TIDMZCC
RNS Number : 4510E
ZCCM Invs.Hldgs PLC
29 June 2023
SENS ANNOUCEMENT
(the "Announcement")
ISSUER
ZCCM INVESTMENTS HOLDINGS PLC ("ZCCM-IH")
Incorporated in the Republic of Zambia
Company registration number: 119540000771
Share Code: ZCCM-IH
ISIN: ZM0000000037
BROKER
Pangaea Securities Limited
[a member of the Lusaka Securities Exchange]
Regulated and Licensed by the Securities and Exchange Commission
Zambia
Telephone Number: +260 211 220707 | Website: www.pangaea.co.zm
AUTHORISATION
Approval for this Announcement has been granted by:
-- The Lusaka Securities Exchange ("LuSE")
-- The Securities and Exchange Commission Zambia ("SEC")
-- ZCCM-IH
DISCLAIMER AND RISK WARNING
The 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 ON: 29 June 2023
ZCCM INVESTMENTS HOLDINGS PLC
(Incorporated in the Republic of Zambia)
PROVISIONAL ABRIDGED UNAUDITED FINANCIAL STATEMENTS FOR THE
YEARED 31 DECEMBER 2022
INTRODUCTION
In compliance with the requirements of the Securities Act No. 41
of 2016, ZCCM Investments Holdings PLC ("ZCCM-IH PLC" or "the
Company") announces the provisional financial statements results of
the Company and its subsidiaries (Collectively referred to as the
"the Group") for the year ended 31 December 2022.
STRUCTURE OF THE ZCCM-IH GROUP
The ZCCM-IH Group consists of the following Nine (9) companies: Name Shareholding
Mopani Copper Mine PLC 100.00%
-------------
Ndola Lime Company Limited (In Liquidation) 100.00%
-------------
Kariba Minerals Limited 100.00%
-------------
Misenge Environmental and Technical Services
Limited 100.00%
-------------
Mushe Milling Limited 100.00%
-------------
Kabundi Resources Limited 100.00%
-------------
Limestone Resources Limited 100.00%
-------------
Investrust Bank PLC 71.40%
-------------
Zambia Gold Company Limited 51.00%
-------------
The Company also has other interests in the undernoted companies: Name Shareholding
Rembrandt Properties 49.00%
-------------
Central African Cement Limited 49.00%
-------------
Maamba Collieries Limited 35.00%
-------------
Konkola Copper Mines PLC 20.60%
-------------
Kansanshi Mining PLC 20.00%
-------------
Copperbelt Energy Corporation PLC 24.10%
-------------
CNMC Luanshya Copper Mines PLC 20.00%
-------------
Lubambe Copper Mines PLC 20.00%
-------------
NFCA Africa Mining PLC 15.00%
-------------
Chibuluma Mines PLC 15.00%
-------------
Chambishi Metals PLC 15.00%
-------------
Copper Tree Mineral Limited 15.58%
-------------
Oranto Oil Block 10.00%
-------------
Nkana Alloy Smelting Company Limited 10.00%
-------------
PROVISIONAL ABRIDGED GROUP STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
----------------------------------------------------------------------------------------------------------------------------------------
Unaudited Unaudited
31 Dec 31 Dec
2022 2021
ZMW'000 ZMW'000
Revenue 11,959,354 14,395,493
Gross (loss)/profit (2,749,760) 164,460
Operating loss (3,354,959) (13,313,773)
Net finance cost (1,813,846) (866,045)
Share of profit of equity accounted investees 1,603,143 3,004,542
Loss before tax (3,565,662) (11,175,276)
Income tax (expense)/credit (249,504) 66,476
Loss for the year (3,815,166) (11,108,800)
Earnings per share (ZMW) (23.73) (69.08)
Basic and diluted earnings per share
(ZMW) (23.73) (69.08)
PROVISIONAL ABRIDGED COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
------------------------------------------------------------------------------
Unaudited Unaudited
31 Dec 31 Dec
2022 2021
ZMW'000 ZMW'000
Investment income 4,916,309 968,137
Revenue from contracts with customers 778 79,837
Operating profit 4,054,286 1,841,747
Net finance income/(cost) 440,763 (251,987)
Profit before tax 4,495,049 1,589,760
Income tax (expense)/credit (236,321) 86,158
Profit for the year 4,258,728 1,675,918
Earnings per share (ZMW) 26.48 10.42
Basic and diluted earnings per share
(ZMW) 26.48 10.42
PROVISIONAL ABRIDGED GROUP STATEMENT OF FINANCIAL POSITION
--------------------------------------------------------------------------------------------
Unaudited Unaudited
31 Dec 31 Dec
2022 2021
----------------------------------------------- --------------------- -------------------
ZMW'000 ZMW'000
Assets
Non-current Assets
Property, plant, and equipment 12,484,907 12,857,452
Exploration and evaluation asset 51,437 38,989
Intangible assets 4,582,654 4,676,296
Investment property 200,751 192,227
Investments in associates 15,174,862 17,067,159
Financial assets at fair value through
profit or loss 1,252,400 1,458,000
Trade and other receivables 2,931,539 1,330,438
Environmental Protection Fund 94,433 87,130
Deferred tax assets 122,852 340,848
Current Assets
Inventories 4,921,366 4,651,886
Trade and other receivables 762,831 3,264,975
Assets held for sale 2,103,761 1,478,611
Term deposits 5,340,202 653,742
Cash and cash equivalents 329,173 184,625
Total assets 50,353,168 48,282,378
Equity and liabilities
Capital and reserves 9,343,136 14,272,867
Non-current Liabilities
Borrowings 27,476,859 24,546,001
Retirement benefits 182,940 96,287
Provisions for environmental rehabilitation 1,221,068 1,198,814
Borrowings 864,411 797,566
Current Liabilities
Overdraft 688,120 70,449
Trade and other payables 7,451,177 4,796,508
Provisions 487,689 378,746
Current income tax liabilities 190,143 202,563
Retirement benefits 139,131 244,001
Liabilities associated with assets classified
as held for sale 2,308,494 1,678,576
Total equity and liabilities 50,353,168 48,282,378
PROVISIONAL ABRIDGED COMPANY STATEMENT OF FINANCIAL POSITION
------------------------------------------------------------------------------------
Unaudited Unaudited
31 Dec 31 Dec
2022 2021
--------------------------------------------- ----------------- -----------------
ZMW'000 ZMW'000
Assets
Non-current Assets
Property, plant, and equipment 90,471 78,439
Intangible assets 3,377 2,537
Investment property 200,751 192,227
Investment in subsidiaries 405,051 327,939
Investments in associates 16,256,411 20,603,089
Financial assets at fair value through
profit or loss 1,252,400 1,458,000
Trade and other receivables 958,162 676,478
Deferred tax assets 258,966 468,109
Current Assets
Inventories 16,427 22,034
Trade and other receivables 173,829 197,844
Term deposits 5,340,202 632,992
Cash and cash equivalents 45,586 81,498
Assets held for sale 145,700 430,977
Total assets 25,147,333 25,172,163
Equity
Capital and reserves 24,679,852 24,732,194
Non-Current Liabilities
Retirement Benefit Obligations 9,275 10,256
Provisions for environmental rehabilitation 39,357 79,931
Borrowings - 1,135
Current Liabilities
Trade and other payables 121,005 116,883
Provisions 108,686 29,528
Current income tax liabilities 189,158 202,236
Total equity and liabilities 25,147,333 25,172,163
PROVISIONAL ABRIDGED GROUP STATEMENT OF CASH FLOWS
---------------------------------------------------------------------------------------
Unaudited Unaudited
31 Dec 31 Dec
2022 2021
--------------------------------------------------- --------------- ----------------
ZMW'000 ZMW'000
Net cash flow generated from operating activities 1,188,449 416,970
Net cash flow used from investing activities (906,777) (103,180)
Net cash outflow from financing activities (698,833) (402,694)
Decrease in cash and cash equivalents (417,161) (88,904)
Cash and cash equivalents at the beginning
of the year 336,101 425,005
--------------- ----------------
Cash and cash equivalents at the end of
the period (81,060) 336,101
--------------- ----------------
Included in the statement of financial position (358,947) 114,176
Included in assets held for sale 277,887 221,925
--------------- ----------------
(81,060) 336,101
--------------------------------------------------- --------------- ----------------
PROVISIONAL ABRIDGED COMPANY STATEMENT OF CASH FLOWS
---------------------------------------------------------------------------------------
Unaudited Unaudited
31 Dec 31 Dec
2022 2021
--------------------------------------------------- --------------- ----------------
ZMW'000 ZMW'000
Net cash flows from operating activities 4,726,479 524,906
Net cash flows used in investing activities (4,761,256) (439,590)
Net cash flows used in financing activities (1,135) (124,457)
Decreased in cash and cash equivalents (35,912) (39,141)
Cash and cash equivalents at the beginning
of the year 81,498 120,639
Cash and cash equivalents at the end of
the period 45,586 81,498
---------------------------------------------------- --------------- ----------------
PROVISIONAL ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited
31 Dec 31 Dec
2022 2021
---------------------------- ------------ -------------
ZMW'000 ZMW'000
Balance at 1 Jan 14,272,867 21,004,417
Loss for the year (3,815,166) (11,108,800)
Other comprehensive income (1,029,340) 4,430,326
Dividend paid (85,225) (53,076)
------------ -------------
Balance at 31 Dec 9,343,136 14,272,867
============ =============
PROVISIONAL ABRIDGED COMPANY STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited
31 Dec 31 Dec
2022 2021
---------------------------- ---- ------------ -----------
ZMW'000 ZMW'000
Balance at 1 Jan 23,732,194 23,164,958
Profit for the year 4,258,728 1,675,918
Other comprehensive income (3,225,845) (55,606)
Dividend paid (85,225) (53,076)
------------ -----------
Balance at 31 Dec 24,679,852 24,732,194
------------ -----------
1. FINANCIAL PERFORMANCE
(I) Group Performance
Performance at Group level was impacted by the performance of
Mopani Copper Mines Plc ("Mopani") resulting in a loss of ZMW 3.82
billion (US$ 223.76 million) recorded in 2022 compared to a loss of
ZMW11.08 billion (US$ 564.57 million) recorded in 2021. The loss at
Group level was on account of :
-- Declined average copper price from US$9,315 per ton in 2021
to US$8,815 per ton in 2022;
-- Lower copper production level experienced at Mopani due to
the smelter shutdown; and
-- No significant impairment of goodwill was recognised during
the year (2021: ZMW 13.3 billion( US$ 678.73 million)).
The Group recorded an increase in total assets from ZMW48.3
billion recorded in 2021 to ZMW 50.4 billion in 2022 largely on
account of exchange differences from foreign currency denominated
assets as well as improvement in the performance of some investee
companies.
The Group's total liabilities increased from ZMW34 billion in
2021 to ZMW41 billion in 2022 on account of the Glencore long-term
loan facility advanced to Mopani of US$1.5 billion.
The Group's retained earnings as of 31 December 2022 were
negative at ZMW10.50 billion (2021: ZMW6.84 billion). The movement
in retained earnings is attributable to the recorded Group loss of
ZMW3.82 billion recorded in 2022 (2021: ZMW11.08 billion loss).
(II) Company Performance
Company performance improved with a profit for the year of ZMW
4.26 billion in 2022 from ZMW1.68 billion recorded in 2021. The
improved performance was due to a special dividend received from
Kansanshi Copper Mining PLC of ZMW3.3 billion (US$ 195
million).
2. KEY OPERATIONS AND STRATEGIC DEVELOPMENTS
(I) Mopani Copper Mines PLC ("Mopani")
Below is a summary of Mopani's financial performance which has
been incorporated in the Group's Financial Statements:
Statement of Profit and Loss and Other Comprehensive - Mopani
Copper Mine PLC
2022 Audited
2021
ZMW'000 ZMW'000
1 1 , 854 14, 116
Revenue , 038 , 2 1 7
(14,565 146 , 36
Gross (loss)/profit , 499) 5
( 2,844 ( 1, 1 92
Operating loss , 097 ) , 992 )
( 2,238
Net finance cost , 4 7 6 ) (604,157)
( 5 , 082 (1, 459
Loss before tax , 573 ) ,9 35 )
( 5 , 082 (1, 459
Loss for the year , 573 ) ,9 35 )
Statement of Financial Position - Mopani
Copper Mine PLC
2022 Audited
2021
Assets ZMW'000 ZMW'000
Property, plant, and equipment 16,818,826 17,327,597
Inventories 4,836,680 4,564,852
Trade and other receivables 2,616,620 3,595,239
Environmental Protection Fund 94,433 87,130
Cash and cash equivalents 159,584 78,469
Total assets 24,526,143 25,653,287
Equity and liabilities
Capital and reserves (13,547,663) (6,054,075)
Borrowings 28,341,270 25,342,432
Trade and other payables 7,245,750 4,606,104
Bank overdraft 678,900 65,743
Retirement benefits 312,796 330,032
Provisions 376,431 347,321
Provisions for environmental rehabilitation 1,118,659 1,015,730
Total equity and liabilities 24,526,143 23,653,287
In 2022, Mopani recorded a loss of ZMW5.08 billion (US$ 298.1
million)compared to ZMW 1.46 billion (US$ 74.2 million). The
recorded results were due to reduced copper production levels from
72,694 tonnes in 2022 from 87,618 tonnes in 2021. The lower
production levels recorded in 2022 was on account of the smelter
shutdown for 45-days from August to September 2022. This shutdown
was necessitated by maintenance, refurbishment of critical
components, and replacement of refractory bricks.
Mopani's future growth prospects hinges on its planned
completion and commissioning of expansion capital projects. The
Company has planned for a ramped-up production profile as these
projects are expected to be commissioned to full capacity by 2027.
In addition to spending on its expansion projects, the Company has
continued to ensure that sustaining capital is secured and utilised
in the best possible way given the current funding limitations.
During the year, Mopani has spent US$77.4 million mostly on mining
development and the smelter maintenance and refurbishment (2021:
US$39 million). The Group remains optimistic with the enormous task
ahead to secure funds for Mopani of more than US$300 million to
complete the expansion projects over the next three years, as well
as an additional US$150 million for sustaining capital over the
same period.
Considering the above , and as per the Market Announcement dated
15 June 2022, ZCCM-IH engaged a globally renowned investment bank,
Rothschild & Co., South Africa (Pty) Ltd ("Rothschild &
Co") to assist ZCCM-IH with the strategic review of Mopani to
ensure its sustainability and continued development. Mopani's
future will be realised as the expansion projects are progressively
completed to be able to produce over 200,000 tonnes of finished
copper cathode from 2027 onwards. Therefore, the review is being
undertaken to provide strategic options that will ensure Mopani is
operating optimally and is expected to be complement by December
2023.
(II) Kansanshi Royalty Transaction with FQM
After the year end on 31 March 2023, the shareholders of ZCCM-IH
approved an agreement for a royalty transaction between ZCCM-IH and
First Quantum Minerals Limited. The transaction involved ZCCM-IH
conversion of its 20% equity interest in Kansanshi Mining PLC into
a 3.1% life of mine royalty.
This transaction is in line with the key objective of the
ZCCM-IH strategic plan of maximising value extraction from
investments.
The implemented Kansanshi Royalty transaction will ensure the
following benefits to ZCCM-IH;
-- Guaranteed revenue: ZCCM-IH expected to record consistent and
predictable revenue over the entire mine life and will therefore
benefit throughout the existence of the KMP mine if it is in
operation.
-- Greater revenue: Royalty produces greater total revenue over
time compared to the dividend model.
-- Access to financing: Greater capital accumulation will lead
to improved access to financing; and
-- Drive portfolio growth: Improved cashflow will allow
increased investment into greenfield and brownfield projects.
(III) Delayed Publication of 2021 and 2022 Financial
Statements
In 2021, ZCCM Investments Holdings PLC ("ZCCM-IH" or "the
Company") acquired 90% shareholding in Mopani Copper Mines PLC
bringing its shareholding to 100%. As a result of this acquisition,
an independent valuation of Mopani's assets and liabilities at
acquisition was required as per the provisions of the International
Financial Reporting Standard 3 (IFRS 3). This process took longer
than expected and resulted in delays in finalising the 2021 and
subsequently the 2022 Financial Statements. This valuation exercise
has now been completed and undergoing further audit reviews.
Considering the above, the 2022 comparative amounts in the
statement of profit or loss and other comprehensive , statements of
financial position, statement of changes in equity have been
updated to reflect the draft valuation results of the fair
valuation of assets and liabilities related to the acquisition of
90% shares of Mopani as of 31 March 2021. The key changes made to
the 2022 comparative amounts include:
-- Accounting for goodwill totalling ZMW 13.3 billion which was
recognised at acquisition and impaired in 2021. The accounting
treatment of goodwill is in accordance with the International
Financial Reporting Standards; and
-- Certain comparative (2021) amounts in the statement of profit
or loss and other comprehensive income have been re-presented such
as revenue, cost of sales, other administration expenses , to
ensure consistency.
The Company expects to publish its audited Financial Statements
by 31July 2023. I n the interim, ZCCM-IH is issuing to the
shareholders and the market the unaudited Financial Results for the
year ended 31 December 2022. The unaudited financial results for
the year ended 2021 were issued in 2022.
3. OUTLOOK
ZCCM-IH continues to position itself to pursue more
opportunities in the mining sector. As per ZCCM-IH strategy, which
is focused on mining and mining related investments, the Company
will seek mutually beneficial investments. ZCCM-IH is pursuing
specific projects in gold, manganese, copper, cobalt as way of
maximising value extraction and improving shareholder value.
ZCCM-IH's focus going forward continues to be:
-- Raising both short-term as well long-term capital to support
mining and mining related investments within the group. Critical to
this is the raising of adequate capital for Mopani to enable the
growth and sustainability of the mine ;
-- Implementation of more predictable alternative income streams such as royalty model;
-- Continued research and development to support investments in
viable mining and mineral value Addition projects;
-- Continued implementation of the turnaround plans for loss making investee companies; and
-- Divestment from non-viable and non-mining related investments.
By Order of the Board
Charles Mjumphi
Company Secretary
Issued on 29 June 2023
APPICES
US DOLLAR ABRIDGED GROUP STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Unaudited Unaudited
31 Dec 31 Dec
2022 2021
US$'000 US$'000
Gross (loss)/profit (161,277) 8,358
Operating (loss)/profit (196,773) (676,634)
Net finance income (106,384) (44,014)
Share of profit of equity accounted investees 94,026 152,697
(Loss) before tax (209,131) (567,951)
Income tax (expense) /credit (14,634) 3,378
(Loss)/profit for the year (223,765) (564,573)
Earnings per share (US$) (1.39) (3.51)
Basic and diluted earnings per share (US$) (1.39) (3.51)
------------------------------------------------ --------------- --------------
US DOLLAR ABRIDGED COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Unaudited Unaudited
31 Dec 31 Dec
2021 2020
US$'000 US$'000
Investment income 288,347 49,203
Revenue from contracts with customers 46 4,057
Operating profit 237,788 93,601
Net finance income 25,851 (12,807)
Profit before tax 263,639 80,794
Income tax credit/(expense) (13,860) 4,379
Profit for the year 249,779 85,173
Earnings per share (US$) 1.55 0.53
Basic and diluted earnings per share (US$) 1.55 0.53
--------------------------------------------- -------------- ------------
US DOLLAR ABRIDGED GROUP STATEMENT OF FINANCIAL POSITION
----------------------------------------------------------------------------------------
Unaudited Unaudited
31 Dec
31 Dec 2022 2021
--------------------------------------------- ------------------- -------------------
US$'000 US$'000
Assets
Property, plant, and equipment 756,962 777,599
Exploration and evaluation asset 2,767 2,077
Intangible assets 275,657 280,844
Investment property 11,120 11,541
Investments in associates 840,596 1,024,655
Financial assets at fair value through
profit or loss 69,375 87,533
Trade and other receivables 162,390 79,875
Environmental Protection Fund 5,231 5,231
Deferred tax assets 6,805 20,463
Inventories 295,855 280,927
Trade and other receivables 42,256 196,018
Term deposits 295,815 39,248
Cash and cash equivalents 18,234 11,084
Assets held for sale 116,536 88,771
Total assets 2,899,599 2,905,866
Equity and liabilities
Capital and reserves 627,889 864,049
Borrowings 1,522,053 1,473,659
Retirement benefits 10,134 5,781
Provisions for environmental rehabilitation 67,640 71,973
Bank overdraft 38,118 4,230
Borrowings 47,883 47,883
Trade and other payables 412,750 287,966
Provisions 27,015 22,739
Current tax liabilities 10,533 12,161
Retirement benefits 7,707 14,649
Liabilities directly associated with
assets classified as held for sale 127,877 100,776
Total equity and liabilities 2,899,599 2,905,866
---------------------------------------------- ------------------- -------------------
US DOLLAR ABRIDGED COMPANY STATEMENT OF FINANCIAL POSITION
--------------------------------------------------------------------------------
Unaudited Unaudited
31 Dec 2022 31 Dec 2021
--------------------------------------------- --------------- ---------------
US$'000 US$'000
Assets
Property, plant, and equipment 7,408 6,702
Intangible assets 198 149
Investment property 11,120 11,541
Investments in subsidiaries 22,437 19,688
Investments in associates 900,507 1,236,940
Financial assets at fair value through
profit or loss 69,375 87,533
Trade and other receivables 53,076 40,613
Deferred tax assets 14,345 28,104
Inventory 830 1,159
Trade and other receivables 9,629 11,878
Term deposits 295,815 38,003
Cash and cash equivalents 2,525 4,893
Assets held for sale 8,071 25,874
Total assets 1,395,336 1,513,077
Equity and liabilities
Capital and reserves 1,369,440 1,486,662
Borrowings - -
Retirement benefits 514 616
Provisions for environmental rehabilitation 2,180 4,799
Borrowings - 68
Trade and other payables 6,703 7,017
Provisions 6,021 1,773
Current tax liabilities 10,478 12,142
Total equity and liabilities 1,395,336 1,513,077
---------------------------------------------- --------------- ---------------
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