ZCCM-IH has posted huge after tax profits of K438.9 million during its financial half-year ending June 30, 2020, triggered by increased income derived from exchange rate gains from the group’s foreign-denominated assets.

And ZCCM-IH says copper prices are expected to steadily increase on the back of solid recovery in Chinese demand for the red metal.

According to an unaudited statement for the financial half-year ending June 30, 2020, ZCCM-IH Group posted an increased profit of nearly K439 million, compared to K128.4 million by September 30, 2019, mainly boosted by higher income emanating from exchange rate gains.

“The Group reported a profit for the period of ZMW438.9 million (September 2019: ZMW128 million), mainly due to the following: Increase in net finance income from ZMW138.7 million recorded in September, 2019, to ZMW327.3 million recorded in June, 2020. The increase in finance income is due to exchange gains recorded on foreign denominated assets arising from the depreciation of the Zambian kwacha from an average of ZMW13.9 per US Dollar as at 30 September, 2019, to ZMW17.2 per US Dollar as at 30 June, 2020; increase in the Group’s share of profit in associate companies from ZMW154.8 million recorded in September, 2019, to ZMW354.7 million in June, 2020. This is mainly due to the increase in the profitability of some investee companies in the mining sector, such as Maamba Collieries Limited and Kansanshi Mining Plc,” ZCCM-IH stated in results released, Monday.

The exchange rate gains also boosted the group’s total asset portfolio, which substantially increased to over K20.2 billion from K14.5 billion last September.

“Group total assets increased by 40 per cent to ZMW 20,262 million in June, 2020, from ZMW14, 519 million in September 2019. This is mainly attributed to increase in values of investments in associates as a result of improved performance of Kansanshi Mining Plc, Maamba Collieries Limited and exchange gains arising from translation of US dollar denominated investments,” it stated.

And ZCCM-IH stated that copper prices were expected to steadily increase on the back of solid recovery in Chinese demand for copper.

Prices of the red metal peaked at around US $6,837 per metric tonne during the third quarter of this year, but dropped to around US $6,409 per tonne going into the final quarter.

“Copper prices are expected to increase steadily on the back of solid recovery in demand from China, the largest Copper consumer. In addition, low copper inventories in exchange warehouses, disrupted ore supplies from the top producing region in South America due to the COVID-19 pandemic and US dollar strengthening are contributing to the bullish outlook for copper,” stated ZCCM-IH.