| Tue 8 Jul 2008, 17:00 | | ZCI - Zambia Copper Investments - Unaudited Consolidated Financial Results |
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ZCI
ZAKK
ZCI - Zambia Copper Investments - Unaudited Consolidated Financial Results
ZAMBIA COPPER INVESTMENTS LIMITED
(Registered in Bermuda)
("ZCI" or "the Company")
JSE code: ZCI
ISIN: BMG988431240
UNAUDITED CONSOLIDATED FINANCIAL RESULTS
Consolidated Income Statement for the year ended 31 March 2008
expressed in thousands of US Dollars
Year ended Year ended
31 March 31 March
2008 2007
Finance income 465 730
General and administration expenses (5,956) (849)
Income from associated company 36,268 85,577
Net cost arising from assets classified
as held for sale (2,732) -
Profit before taxation 28,045 85,458
Taxation (67) (60)
Profit for the year 27,978 85,398
Headline earnings per ordinary share in
US cents 25.62 67.67
Net profit per ordinary share in US 22.17 67.67
cents
Number of ordinary shares in issue 126,197,362 126,197,362
Consolidated Balance Sheet as at 31 March 2008
expressed in thousands of US Dollars
31 March 31 March
2008 2007
Non-current assets
Long term accounts receivable - 4,890
Investment in associated company - 170,313
- 175,203
Current assets
Available for sale investment 12,322 10,593
Assets classified as held for sale 205,398 -
Accounts receivable 5,258 5,250
Cash and cash equivalents 6,584 2,856
229,562 18,699
Current liabilities
Accounts payable and accrued liabilities (7,296) (188)
Net current assets 222,266 18,511
Total assets less current liabilities 222,266 193,714
Net assets 222,266 193,714
Capital and reserves
Capital 334,547 334,547
Revaluation reserve 702 42
Deficit on hedging reserve - (12,558)
Amounts recognised directly in equity (12,113) -
relating to assets classified as held for sale
Accumulated deficit (100,870) (128,848)
Shareholders` equity 222,266 193,714
Consolidated statement of changes to equity for the year ended 31
March 2008
expressed in thousands of US Dollars
Share Contributed Revaluation Hedging
capital surplus reserve reserve
Balance at 31 March 2006 30,299 304,248 42 (14,420)
Revaluation on available
for sale investment - - 531 -
Hedging reserve of
associated company - - - 1,862
Profit for the year - - - -
Balance at 31 March 2007 30,299 304,248 573 (12,558)
Revaluation on available
for sale investment - - 129 -
Hedging reserve of
associated company - - - 445
Transfer from hedging reserve - - - 12,113
Profit for the year - - - -
Balance at 31 March 2008 30,299 304,248 702 -
Asset Accumulated Total
classified deficit equity
as held for
sale
Balance at 31 March 2006 - (214,246) 105,923
Revaluation on available for sale investment - - 531
Hedging reserve of associated company - - 1,862
Profit for the year - 85,398 85,398
Balance at 31 March 2007 - (128,848) 193,714
Revaluation on available for sale investment - - 129
Hedging reserve of associated company - 445 -
Transfer from hedging reserve - - (12,113)
Profit for the year 27,978 27,978 -
Balance at 31 March 2008 (100,870) 222,266 (12,113)
Consolidated statement of cash flows for the year ended 31 March
2008
expressed in thousands of US Dollars
Year ended Year ended
31 March 31 March
2008 2007
Cash flow from operating activities
Cash paid to suppliers and employees (3,198) (876)
Cash absorbed by operations (3,198) (876)
Interest received 135 114
Income tax paid (86) (76)
Net cash absorbed by operating
activities (3,149) (838)
Cash flow from investing activities
Purchase of available for sale (1,600) (7,220)
investments
Dividends received from associated 1,628 1,628
company
Dividends received from assets 1,629 -
classified as held for sale
Proceeds from partial disposal of 5,220 5,220
investment in subsidiary
Cash generated / (absorbed) by 6,877 (372)
investing activities
Net increase / (decrease) in cash 3,728 (1,210)
Net cash at the beginning of the year 2,856 4,066
Net cash at the end of the year 6,584 2,856
1. ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these financial
statements for the year ended 31 March 200 8 are in accordance with
International Financial Reporting Standards, including IAS 34.
The consolidated balance sheet of Zambia Copper Investments Limited and its
subsidiaries (the "Group") for the year ended 31 March 2008 and the related
consolidated statements of income, cash flow and changes in shareholders`
equity for the period then ended, are in the process of being audited by KPMG
Audit S.a.r.l., Luxembourg. These consolidated financial statements are the
responsibility of the Board of Directors.
2. ASSOCIATED COMPANIES
The Group reduced its shareholding in KCM from 58% to 28.4% in 2004. The
majority shareholder of KCM has exercised an option to purchase ZCI`s shares of
KCM. The negotiations relating to the option were completed during the year;
therefore the investment in KCM was reclassified as held for sale as at 30
September 2007.
2008 2007
Value at 1 April 170,313 84,502
Share of associated companies` profit 36,268 85,577
Dividends received (1,628) (1,628)
Share of equity movements 445 1,862
Reclassification (205,398) -
Value at 31 March - 170,313
3. LONG TERM ACCOUNTS RECEIVABLE
Resulting from the Vedanta transaction, the Company will receive consideration
of USD 23,200,000 for a waiver of their pre-emptive subscription rights to KCM
shares. This amount is receivable over a period from 4 November 2004 to 31
December 2008. The deferred consideration is recorded at its discounted net
present value.
4. AVAILABLE FOR SALE INVESTMENT
The investment represents investments in an equity mutual fund.
The fair value for available for sale investments is based on dealer price
quotations. Gains and losses arising from changes in the fair value are
recognized directly in equity until the security is disposed of or is
determined to be impaired, at which time the cumulative gain or loss previously
recognized in equity is included in the net profit and loss for the period.
5. ASSETS CLASSIFIED AS HELD FOR SALE
Based on the accounting requirements of IFRS 5, the investment in KCM meets the
criteria to be classified as held for sale with effect from 30 September 2007.
The investment is measured at its carrying value as of 30 September 2007 and
equity accounting was discontinued as from that date.
6. NET COST ARISING FROM ASSETS CLASSIFIED AS HELD FOR SALE
This amount is comprised of dividend income from assets classified as held for
sale of USD 1,629,000 (see Note 5) and negative fair value on derivative of USD
(4,361,000). The negative fair value of the derivative is also included in the
balance sheet as a derivative financial liability under the caption accounts
payable and accrued liabilities.
7. PROFIT PER SHARE
2008 2007
Net profit attributable to shareholders 27,978 85,398
Add exceptional expenses:
Negative fair value of derivative linked
to assets classified as held for sale 4,361 -
Headline earnings 32,339 85,398
Weighted average number of shares in 126,197,362 126,197,362
issue
Headline earnings per ordinary share (US cents) 25.62 67.67
Basic net profit per ordinary share (US cents) 22.17 67.67
8. SUBSEQUENT EVENTS
With effective date of 9 April 2008, ZCI sold it`s 28.4% shareholding in KCM to
Vedanta. The sale price was established by arbitration according to the terms
of the Vedanta call option deed, and the proceeds of USD 213,150,000 were
received in cash in April 2008.
CHAIRMAN`S REPORT
I am pleased to present the Company`s unaudited annual financial statements for
the year ended 31 March 2008. These results are largely comparable to the
reviewed interim results for the six months ending 31 September 2007, being the
first time that the Company reflected it`s investment in KCM as a held
-for-sale investment in terms of IFRS 5. The Company`s consolidated net profit
figure for the year was USD 28.0 million (2007: USD 85.4 million) and a profit
per share figure in US cents of 22.17 (2007: US cents 67.67). These figures
are in line with expectations, given that since its September 2007 interim
reporting period, the Company has not included any income attributable to
Konkola Copper Mines ("KCM"), other than the cash dividends received.
When reviewing these results, it is important to note that the carrying value of
ZCI`s investment in KCM is based on the value reflected in the September 2007
interim accounts. The difference between the carrying value and the valuation
price of USD 213.15 million, as determined by N M Rothschild & Sons Limited, is
dealt with in Note 6 to the accounts and is the difference between the carrying
value, together with the KCM hedging reserve of USD 12.133 million, less a
derivative financial liability.
Although the valuation price was known in mid-January 2008, the call option
transaction was only completed on 9 April 2008, being after the close of the
Company`s financial year end. This aspect is dealt with in the post balance
sheet events note on this point, and in the valuation of the Vedanta call
option reflected in the note on finance income, included in this abridged
report. On 6 March 2008, Shareholders will have seen the announcement of the
unaudited, pro-forma, projected NAV of the Company post completion of the
transaction of US cents 185.95 per share. This figure was calculated based on
figures available to the company at 29 February 2008. The Company`s updated and
unaudited NAV post completion of the transaction, applying and using figures
available to the Board as at 31 May 2008, is US cents 186.59 per share. This
figure takes into account the actual and accrued expenses relating to the
arbitration, together with growth on the invested funds to the end of May 2008.
The end of the 2008 financial year also effectively marks the end of an
extremely trying and stressful five and a half year period for the Company, its
shareholders and the Board, as the completion of the call option transaction on
10 April 2008, finally concluded the contractual process imposed on the Company
and it s Board by Anglo American Plc when it exited from its investment in KCM
towards the end of 2002.
The Directors of ZCI are in the process of evaluating various options for the
future of the Company. These options will be presented to shareholders at the
Company`s Annual General Meeting.
At the meeting, shareholders will be requested to vote on the future direction
of ZCI and whether the Company should continue in business or whether the
assets should be distributed to shareholders and the Company wound up.
Shareholder approval authorising the Company to repurchase its shares if
necessary, will also be sought from the Annual General Meeting. Detailed
proposals and the recommendations of the directors will be disseminated to
shareholders by way of a circular, which will be posted in advance of the
Annual General Meeting.
ANNUAL GENERAL MEETING
Notice is hereby given that the annual general meeting of the Company will be
held in Luxembourg (venue to be advised), on 24 September 2008 at 11h00 to
transact the business as stated in the notice of annual general meeting, which
will be included in the annual report, together with the venue details.
Thomas Kamwendo
Chairman
Bermuda, 30 June 2008
Registered office
Clarendon House, 2 Church Street, Hamilton, Bermuda
Transfer Secretaries
Computershare Investor Services (Pty) Limited, 70 Marshall
Street, Johannesburg, 2001
Website: www.zci.lu
Date: 08/07/2008 17:00:55 Produced by the JSE SENS Department.
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