PRESS RELEASE

from ZCCM (EPA:MLZAM)

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 PLC100.00%
Ndola Lime Company Limited (In liquidation)100.00%
Kariba Minerals Limited100.00%
Misenge Environmental and Technical Services Limited100.00%
Mushe Milling Limited (In liquidation)100.00%
Kabundi Resources Limited100.00%
Limestone Resources Limited100.00%
Investrust Bank PLC (In possession by the Bank of Zambia))71.40%
Zambia Gold Company Limited51.00%

The Company also has other interests in the undernoted companies:
NameShareholding
Rembrandt Properties49.00%
Central African Cement Limited49.00%
Maamba Collieries Limited35.00%
Copperbelt Energy Corporation PLC31.07%
Konkola Copper Mines PLC20.60%
Kansanshi Mining PLC20.00%
CNMC Luanshya Copper Mines PLC20.00%
Lubambe Copper Mines PLC20.00%
Mingomba Mining Limited20.00%
NFCA Africa Mining PLC15.00%
Chibuluma Mines PLC15.00%
Chambishi Metals PLC15.00%
Copper Tree Mineral Limited15.58%
Oranto Petroleum Limited10.00%
Nkana Alloy Smelting Company Limited10.00%

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'0002023 2022
Revenue1 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 Plc2023 2022
 ZMW'000 ZMW'000
Property, plant, and equipment, including intangible assets 15,646,610  15,384,497
Inventories3,489,128 4,836,680
Trade and other receivables2,691,333 2,616,620
Environmental protection fund147,553 94,433
Cash and cash equivalents58,367 159,584
Total assets22,032,991 23 ,091,8 14
    
Equity and liabilities   
Capital and reserves (40,916,634) (14,981,992)
Borrowings43,518,156  28,341,270
Trade and other payables15,072,870 7,934,977
Bank overdraft1,095,462 678,900
Provisions for environmental rehabilitation3,263,137 1,118,659
Total equity and liabilities22,032,991 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
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