged
as the Engineering, Procurement and Construction (EPC) Contractor
for the project once it reaches financial close.
Tailings Reprocessing
In June 2018, ZCCM-IH and Horizon Mining Limited executed a
Shareholders Agreement relating to the incorporated Joint Venture
Company, Copper Tree Minerals Limited (Copper Tree), in which
ZCCM-IH and Horizon Limited each have shareholdings of 15.58% and
84.42% respectively. Copper Tree was established to reprocess
material at Tailing Dams 25, 26 and 27 located in Kitwe.
Oil Exploration
ZCCM-IH obtained licenses for two oil blocks situated in the
Western and Muchinga provinces of Zambia. In order to undertake
exploratory works on these oil blocks ZCCM-IH entered into a
partnership with Oranto Petroleum (Oranto), where ZCCM-IH farmed
out a 90% participating interest on the oil blocks to Oranto and
retained 10%. Under the partnership, Oranto will fully fund all
exploratory activities and development works as well as provide
technical support for the project.
Mushe Milling Limited
As part of ZCCM-IH's strategic intent to participate in the
agriculture, agri-business or agro-processing [sub] sectors,
ZCCM-IH began discussions regarding the potential acquisition of
Mushe Milling Limited (Mushe), a maize milling company located in
Lusaka. The opportunity to acquire Mushe has been assessed and
discussions have reached an advanced stage with the terms and
conditions of the transaction close to finalisation.
Real Estate/Property
During the period under review ZCCM-IH expressed interest to
invest in the development and purchase of Leopards Square, a mixed
commercial property with a unique tenant mix. The opportunity would
allow for ZCCM-IH to invest into this property through the purchase
into the capital structure of the property at pre-development stage
and earn an enhanced return due to development profits/savings.
This transaction is nearing finalization, upon completion of a
Subscription Agreement and a Shareholders Agreement. ZCCM-IH also
acquired Village Villas Complex in Roma area in Lusaka pursuant to
its strategy in investment property.
Silica Sand Mining and Glass Manufacturing
During the period under review ZCCM-IH placed a formal offer to
acquire the assets held by Kapiri Glass Manufacturing Company
(2008) Limited (In Receivership), including the mining rights to
the primary silica sand deposit in Kapiri Mposhi. However, the
transaction has not been completed or finalised, as an injunction
has been placed against to halt any further progression on the
transaction due to legal action taken against the Kapiri Glass
Manufacturing Company (2008) Limited (In Receivership).
Kariba Minerals Limited
Subsequent to the period under review, ZCCM-IH acquired an
additional 50% shareholding in Kariba Minerals Limited from
Gemfields Limited at a total consideration of US$2.5 million. The
completion of the transaction is subject to regulatory approvals.
Going forward, ZCCM-IH will implement a robust strategic plan aimed
at improving production, processing and marketing activities in
order to increase profitability of the mine.
ABRIDGED GROUP STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
K'000 K'000
30-Sep-18 30-Sep-17
Revenue 67,522 37,647
Cost of sales (36,250) (44,449)
----------- --------------------------------
Gross profit /(loss) 31,272 (6,802)
Other income 26,415 5,301
Environmental expenses - (364)
Administration expenses (280,160) (121,479)
----------- --------------------------------
Operating loss (222,473) (123,344)
----------- --------------------------------
Finance costs (41,304) (100,391)
Finance income 437,712 86,729
----------- --------------------------------
Net finance income 396,408 (13,662)
----------- --------------------------------
Share of profit of equity accounted investees 437,516 227,349
----------- --------------------------------
Profit before tax 611,451 90,343
Income tax (101,372) (2,523)
----------- --------------------------------
Profit from continuing operations 510,079 87,820
----------- --------------------------------
Retained profit 510,079 87,820
=========== ================================
EPS 3.17 0.55
=========== ================================
ABRIDGED GROUP STATEMENT OF FINANCIAL POSITION
K'000 K'000
30-Sep-18 30-Sep-17
Assets Employed
Non-Current Asset 11,384,543 9,709,983
Current Assets 2,338,529 1,369,944
--------------- ---------------
Total Assets 13,723,072 11,079,927
=============== ===============
Equity and Liabilities
Shareholders' Funds 11,194,363 9,833,950
Non-Current Liabilities 682,888 445,725
Current Liabilities 1,827,659 800,252
Non-controlling interests 18,162 -
--------------- ---------------
Total Equity and Liabilities 13,723,072 11,079,927
=============== ===============
ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY
K'000 Share Share Revaluation Translation Retained Total equity Non- Total equity
capital premium reserve reserve earnings controlling
interest
Balance at
1 April 2017 1,608 2,089,343 259,395 4,910,085 1,401,167 8,661,598 - 8,661,598
Total
comprehensive
income
Profit for the
period - - - - 87,820 87,820 - 87,820
Currency
translation
- equity
accounted
investees - - - 1,084,532 - 1,084,532 - 1,084,532
----------- ------------ ---------------------------- --------------- ------------ ------------- ---------------- -------------
Balance at 30
September
2017 1,608 2,089,343 259,395 5,994,617 1,488,987 9,833,950 - 9,833,950
----------- ------------ ---------------------------- --------------- ------------ ------------- ---------------- -------------
Balance at
1 April 2018 1,608 2,089,343 246,987 4,823,365 1,779,043 8,940,346 - 8,940,346
Total
comprehensive
income
Profit for the
period - - - - 519,939 519,939 (9,860) 510,079
Acquisition of
subsidiary - - - - - - 28,022 28,022
Deferred tax on
revaluation
reserve - - (555) - - (555) - (555)
Currency
translation
of equity
accounted
investees - - - 1,687,163 - 1,687,163 - 1,687,163
Share of
associates'
OCI- - - - - 47,470 47,470 - 47,470
----------- ------------ ---------------------------- --------------- ------------ ------------- ---------------- -------------
Balance at 30
September
2018 1,608 2,089,343 246,432 6,510,528 2,346,452 11,194,363 18,162 11,212,525
----------- ------------ ---------------------------- --------------- ------------ ------------- ---------------- -------------
ABRIDGED GROUP STATEMENT OF CASH FLOWS
30-Sept -2018 30-Sept-2017
K'000 K,000
Profit for the period 510,079 87,821
Cash generated from operating activities 261,598 6,833
Net cash from operating activities 107,009 (40,810)
Net cash used in investing activities (92,000) 32,399
Net cash used in/ from financing activities (27,047) (26,164)
-------------- --------------
Net (decrease)/ increase in cash and
cash equivalents (12,038) (34,575)
Cash and cash equivalents at 1 April 339,387 178,931
-------------- --------------
Cash and cash equivalents at 30 September 327,349 144,356
-------------- --------------
By Order of the Board
Chabby Chabala
Company Secretary
Issued in Lusaka, Zambia on Friday 28(th) December 2018
T | +260-211-232456
E | advisory@sbz.com.zm
W | 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 28 December 2018
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END
IR LVLLLVLFEFBZ
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