ZCCM IH profit up by 18pct during the 6 months of 2011

[bingogo]

Saturday, 16 Jul 2011

Zambia Consolidated Copper Mines Investment Holdings Group profit rose 18% higher during the 6 months ending March 31st 2011 as sales from some subsidiaries surged.

The group, known as ZCCM IH, in its report for the period stated that it retained profit of ZMK 355,435 million compared to ZMK 54,788 million retained during the same period a year earlier. The retained profit was chiefly on account of a favorable exchange rate which provided an exchange gain of ZMK 13,545 million a drop in interest charges and an increase in share of profits of Associate Companies.

The group’s turnover rose 43% during the 6 months ending March 31 this year as the mining organization. ZCCM IH increased its turnover to ZMK 147,762 million by the end of the period March 31st 2011 compared to ZMK 103,106 million realized for the 6 months ending March 31 a year earlier.

Mr Chabby Chabala secretary of ZCCM IH attributed the rise to increase in turnover from one of its subsidiaries, Ndola Lime Company. The turnover of ZMK 110,286 million for the neutralizing agent, Ndola Lime Company for the period ended March 31st 2011 was 39% higher than ZMK 79,615 million during the same period earlier.

The increase was attributable to an increase in selling prices of Lime products effected during the month of February 2011 and an increase in sales which was made possible as a result of both the rotary kiln and the vertical kiln being operational during the period under review. The increase in exports of Lime products to Democratic Republic of Congo also spurred the rise in sales during the period.

The mining group, known as ZCCM IH’s income amounting to ZMK 24, 086 million was earned in December 2010. The money was enshrined in the transaction agreements between ZCCM-IH and TEAL Minerals Limited. The trigger for the payment was the development decision by TEAL to proceed with the Mine Development Program of the Konkola North Copper Project.

The proceeds from this investment disposal contributed to the increase in turnover. During the period, ZCCM-IH exercised its option to take up 20% equity in KONNOCO as provided for under the transaction agreements.

2010 ZCCM-IH Plc divested 65% of the Maamba Collieries Limited shares to Nava Bharat Singapore (Pte) Limited which consequently, the consolidated accounts to March 31st 2011 reflect the coal producer as an Associate Company whilst the comparative figures for the period to March 31st 2010 reflect MCL as a Subsidiary Company.

Dividends of ZMK 4,414 million was received from Chibuluma Mines Plc during the period. In addition interest earned from placements and fixed deposits during the period amounted to ZMK 3,979 million where as management fees of ZMK 961 million were earned from Government relating to the Copperbelt Environment Project implementation which also contributed to the increase in turnover.

The cost of turnover increased to K92, 912 million for the period to March 31st 2011 from ZMK 82,140 million for the corresponding period to March 31st 2010. This was on account of an increase in NLC cost of sales of ZMK 18 716 million attributed to the use of both the rotary kiln and the vertical kiln. This increase in price of Heavy Fuel Oils during the period also resulted in increased cost of turnover.

Incidentally, the increase in the cost of turnover was favorably impacted by the divestment of Maamba Collieries. The divestment resulted in a reduction in cost of turnover of ZMK 9,115 million for the period ending March 31st 2011. The operating profit for the period under review of ZMK 54,850 million was ZMK 33,884 million representing growth of 161 higher than that for the same period in 2010. This was attributable to the increase in turnover for the period under review.

The Company's share of profit from Associate Companies for the period under review was ZMK 322,944 million compared to ZMK 297,712 million for the period to March 31st 2010 and improvement was because of the general increase in activity in the Mining industry.

And ZCCM IH, stated that further to the Cautionary Statement issued to shareholders on 6 May 2011, decided to accept the offer by Canadian based Barrick Gold Corporation to purchase all outstanding common shares of Equinox Minerals Limited. This action was by way of a negotiated take-over bid. Equinox Minerals owns 100 percent shares in Lumwana Mining Company Limited, its subsidiary operating in Zambia.

The offer by Barrick Gold had resulted in a cash realization of about USD 160 million while the initial investment for ZCCM-IH cost USD 30 million in 2006. This therefore created potential return on investment is in excess of 400 percent during the period 2006 to 2011. ZCCM IH was optimistic that the offer by Barrick Gold to all shareholders of Equinox was an opportunity for the group to realize value from its investment.

Equinox Minerals Limited, an internationally reputed mining company is dual listed in Canada and Australia on the Toronto Stock Exchange and the Australian Securities Exchange. Equinox has 100% interest in Lumwana Mining Company and 100% equity in the Jabal Sayid copper and gold project in the Kingdom of Saudi Arabia. According to data, Barrick Gold Corporation is the leading gold mining company in the world in terms of production, reserves and market capitalization.

[mgauthi4]

NEWS ! ZCCM IH rose 82pct for the 9 months ending September 30 2010

ZCCM IH rose 82pct for the 9 months ending September 30 2010
Sunday, 17 Jul 2011
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Zambia Consolidated Copper Mines Investment Holdings group’s turnover rose 82% for the nine months ending September 30th 2010 as share of profit from associate companies increased.

The group, known as ZCCM IH overseeing the privatization of the mining conglomerate into single units, achieved a turnover of ZMK 252,566 million during the 9 month compared to ZMK 138,978 million a year earlier.

According to an unaudited report for the period ending September 30 availed to shareholders, the increase in turnover was attributed to dividends of ZMK 107, 580 million the group received during the period under review compared to ZMK 29,623 million a year earlier.

Mr Chabby Chabala Company Secretary stated that the dividends were inclusive of a special dividend paid out by First Quantum owned Kansanshi Mining Plc in Zambia of ZMK 86,173 million compared to a deficit of USD 18.1 million for the years 2007 to 2009. Interim dividends of ZMK 9,349 million from Copperbelt Energy Corporation provider of electricity to the copperbelt based mines in Zambia with ZMK 9,349 million received from KMP and ZMK 2,579 million from China’s Non Ferrous Corporation Africa.

The unaudited accounts released by ZCCM IH group are an obligation as required by the Securities Act, Cap 354 of the Laws of Zambia and the Listing Rules of the Lusaka Stock Exchange where its shares are quoted. Additionally, Zambia’s leading producer of the neutralizer chiefly used by the mines in copper production, Ndola Lime Company’s turnover of ZMK 139,314 million during the period ended September 30th 2010 rose 39% higher than ZMK 100,238 million realized a year earlier.

This achievement was on account of an increase in exports of the product to Democratic Republic of Congo during the period. Further, an increase in selling price of lime products as of June 2010 lead to account for the increase in the cost of production such as fuel and electricity costs as well as inflation which also contributed to increased gross earnings for the group. The cost of turnover for the group increased to ZMK 146,661 million during the nine months ending September 30th last year for the period to September 30th 2010 from ZMK 137,920 million recorded a year earlier.

The higher cost of turn over was largely because of an increase in Ndola Lime Company cost of sales of ZMK 32,233 million attributable to the use of the rotary kiln which uses twice the amount of Heavy Fuel Oil as compared to the vertical kiln. However, ZCCM-IH's cost of turnover reduced to ZMK 20,134 million for the period to September 30th 2010 from ZMK 28,321 million for the period to September 2009.

This was mainly on account of a change in the provision of permanent employee benefits that were undertaken in the period to September 30th 2009. Maamba Collieries Limited’s cost of turnover only accounts for ZMK 15,525 million for the period to September 30th 2010 compared to ZMK 30,831 million a year earlier. However, ZMK 30,831 related to a nine months period where as ZMK 15,525 related to approximately four months.

The Company's share of profit from associate companies for the period September 30th 2010 was ZMK 500,037 million compared to ZMK 125,311 million for the period to September 30th 2009 on account of operational improvements by some associate companies and the general increase in activity in the mining industry.

The Group’s operating profit for the period to September 30th 2010 rose to ZMK 105,905 million compared to ZMK 1,058 million a year earlier and this on account of the increase in turnover for this period. The share of profits as well as the depreciation of the Kwacha against the United States Dollar during the period under review gave the group a retained profit of ZMK 545,029 million compared to ZMK 103,942 million for the period to September 2009.

Exchange movements were attributable to the Kwacha depreciating against the USD from ZMK 4,651.88 as of January 1st 2010 to ZMK 4,850.00 recorded by September 30th 2010. This resulted in an exchange loss of ZMK 42,776 million for the period to September 30th 2010 compared to an exchange loss of ZMK 1,089 million during a year earlier.

Meanwhile, ZCCM IH Plc appointed Mr Mukela Mutunda as the new Chief Executive Officer of the Company effective February 8th 2011 replacing Mr William Musama in accordance with the Securities Act, Cap 354 of the laws of the country.

Mr Muyunda previously served as chief executive officer for the country’s leading fixed telephone provider, the Zambia Telecommunications Company Limited known as ZAMTEL. He earlier served as Director of Finance for ZAMTEL as well as Director of Finance and Corporate Services for the Zambia Wildlife Authority and Finance Manager for Zambia Sugar Plc, the leading producer of the sweetener.

(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)