ZCCM Investments Holdings Plc Reports Loss of ZMW 3.79 Billion in 2022, but Improves Performance with Increased Dividends and Focus on Strategic Partnerships

Published On: September 13, 2023Company: ZCCM Investments Holdings Plc (ZCCM.zm)
What strategies has ZCCM-IH adopted to improve future performance?
ZCCM-IH is focusing heavily on stabilizing their operations, especially with Mopani Copper Mines Plc, with an emphasis on finding a strategic equity partner. They are also undertaking major capital projects to develop mines and diversifying their income to enhance shareholder value. Additionally, ZCCM-IH is planning to establish a precious metals plant and is committed to undertaking exploration activities and acquiring new licenses for minerals as outlined in their 2026 Strategic Plan.

Summary of ZCCM Investments Holdings Plc (ZCCM.zm) 2022 Annual Report

  • Despite the adverse effects of the COVID-19 pandemic and geopolitical tensions, copper prices stood firm, with an average gain of around 5% over 2021.
  • ZCCM-IH focused on stabilizing operations at Mopani Copper Mines Plc, and as part of the effort, mobilized a working capital of $45 million.
  • In a bid to enhance Mopani’s optimum and sustainable operational level, the company sought the assistance of Rothschild & Co. to find a strategic equity partner.
  • A new company royalty transactional method with Kansanshi Mining Plc was finalized.
  • Underperformance of the Mopani mine greatly affected the overall performance of the ZCCM-IH Group, resulting in a loss of ZMW 3.79 billion (US$ 222.03 million).
  • In contrast, the Company’s performance improved over the year, recording a profit of ZMW 4.26 billion, largely due to increased dividends from investee companies.
  • The Group’s retained earnings as at 31 December 2022 stood at ZMW11.94 billion negative, while the Company’s retained earnings remained positive at ZMW7.40 billion.
  • Plans to improve Mopani’s performance through major capital projects and a suitable equity and technical partner is in place for the coming years.
  • Efforts to resolve operational issues of the Zambia Gold Company Limited and harness the gold resources are ongoing with aid from strategic engagements.
  • The company abandoned previous plans to undertake a group reorganisation with the Industrial Development Corporation but plans a remodel of its portfolio to ensure increased shareholder value.
  • A detailed study on the feasibility of establishing a precious metals plant, aimed at participating in the mineral value chain, is expected to be finalised by the third quarter of 2023.
  • The report stresses the importance of positive corporate culture and reveals that steps have been taken to define clear targets and redefine the company’s culture to improve overall performance.
  • ZCCM-IH has identified non-performing shareholder loans and the unpredictable nature of dividend income as major business risks and has implemented rigorous monitoring frameworks and income diversification strategies to mitigate these risks.
  • The company is also diversifying its portfolio of markets and jurisdictions to manage geopolitical risks and macroeconomic uncertainties.
  • The Company anticipates a strong demand in the mining sector, particularly for copper, and looks forward to opportunities ahead in the mining sector.

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About ZCCM Investments Holdings Plc (ZCCM.zm)

ZCCM Investments Holdings Plc. is a leading Zambian investment holding company listed on the Lusaka Securities Exchange. The company is well-positioned to manage and add value to the mineral interests of the Zambian Government and to enhance national economic development. ZCCM Investments Holdings is the majority shareholder in a portfolio of companies operating in the Zambian mining sector and also operates an investment business of its own in various countries.

Giri, AfricanFinancials’ Artificial Intelligence (AI) Analyst, sourced this article from the attached or linked document. We cannot guarantee the accuracy or completeness of Giri’s article and we disclaim any liability arising from reliance on information provided in the article. This article is not a recommendation to buy or sell the securities mentioned therein and should be read in conjunction with the original PDF or link to this article. Other sources should be consulted for verification and additional context. Please seek investment advice from an authorised stockbroker or advisor.

Giri

Giri, our AfricanFinancials AInalyst, was born in 2006. She publishes investor, ESG, sustainability and corporate earnings reports of our African stock exchange listed companies simply and quickly, so investors have a view of investment value and opportunity.

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