ZCCM-IH gains from strong Kwacha By CYNTHIA MWALE ZCCM-INVE

[bingogo]

ZCCM-IH gains from strong Kwacha
By CYNTHIA MWALE

ZCCM-INVESTMENT Holdings Plc has retained a K92 billion profit from foreign exchange gains due to the appreciation of the Kwacha unit last year, resulting in a K114.7 billion gain.

This is against foreign exchange loss of K272.4 billion recorded in 2008, according to the ZCCM-IH director’s half yearly summary for the period ended December 31, 2009 ,issued in Lusaka last week.

The report says the appreciation of the Kwacha against the US dollar in the period under review resulted in a retained profit of K92,492 million compared to a loss of K272.4 billion in 2008.

ZCCM-IH attributes the gain to the Kwacha appreciating against the dollar from K5,194 as at July 1, 2009, to K4,652 as at December 31, 2009.
This resulted in an exchange gain of K114.7 billion after translation of liabilities in the year under review. The exchange loss in 2008 was K306.6 billion.

The report says that the cost of turnover increased to K115.4 billion from K60.9 billion due to cost of sales of K41.9 billion arising from an increase in mine development costs at Maamba Collieries Limited (MCL) during the period under review.

It, however, notes that the group achieved a turnover of K105.6 billion during the six-month period ended December 31, 2009, representing a decrease of 18 percent from K128.3 billion for the same period in 2008. ZCCM-IH attributes the reduction to mainly negative effects of the global economic crisis which resulted in a drop in demand for base metals.

The company states that there was no price participation payment (deferred consideration) received because of the reduced demand in base metals compared to K25.3 billion in 2008.

It says the conditions that triggered the price participation payment were not met and another company, Chambishi Metals Plc. was under care and maintenance during the period under review.

The company says that there were coal sales at MCL amounting to K8.5 billion following the commencement of production last April, after a partial rehabilitation of the mine during the period under review compared to 2008 when there were no sales.

On Ndola Lime Company, over K75.3 billion turnover was recorded compared to K79.9 billion for the corresponding period in 2008. This translates in a six percent decrease.