ZCCM-IH posted reduced profits after tax of K462 million during its financial year ending March 31, 2019, triggered by increased losses incurred at subsidiaries Investrust Bank Plc and Ndola Lime Cement Company.
ZCCM-IH, however, says the outlook is positive in view of several investments made last year that are bound to yield results in the medium to long term.
According to an unaudited statement for the financial year ending March 31, 2019, ZCCM-IH posted lower profit after tax of K462 million, compared to K843 million earned in the previous corresponding period in 2018, on account of losses incurred by Investrust and Ndola Lime, representing a 45 per cent decline on the previous year.
“Despite the Group reporting a profit for the year of ZMW462 million, there was a decline of 45 per cent compared to last year mainly due to recorded losses from Ndola Lime Company Limited, and Investrust Bank Plc amounting ZMW246 million (2018: ZMW190 million) and ZMW79 million (2018: no comparison applicable as Investrust was not a subsidiary then), respectively,” ZCCM-IH stated.
“The Group reported a profit for the year of ZMW462 million (2018: ZMW843 million), mainly due to the following: increase in net finance income from a net finance cost of ZMW132.49 million recorded in 2018 to a net finance income of ZMW63.55 in recorded in 2019; and increase in share of profit from equity accounted investee companies from ZMW689 million recorded in 2018 to ZMW973 million recorded in 2019, mainly on account of improved performance of Kansanshi Mining Plc and Maamba Collieries Limited whose combined share of profit accounted for 84 per cent of the recorded amount for the year.”
But the Group expressed optimism in its outlook in view of the new acquisitions made.
In addition to Investrust, of which ZCCM-IH now has a 71.4 per cent stake, two other acquisitions were made in its financial year.
“On 9th November, 2018, ZCCM-IH and Gemfields signed a Share Purchase Agreement for ZCCM-IH to purchase the additional 50% stake in Kariba Minerals Limited (KML). This acquisition has resulted in ZCCM-IH owning 100 per cent of KML. In March, 2019, the ZCCM-IH Board resolved to incorporate a Special Purpose Vehicle, Kabundi Resources Limited (KRL) a wholly-owned subsidiary located in Chief Muchinda’s area in Serenje District, Central Province. KRL is a mining operating company whose main activities include mining, processing and marketing of manganese and other non-ferrous metals. Looking into the future, the Group will continue to execute the 2018-2023 strategy to reduce dependence on dividend income streams, which historically have been unstable and inconsistent. The significant developments highlighted above are expected to have a positive impact on the group’s performance in the medium to long-term,” stated ZCCM-IH.