ZCCM-IH yesterday paid a dividend of K81.4 million to the Industrial Development Corporation (IDC) following a successful financial year where the former generated profits of K729 million.
The holdings company increased its dividend policy to 35 per cent of net profit after tax from 20 per cent as part of its strategic plan for the next five years following a substantial increase in copper prices.
Speaking during the cheque-signing ceremony in Lusaka, ZCCM-IH chief executive officer Dr Pius Kasolo said the dividend had demonstrated ZCCM-IH’s profitability, making it one of the best-performing entities falling under the IDC group.
“We are putting a smile on IDC’s faces today! As you all know, ZCCM-IH made a profit of K720 million; I think it is one of the biggest profit-making [entities] in the IDC group. And, as such, we have to give 35 per cent dividends of that. IDC owns 60 per cent of the shares of ZCCM-IH, so you are getting 60 per cent of that dividend we are declaring, and the total dividend being declared is K135 million,” Dr Kasolo said at the IDC’s head offices on Independence Avenue.
“So, there’s a lot from your 60.28 per cent, there’s a lot of K81.4 million being paid to IDC today. And, of course, ZCCM-IH is proud to say that, we have turned the company around, and as you can see, we are the biggest dividend payer in the IDC group.”
And IDC group executive director Mateyo Kaluba expressed delight at receiving what is ZCCM-IH’s first dividend paid since the former’s establishment in 2014.
“This is a happy day for us! ZCCM-IH is one of the largest companies in the IDC portfolio, and it’s very important for us, as IDC that, companies in the group perform, especially the large companies; they must lead the way,” Kaluba said.
“One of the most important aspects of ZCCM-IH is that it is listed on the [Lusaka] Stock Exchange. It is important that companies that have led the way in terms of listing can demonstrate to the public, to other companies in the group that, they can perform while listed on the stock exchange.”
He further indicated that the funds would be utilised for projects around the country.
“IDC is wholly-dependent on dividends that come from companies in the group. It is from these funds that we are able to invest in new projects; whether we are talking about value-addition in Eastern Province, in Western, North-Western Province, it is the dividends that come from the portfolio, which we are able to divert towards these important national causes. So, CEO [Dr Kasolo], I am looking forward to the next dividend and the next dividend,” said Kaluba, amidst rapturous laughter from the audience.
“This is probably the best performance in terms of dividend declaration on the stock exchange and it is important for us that this has been done by a company in which the State has shareholding.”
According to ZCCM-IH’s results for the financial year ending March 31, 2017, ZCCM-IH posted a massive profit after tax of K729 million, turning around from incurring enormous losses of almost K3 billion in the previous corresponding period in 2016.
Data further showed that the group’s share of losses from equity-accounted investee companies significantly reduced by 91 per cent from K2.2 billion in 2016 to K189 million in 2017 owing to investee companies improved performance.