SALES REVENUES
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Sales revenues (after realization
charges) Q4 2011 Q4 2010 2011 2010
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Kansanshi - copper 368.4 463.2 1,909.3 1,538.4
- gold 37.3 33.1 139.0 115.5
Guelb Moghrein - copper 66.2 69.2 244.4 192.7
- gold 31.0 25.9 101.8 81.7
Corporate 64.4 61.5 174.8 143.2
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Sales revenues from continuing
operations 567.3 652.9 2,569.3 2,071.5
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Frontier - copper - 51.2 13.5 270.0
Bwana/Lonshi - copper - 3.7 0.7 51.7
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Sales revenues 567.3 707.8 2,583.5 2,393.2
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COPPER SELLING PRICE USD/lb USD/lb USD/lb USD/lb
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Average LME cash price 3.40 3.92 4.00 3.42
Realized copper price 3.33 3.73 3.87 3.25
Treatment charges/refining charges
("TC/RC") and freight charges (0.32) (0.25) (0.27) (0.27)
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Net realized copper price 3.01 3.48 3.60 2.98
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Full year 2011 sales revenues from continuing operations were 24% higher than 2010 due primarily to a 21% increase in the net realized copper price in the current year. Gold revenues increased by 22% from 2010 to $240.8 million due to the higher realized gold price in 2011.
Q4 2011 total sales revenues from continuing operations were 13% lower than the prior year period due to a 14% decrease in the net realized copper price and lower sales volumes. Q4 realization charges increased with the proportion of sales from Guelb Moghrein which incur higher freight and TC/RC charges. Gold revenues increased by 16% from Q4 2010 to $68.3 million due to the higher realized gold price in Q4 2011.
The Company's revenues are recognized at provisional prices when title passes to the customer. Any subsequent adjustments for final pricing are materially offset by derivative adjustments and shown on a net basis in cost of sales (see "Hedging Program" for further discussion). The Company's 2011 realized copper price per pound of contained copper is lower than the average LME cash price due to the impact of the smelter payable copper deduction on copper in concentrates of approximately 3.5%.
SUMMARY FINANCIAL RESULTS
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Q4 2011 Q4 2010 2011 2010
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Gross profit
Kansanshi 186.2 324.6 1,187.1 998.4
Guelb Moghrein 3.5 40.9 127.8 118.5
Other (4.3) (2.2) (3.8) (8.1)
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Gross profit from continuing
operations 185.4 363.3 1,311.1 1,108.8
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Frontier (2.7) 14.7 (3.6) 101.0
Bwana/Lonshi - (0.1) 0.5 1.9
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Total gross profit 182.7 377.9 1,308.0 1,211.7
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Exploration (19.7) (15.7) (73.0) (47.5)
General and administrative (15.8) (18.4) (73.8) (44.6)
Other income (expense) (3.8) (4.6) 7.3 1.8
Net finance costs (0.1) (3.8) (4.6) (18.6)
Acquisition transaction costs - - - (18.5)
Bond inducement costs - - (48.4) -
Gain on sale of investments - 510.8 - 510.8
Impairment of assets - 1.2 - (609.1)
Income taxes (49.5) (400.1) (460.7) (611.2)
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Net earnings for the period 93.8 447.3 654.8 374.8
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Net earnings for the period
attributable to:
Non-controlling interests 17.8 (7.4) 125.9 69.0 Shareholders of the Company 76.0 454.7 528.9 305.8
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Comparative earnings from continuing
operations 78.9 143.3 580.5 549.7
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Earnings per share (USD per share)
basic 0.16 1.12 1.18 0.76
diluted 0.16 1.01 1.18 0.69
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Comparative earnings per share from
continuing operations 0.17 0.35 1.30 1.37
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2011 cash flows from financing activities include dividend payments of $79.3 million made to common shareholders of the Company as well as dividends paid to non-controlling interests of $10.8 million. The bond inducement costs of $48.4 million and the final $80.7 million repayments of the $400 million term loan facility are also included in cash flows from financing activities.
Capital expenditure for property, plant and equipment was $1,108.7 million in 2011 comprising primarily of;
--
$332.1 million at Kansanshi for the oxide circuit expansion, mine fleet and mine pit development costs,
December 31, December 31, January 1,
Note 2011 2010 2012
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Assets
Current Assets
Cash and cash equivalents 25 452.1 1,344.9 919.2
Restricted cash 9 - 40.3 40.3
Trade and other receivables 238.1 377.0 342.6
Inventories 5 649.9 390.9 346.7
Current portion of other assets 8 34.0 26.7 195.2
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1,374.1 2,179.8 1,844.0
Investments 6 18.0 18.0 460.4
Property, plant and equipment 7 3,824.4 2,730.9 1,580.4
Deposits on property, plant and
equipment 59.2 - -
Other assets 8 22.3 29.2 89.9
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Total assets 5,298.0 4,957.9 3,974.7
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Liabilities
Current liabilities
Trade and other payables 273.4 362.2 323.0
Current taxes payable 289.4 414.0 320.8
Current portion of debt 9 48.1 140.8 84.5
Current portion of provisions
and other liabilities 11 11.0 48.3 3.9
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621.9 965.3 732.2
Debt 9 14.8 20.2 107.1
Convertible bonds 10 - 452.1 438.4
Provisions and other
liabilities 11 286.4 168.3 40.9
Deferred income tax liabilities 14 206.4 212.5 198.0
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Total liabilities 1,129.5 1,818.4 1,516.6
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Equity
Share capital 15 1,950.6 1,486.5 745.0
Retained earnings 1,723.8 1,274.2 1,024.5
Accumulated other comprehensive
income 1.2 1.0 297.2
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Total equity attributable to
shareholders of the Company 3.675.6 2,761.7 2,066.7
Non-controlling interests 492.9 377.8 391.4 le total des bénéfices non distribués, qui sont la part de ZCCM-IH est de 492.9 MILLION de US$ à fin décembre 2011.---------------------------------------------------------------------------
Total equity 4,168.5 3,139.5 2,458.1
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Total liabilities and equity 5,298.0 4,957.9 3,974.7
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-- Q4 2011 net earnings attributable to shareholders of the Company were
lower than Q4 2010 as the prior year included the gain on sale of
investments of $510.8 million offset partially
by a negative Zambian tax
adjustment of $210.7 million. Comparative earnings in Q4 2011 of $78.9
million were impacted by lower realized copper prices, lower sales
volumes and inflationary cost pressures.
Kansanshi expansions, Zambia
Construction commenced in 2011 at Kansanshi to expand annual copper production capacity from 250,000 tonnes to approximately 400,000 tonnes by 2015. The first phase of this increase relates to the expansion of the oxide/leach facilities which will be undertaken in two stages. Stage one is expected to increase annual production capacity to approximately 285,000 tonnes by expanding the oxide circuit throughput capacity to approximately 7.2 Mtpa by Q2 2012. This stage is progressing well with the relocation of equipment from the mothballed Bwana copper processing plant complete and installation and incorporation into the Kansanshi process underway. Stage two, scheduled for commissioning in 2013, is planned to increase the oxide circuit capacity to 14.5 Mtpa. Oxide copper production from these two projects will be restricted by acid supply. Acid supply will be addressed in the short-term with the commissioning of a fifth acid plant, and in 2014 with the construction of a copper smelter.
Construction of the fifth acid plant at Kansanshi has commenced with completion due in Q3 2012. This will provide enough acid to allow full use of the 7.2 Mtpa oxide leach expansion, and up to 10.0 Mtpa of the stage two expansion referred to above.
The second phase of the 400,000 tonne expansion project is a proposed expansion of the sulphide treatment facilities by construction of a new section of plant capable of treating 16 Mtpa of sulphide ore. Construction of this new plant may occur in two stages depending on ore grades. Project commitment is expected in mid-2012 following completion of the resource definition drilling program, essential for detailed mine planning.
Copper smelter project, Zambia
In Q4 2011, the copper smelter project was approved for construction at Kansanshi. Currently, Kansanshi's concentrate is treated primarily at smelters in Zambia, however, existing domestic smelting capacity will be insufficient to process the substantial increase in production resulting from the Kansanshi expansion and the Sentinel project. The smelter will be capable of processing 1.2 million tonnes of concentrate to produce over 300,000 tonnes of copper metal. The smelter will also produce over 3,000 tonnes per day of acid as a by-product at almost zero cost which will benefit Kansanshi by allowing the treatment of high acid-consuming oxide ores and the leaching of some mixed ores. The additional acid will also optimize the expansion of the oxide leach facilities and allow improved recoveries of leachable minerals in material now classified and treated as mixed ore.
Work on the project has commenced with key long lead equipment items tendered and commencement of detailed engineering design. Construction of the smelter is planned to be completed by mid-2014 followed by commissioning and ramp up.