CEC records revenue drop/ total assets rose to $274,711,000

[bingogo]

in 2009 from $178,977,000 in the previous year

CEC records revenue drop

By Business Reporter

COPPERBELT Energy Corporation (CEC) recorded a 13 per cent decrease in revenue in 2009 to US$154,169,000 from $177,486,000 in 2008 due to reduced load to mining firms, managing director for Corporate Development Michael Tarney has said.

And the company has completed the feasibility study of the 34-megawatts Kabompo Hydro Power project and would commence construction of power plant by the first quarter of 2011.

Mr Tarney said at a press conference in Lusaka yesterday the reduction in revenues was because of reduced load to mining companies, as some of them halted operations or suspended some mining projects.

He said, as a result, CEC reduced its operating costs by 11 per cent by cutting down on a number of obligations, as demand for electricity from the mines dwindled. The company recorded an increase in profit before tax to $19,126,000 in 2009 from $17,222,000 in the previous year with income after tax reaching $6,456,000 from $5,334,000 in 2008.

The company recorded an increase of 176 per cent to $6.5 million in income from other sources such as services and telecommunications.

He said this was despite the fact CEC witnessed a depressed demand of electricity by 18 per cent owing to reduced production by the mines as a result of low copper prices during the year under review because of the global financial crisis.

Mr Tarney, who is the company’s chief financial officer, said the reduction in costs did not include lay offs as no employee was retrenched.

“Its total assets rose to $274,711,000 in 2009 from $178,977,000 in the previous year,” the managing director said.

And CEC has completed the feasibility study of the 34-megawatts Kabompo Hydro Power project and would commence construction of power plant by the first quarter of 2011.

Mr Tarney said the feasibility study had confirmed that the estimated $80 million plant would have a 34-megawatts capacity, which would take three and half years to construct.

“The pre-feasibility study for the site estimated that the station would comprise a 34 megawatts power station, a dam wall 65 metres in height, an undeveloped power station and a 4km tunnel,” he said.

The feasibility study was initially jointly undertaken with Tata Africa Holdings, but the Indian multinational company pulled out, and CEC chairperson Hanson Sindowe said the company would solely develop the power station.

Mr Sindowe said CEC had successfully completed the line to the Konkola Expansion Project (also known as Konkola Deep Mining Project) for Konkola Copper Mines (KCM), a subsidiary of Vedanta Resources.

He said CEC was interested in development of generation projects, especially in the northern part of Zambia, which had a lot of potential but had remained undeveloped.

Meanwhile, Mr Tarney said the company had started works on construction of the dual circuit 220 kilovolts transmission inter-connector between Zambia and Democratic Republic of Congo (DRC) whose commission was expected by the second quarter of 2011.

In October 2009, CEC and Congolese power utility SNEL agreed to construct the new line that would facilitate the transfer of 550 megawatts of firm power from DRC to Zambia.