CEC H1 to June 2010 earnings up 65.5% on H1, 2009

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Revenue was up 6.6% to US$83.3 million propelled by an increase in power sales to the mines by 4.5% to 461MW compared to 441MW in the same period in 2009, coupled with a tariff indexation and increase in revenue from telecoms services.



However, cost of sales, mainly payments to Zesco under the Bulk Supply Agreement, was up 5% to US$59.2 million (H1 2009: US$56.4 million) on the back of an increase in sales volume and annual tariff indexation. Operating expenses decreased by 12% to US$12.6 million (H1 2009: US$14.4 million) owing to prudent cost management and the benefit of favourable exchange rate hedging.



Net profit for the period came in at US$7.17 million up by 65.6% on the corresponding period in 2009. Consequently, earnings per share rose by the same token to US$0.0072 (7.2 US cents) (H1 2009: 0.0043%).



The company reported that Tte operations of the Company’s high-voltage transmission and distribution system were maintained to a satisfactory standard and no infringement of operating standards occurred.



Sales of electrical energy to CEC customers in the first half of the year totaled 1,771 GWh representing a 6% increase from the 1,676 GWh sales of the previous year. Total energy import into the network was 2,635 GWh of which 1,815 GWh were company purchases whilst 820 GWh was wheeled on behalf of ZESCO.



CEC stated that international wheeling was attributable to power export requirements from SNEL in the DRC to other utilities within the Southern African Power Pool (SAPP).



CEC further said that operations of CNMC Luanshya Copper Mines (CLM), which were put under care and maintenance during 2009, are now under new management and have resumed.



A dividend of US$6 million, representing a dividend per share of US$0.006 (K28.19), was proposed and paid during the period.



Copperbelt Energy Corporation Plc

Summary Statement of Comprehensive Income for the period ended 30th June 2010




Unaudited


Audited


Audited




6 Months


30-Jun-10


30-Jun-09


30-Jun-08


Jun-10 vs Jun-09




US $’000


US $’000


US $’000


(%) Change

Revenue


83,258


78,104


89,539


6.60%

Profit before interest and tax


11,333


7,313


9,853


55.0%

Net finance costs


(300)


(649)


(1,094)


-53.8%

Income tax expense


(3,861)


(2,332)


(3,066)


65.6%

Profit attributed to shareholders


7,172


4,331


5,693


65.6%















Earnings per share













Basic and diluted EPS


0.0072


0.0043


0.0057


65.6%

Source: http://www.cecinvestor.com



Looking forward, the company said t is committed to investing in projects that provide diversification of its traditional business of supplying power to the mines on the Copperbelt. It said construction of a new double circuit 220kV interconnector between Zambia and the DRC will commence during the year as a joint project between CEC and the DRC’s electricity utility, SNEL. The cost of the Zambian portion of the project is approximately US$16.5 million which will be borne by CEC.



The project is part of the Southern African Power Market Plan being supported by the World Bank, and will facilitate increased power trading within the SAPP. This line will facilitate the transfer of 550MW firm power from DRC to Zambia. Construction and commissioning are set to be complete by the Q3, 2011.



CEC said the feasibility study for Kabompo Gorge Hydro project is complete, and project development activities are now being undertaken. The final report has recommended that the project is viable and 40MW of capacity is recommended. A total of US$2.0 million has been spent to date on feasibility study costs to date (US$0.6 million has been spent in the 6 months period to June 30, 2010). The detailed site design, tendering and financing process for the project has commenced - http://www.cecinvestor.com; Daily Mail, Monday August 30, Pg 11.