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  ZCCM company press release from 07/06/2024 - ZCCM-IH 2023 ABRIDGED AUDITED FINANCIAL RESULTS_31.12.2023

  07/06/2024 - 09:10

ZCCM-IH 2023 ABRIDGED AUDITED FINANCIAL RESULTS_31.12.2023


SENS ANNOUNCEMENT

(the “Notice” or “Announcement”)

ISSUER

ZCCM INVESTMENTS HOLDINGS PLC (“ZCCM-IH”)

[Incorporated in the Republic of Zambia]

Company registration number: 119540000771

Share Code: ZCCM-IH

ISIN: ZM0000000037

Authorized by: Charles Mjumphi – Company Secretary

SPONSOR

Stockbrokers Zambia Limited

[Founder Member of the Lusaka Securities Exchange]

[Regulated and licensed by the Securities and Exchange Commission of Zambia]

Contact Number: +260-211-232456

Website: www.sbz.com.zm

APPROVAL

The captioned Notice or Announcement has been approved by:

  1. the Lusaka Securities Exchange (“LuSE”)
  2. the Securities and Exchange Commission (“SEC”)
  3. ZCCM Investment Holdings Plc (“ZCCM-IH”)

RISK WARNING

The Notice or Announcement contained herein contains information that may be of a price sensitive nature.

Investors are advised to seek the advice of their investment advisor, stockbroker, or any professional duly licensed by the Securities and Exchange Commission of Zambia to provide securities advice.

ISSUED: 7 June 2024

ZCCM INVESTMENTS HOLDINGS PLC

[Incorporated in the Republic of Zambia]

Company registration number: 771

Share Code: ZCCM-IH

ISIN: ZM0000000037

[“ZCCM-IH” or “the Company”]

ABRIDGED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

INTRODUCTION

In compliance with the requirements of the Securities Act No. 41 of 2016, ZCCM Investments Holdings PLC (“ZCCM-IH PLC” or “the Company”) announces the financial statements results of the Company and its subsidiaries (Collectively referred to as the ‘‘the Group'') for the year ended 31 December 2023.

STRUCTURE OF THE ZCCM-IH GROUP

The ZCCM-IH Group consists of the following Nine (9) companies:
Name
Shareholding
Mopani Copper Mine PLC 100.00%
Ndola Lime Company Limited (In liquidation) 100.00%
Kariba Minerals Limited 100.00%
Misenge Environmental and Technical Services Limited 100.00%
Mushe Milling Limited (In liquidation) 100.00%
Kabundi Resources Limited 100.00%
Limestone Resources Limited 100.00%
Investrust Bank PLC (In possession by the Bank of Zambia)) 71.40%
Zambia Gold Company Limited 51.00%

The Company also has other interests in the undernoted companies:
Name Shareholding
Rembrandt Properties 49.00%
Central African Cement Limited 49.00%
Maamba Collieries Limited 35.00%
Copperbelt Energy Corporation PLC 31.07%
Konkola Copper Mines PLC 20.60%
Kansanshi Mining PLC 20.00%
CNMC Luanshya Copper Mines PLC 20.00%
Lubambe Copper Mines PLC 20.00%
Mingomba Mining Limited 20.00%
NFCA Africa Mining PLC 15.00%
Chibuluma Mines PLC 15.00%
Chambishi Metals PLC 15.00%
Copper Tree Mineral Limited 15.58%
Oranto Petroleum Limited 10.00%
Nkana Alloy Smelting Company Limited 10.00%

ABRIDGED GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
    Audited   Audited
    31 Dec
2023
  31 Dec
2022
    ZMW'000   ZMW'000
         
Revenue  
11,747,105
 
11,920,429
Gross loss   (3,559,228)   (2,749,922
Operating loss   (2,104,964)   (3,314,561)
Net finance cost   (2,267,838)   (1,807,093)
Share of profit of equity accounted investees   2,261,209   1,603,143
Loss before tax   (2,111,593)   (3,518,511)
Income tax expense   (1,206,049)   (248,019)
Loss for the year from continuous operations   (3,317,642)   (3,766,530
         
Loss from discontinued operations   (758,181)   (19,003)
Loss for the year   (4,075,823)   (3,785,533)
Earnings per share (ZMW)   (25.35)    (23.54)
Basic and diluted earnings per share (ZMW)   (25.35)   (23.54)

ABRIDGED COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
    Audited   Audited
    31 Dec
2023
  31 Dec
2022
    ZMW'000   ZMW'000
         
Investment income   2,128,699   4,916,309
Revenue from contracts with customers   23,180   778
Operating profit   3,067,198   4,054,286
Net finance income   2,979,315   440,763
Profit before tax   6,046,513    4,495,049
Income tax expense   (1,205,034)   (236,321)
Profit for the year   4,841,479   4,258,728
         
Earnings per share (ZMW)   30.11   26.48
Basic and diluted earnings per share (ZMW)   30.11   26.48

ABRIDGED GROUP STATEMENT OF FINANCIAL POSITION
    Audited   Audited
    31 Dec 2023   31 Dec 2022
    ZMW'000   ZMW'000
Assets        
Property, plant, and equipment   248,857   12,484,907
Exploration and evaluation asset   51,437   51,437
Intangible assets   14,393,945   3,148,325
Investment property   208,598   200,751
Investments in associates   10,090,940   15,174,862
Financial assets at fair value through profit or loss   3,019,500   1,252,400
Trade and other receivables   1,628,837   2,931,539
Environmental Protection Fund   7,060   94,433
Deferred tax assets   -   122,852
Inventories   38,299   4,921,366
Trade and other receivables   339,169   762,831
Assets classified as held for sale   23,626,388   2,103,761
Term deposits   4,450,451   5,340,202
Cash and cash equivalents   360,356   329,173
Total assets   58,463,837   48,918,839
 
Equity and liabilities
       
Capital and reserves   (5,690,634)   7,908,807
Borrowings   -   27,476,859
Deferred tax liability   751,833   -
Retirement benefits   17,381   182,940
Provisions for environmental rehabilitation   112,751   1,221,068
Borrowings   -   864,411
Overdraft   -   688,120
Trade and other payables   312,756   7,451,177
Provisions   44,243   487,689
Current income tax liabilities   238,553   190,143
Retirement benefits   -   139,131
Liabilities associated with assets classified as held for sale   62,676,954   2,308,494
Total equity and liabilities   58,463,837   48,918,839
         
ABRIDGED COMPANY STATEMENT OF FINANCIAL POSITION
    Audited   Audited
    31 Dec 2023   31 Dec 2022
Assets   ZMW'000   ZMW'000
         
Property, plant, and equipment   110,624   90,471
Intangible assets   14,260,690   3,377
Investment property   208,598   200,751
Investment in subsidiaries   282,384   405,051
Investments in associates   11,240,080   16,256,411
Financial assets at fair value through profit or loss   3,019,500   1,252,400
Trade and other receivables   4,586,471   958,162
Deferred tax assets   -   258,966
Inventories   -   16,427
Trade and other receivables   288,268   173,829
Term deposits   4,411,330   5,340,202
Cash and cash equivalents   61,137   45,586
Assets classified as held for sale   -   145,700
Total assets   38,469,082   25,147,333
 
Equity and liabilities
       
Capital and reserves   37,422,019   24,679,852
Deferred tax liability   618,059   -
Retirement Benefit Obligations   17,381   9,275
Provisions for environmental rehabilitation   54,498   39,357
Borrowings   -   -
Trade and other payables   78,288   121,005
Provisions   41,461   108,686
Current income tax liabilities   237,376   189,158
Total equity and liabilities   38,469,082   25,147,333
         
ABRIDGED GROUP STATEMENT OF CASH FLOWS
    Audited   Audited
    31 Dec 2023   31 Dec 2022
    ZMW'000   ZMW'000
         
Net cash flow generated from operating activities   (83,727)   1,463,062
Net cash flow used from investing activities   533,274   (1,113,001)
Net cash outflow from financing activities   (207,812)   (698,833)
Decrease in cash and cash equivalents   241,735    (348,772)
Effects of translation and exchange rate changes on cash and cash equivalents   (277,193)   (68,389)
Cash and cash equivalents at the beginning of the year   (81,060)   336,101
    (116,518)   (81,060)
Included in the statement of financial position   360,356   (358,947)
Included in assets held for sale   (476,874)   277,887
    (116,518)   (81,060)

ABRIDGED COMPANY STATEMENT OF CASH FLOWS
    Audited   Audited
    31 Dec 2023   31 Dec 2022
    ZMW'000   ZMW'000
         
Net cash flows from operating activities   (368,710)   4,766,330
Net cash flows used in investing activities   379,990   (4,761,256)
Net cash flows used in financing activities   -   (1,135)
Decreased in cash and cash equivalents   11,280   3,939
Effect of movement in exchange rates on cash held   4,271   (39,851)
Cash and cash equivalents at the beginning of the year   45,586   81,498
Cash and cash equivalents at the end of the period   61,137   45,586

ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY

    Audited   Audited
    31 Dec 2023   31 Dec 2022
    ZMW'000   ZMW'000
Balance at 1 Jan   7,908,807   12,808,905
Loss for the year   (4,075,823)   (3,785,533)
Other comprehensive income   (8,700,010)   (1,029,340)
Dividend paid   (723,608)   (85,225)
Balance at 31 Dec   (5,590,634)   7,908,807
 

ABRIDGED COMPANY STATEMENT OF CHANGES IN EQUITY

    Audited   Audited
    31 Dec
2023
  31 Dec
2022
    ZMW'000   ZMW'000
         
Balance at 1 Jan   24,679,852   24,732,194
Profit for the year   4,841,479   4,258,728
Other comprehensive income   8,624,296   (3,225,845)
Dividend paid   (723,608)   (85,225)
Balance at 31 Dec   37,422,019   24,679,852
           
  1. FINANCIAL PERFORMANCE

In 2023, the Group faced financial challenges, with post-tax losses increasing from ZMW3,786 million (US$222.03 million) in 2022 to ZMW4,076 million (US$198.59 million). This was primarily due to the underperformance of Mopani Copper Mine Plc, which reported a significant loss of ZMW8.97 billion (US$436.94 million). Mopani's lower copper production and operational issues were key contributors to this decline.

Despite these difficulties, the Group's total assets grew from ZMW48.92 billion (US$2.81 billion) in 2022 to ZMW58.46 billion (US$2.30 billion) in 2023, though the value in US Dollars decreased due to currency depreciation. Liabilities also increased significantly, primarily due to the interest accrued on Mopani's loan from Glencore and the resulting foreign exchange losses.

Retained earnings were in a deficit of ZMW16.462 billion (US$639.40 million) by the end of 2023, worsening from the previous year's deficit of ZMW11.44 billion (US$561.56 million).

However, the Company itself reported an increase in profits, rising to ZMW4.84 billion (US$235.90 million) in 2023 from ZMW4.25 billion (US$249.78 million) in 2022, demonstrating resilience amidst broader financial challenges within the ZCCM-IH Group.

  1. KEY OPERATIONS AND STRATEGIC DEVELOPMENTS
    1. Mopani Copper Mines PLC (“MCM”)

Below is a summary of Mopani's financial performance which has been incorporated in the Groups Financial Statements:

  Statement of Profit and Loss and Other Comprehensive - Mopani Copper Mine Plc
ZMW'000 2023   2022
Revenue 1 1 ,552,419   1 1 , 854 , 038
Gross loss (3,532,408)   (2,711,461)
Operating loss (4,351,218)   ( 2,814 ,464)
Net finance cost (4,616,657)   (2,238,476)
Loss before tax (8,967,875)    ( 5 , 052,940 )
Loss for the year (8,967,875)    ( 5 , 052,940 )
         

Statement of Financial Position - Mopani Copper Mine Plc 2023   2022
  ZMW'000   ZMW'000
Property, plant, and equipment, including intangible assets  15,646,610    15,384,497
Inventories 3,489,128   4,836,680
Trade and other receivables 2,691,333   2,616,620
Environmental protection fund 147,553   94,433
Cash and cash equivalents 58,367   159,584
Total assets 22,032,991   23 ,091,8 14
       
Equity and liabilities      
Capital and reserves  (40,916,634)   (14,981,992)
Borrowings 43,518,156    28,341,270
Trade and other payables 15,072,870   7,934,977
Bank overdraft 1,095,462   678,900
Provisions for environmental rehabilitation 3,263,137   1,118,659
Total equity and liabilities 22,032,991   23 ,091,8 14

Mopani Copper Mines plc (MCM) recorded a significant loss of ZMW 8.9 billion (US$436.94 million) in 2023, up from ZMW 5.05 billion (US$296.36 million) the previous year. This was due to decreased copper production, low equipment availability, delayed development, and multiple plant outages. In response, US$35 million was invested in sustaining and expanding projects, with full commissioning of expansion projects expected by 2027. In March 2024, a strategic investment of US$1.2 billion by International Resources Holding Limited (IRH), through its wholly-owned subsidiary Delta Mining Limited, was approved to enhance Mopani's financial and operational resilience.

    1. Kansanshi Royalty Right

ZCCM-IH converted its 20% dividend rights in Kansanshi Mining Plc into a 3.1% life-of-mine royalty right, resulting in royalty income and VAT refunds totalling ZMW1.2 billion (US$58.48 million) and ZMW170.74 million (US$8.32 million), respectively.

    1. Copperbelt Energy Corporation Plc (CEC)

ZCCM-IH increased its shareholding in Copperbelt Energy Corporation Plc (CEC) from 24.1% to 31.07%, driven by confidence in CEC's growth prospects, particularly in renewable energy.

    1. Konkola Copper Mines Plc (KCM)

ZCCM-IH and Vedanta Resources Group have resolved their disputes by entering into a settlement agreement aimed at resetting their relationship. The necessary steps to withdraw the proceedings related to these disputes are currently being undertaken.

    1. Mingomba Mining Limited (MML)

Mingomba Mining Limited, a new partnership formed in 2023, is conducting a drilling program using Artificial Intelligence (AI) techniques in Chililabombwe. This will expedite orebody definition and subsequent mine development.

    1. Investrust Bank Plc

ZCCM-IH holds a 71.4% stake in Investrust Bank Plc. The Bank of Zambia announced a takeover of Investrust on 2 April 2024, and trading of its shares was suspended. ZCCM-IH is monitoring the situation.

  1. Outlook

ZCCM-IH remains focused on mining and mining-related investments, seeking partnerships that benefit the Zambian people and positioning itself to capitalize on opportunities in the mining sector.

By Order of the Board

Charles Mjumphi

Company Secretary

Issued in Lusaka, Zambia on 7 June 2024

Lusaka Securities Exchange Sponsoring Broker
  T | +260-211-232456

E | advisory@sbz.com.zm

W | www.sbz.com.zm

Stockbrokers Zambia Limited (SBZ) is a member of the Lusaka Securities
Exchange and is regulated by the Securities and Exchange Commission of Zambia

First Issued on 7 June 2024

APPENDICES

US DOLLAR ABRIDGED GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

         
    31 Dec
2023
  31 Dec
2022
         
    US$'000   US$'000
Revenue  
572,356
 
 699,145
Gross loss   (173,416)   (161,286)
Operating loss   (102,559)   (194,403)
Net finance income   (110,497)   (105,988)
Share of profit of equity accounted investees   110,173   94,026
Loss before tax   (102,883)   (206,365)
Income tax expenses   (58,762)   (14,547)
Loss from continuing operations   (161,645)   (220,912)
         
Loss from discontinued operations   (36,941)   (1,115)
Loss for the year   (198,586)   (222,027)
Earnings per share (US$)   (1.23)   (1.38)
Basic and diluted earnings per share (US$)   (1.23)   (1.38)

US DOLLAR ABRIDGED COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
         
    31 Dec
2023
  31 Dec
2022
    US$'000   US$'000
Investment income   103,717   288,347
Revenue from contracts with customers   1,129   46
Operating profit   149,444   237,788
Net finance income   145,162   25,851
Profit before tax   294,606   263,639
Income tax expenses   (58,713)   (13,860)
Profit for the year   235,893   249,779
         
Earnings per share (US$)   1.47   1.55
Basic and diluted earnings per share (US$)   1.47   1.55

US DOLLAR ABRIDGED GROUP STATEMENT OF FINANCIAL POSITION
         
    31 Dec 2023   31 Dec 2022
    US$'000   US$'000
Assets        
Property, plant, and equipment   9,666   756,962
Exploration and evaluation asset   1,998   2,767
Intangible assets   559,064   189,407
Investment property   8,102   11,120
Investments in associates   391,934   840,596
Financial assets at fair value through profit or loss   117,278   69,375
Trade and other receivables   63,264   162,390
Environmental Protection Fund   274   5,231
Deferred tax assets   -   6,805
Inventories   1,488   295,855
Trade and other receivables   13,173   42,256
Term deposits   172,857   295,815
Cash and cash equivalents   13,996   18,234
Assets classified as held for sale   917,654   116,536
Total assets   2,270,748   2,813,349
 
Equity and liabilities
       
Capital and reserves   (221,028)   541,639
Borrowings   -   1,522,053
Deferred tax liabilities   29,201   -
Retirement benefits   675   10,134
Provisions for environmental rehabilitation   4,379   67,640
Bank overdraft   -   38,118
Borrowings   -   47,883
Trade and other payables   12,148   412,750
Provisions   1,721   27,015
Current tax liabilities   9,265   10,533
Retirement benefits   -   7,707
Liabilities directly associated with assets classified as held for sale   2,434,387   127,877
Total equity and liabilities   2,270,748   2,813,349

*The Statement of Financial Position has been translated using the rate of K25.75/US$.


US DOLLAR ABRIDGED COMPANY STATEMENT OF FINANCIAL POSITION
         
    31 Dec 2023   31 Dec 2022
    US$'000   US$'000
Assets        
Property, plant, and equipment   4,297   7,408
Intangible assets   553,888   198
Investment property   8,102   11,120
Investments in subsidiaries   10,968   22,437
Investments in associates   436,567   900,507
Financial assets at fair value through profit or loss   117,278   69,375
Trade and other receivables   178,140   53,076
Deferred tax assets   -   14,345
Inventory   -   830
Trade and other receivables   11,196   9,629
Term deposits   171,337   295,815
Cash and cash equivalents   2,375   2,525
Assets classified as held for sale   -   8,071
Total assets   1,494,148   1,395,336
         
Equity and liabilities        
Capital and reserves   1,453,479   1,369,440
Deferred tax assets   24,006   -
Retirement benefits   675   514
Provisions for environmental rehabilitation   2,117   2,180
Trade and other payables   3,041   6,703
Provisions   1,610   6,021
Current tax liabilities   9,220   10,478
Total equity and liabilities   1,494,148   1,395,336

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  Original Source: ZCCM