| Wed 3 Aug 2005, 15:48 | | Reviewed Provisional Report |
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Zambia Copper Investments Limited - Reviewed Provisional Report
ZAMBIA COPPER INVESTMENTS LIMITED
(Registered in Bermuda)
(`ZCI` or `the Company`)
JSE code: ZCI
ISIN: BMG988431240
REVIEWED PROVISIONAL REPORT
CONSOLIDATED STATEMENT OF EARNINGS
for the year ended December 31, 2004
expressed in thousands of US Dollars
Restated
Audited
2004 2003
Turnover 440,649 356,308
Cost of sales (300,638) (282,913)
Gross Profit 140,011 73,395
Other operating expenses (62,020) (75,282)
Depreciation (12,412) (9,840)
Profit / (Loss) from operations 65,579 (11,727)
Other income 2,485 2,011
Interest income 30 11
Interest expense (1,331) (1,121)
General and administration expenses (1,090) (479)
Income on sale of investment in subsidiary company (19) -
Income from affiliated company 25,093 -
Exceptional item (9,763) -
Profit / (Loss) before taxation 80,984 (11,305)
Taxation (85) (166)
Profit / (Loss) after taxation 80,899 (11,471)
(Profit) / Loss attributable to minority interest (23,510) 4,598
Net Profit / (Loss) 57,389 (6,873)
per ordinary share in US cents
Headline profit / (loss) before exceptional items 53.21 (5.45)
Exceptional items (7.73) -
Net profit / (loss) 45.48 (5.45)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at December 31, 2004
expressed in thousands of US Dollars
Restated
Audited
2004 2003
Fixed Assets
Tangible fixed assets - 116,011
Long term accounts receivable 15,660 -
Investments in affiliated companies
Investment in Konkola Copper Mines Plc 61,282 -
76,942 116,011
Current assets
Stocks - 87,864
Accounts receivable 5,220 46,924
Cash and short-term investments 3,120 4,761
8,340 139,549
Current liabilities
Short term loans and bank overdrafts - (25,933)
Accounts payable and accrued liabilities (356) (59,778)
(356) (85,711)
Net current assets 7,984 53,838
Total assets less current liabilities 84,926 169,849
Long term liabilities
Long term loans - (35,142)
Provisions - (89,429)
Minority interest - (18,255)
Net assets 84,926 27,023
Capital and reserves
Capital 334,547 508,807
Revaluation reserves - 1,220
Hedging reserves - (1,734)
Accumulated deficit (249,621) (481,270)
Shareholders` equity 84,926 27,023
CONSOLIDATED STATEMENT OF CHANGES TO EQUITY
for the year ended December 31, 2004
expressed in thousands of US Dollars
Share Contributed Accumulated
capital surplus deficit
Balance at December 31, 2002 30,299 478,508 (459,450)
Net loss on Cashflow Hedges - - -
Minority Interest on Cashflow Hedges - - -
Revaluation on Equity Fund
Investment - - -
Loss for the year - - (6,873)
Balance at December 31, 2003
as previously reported 30,299 478,508 (466,323)
Prior year adjustment - - (25,771)
Minority Interest on prior year
adjustment - - 10,824
Balance at December 31, 2003
as restated 30,299 478,508 (481,270)
Reversal of net loss on Cashflow
Hedges - - -
Reversal Minority Interest on
Cashflow Hedges - - -
Reversal Revaluation on Equity Fund
Investment - - -
Change in scope of consolidation - (174,260) 174,260
Profit for the year - - 57,389
Balance at December 31, 2004 30,299 304,248 (249,621)
Revaluation Hedging
reserve reserves Total
Balance at December 31, 2002 - - 49,357
Net loss on Cashflow Hedges - (2,989) (2,989)
Minority Interest on Cashflow Hedges - 1,255 1,255
Revaluation on Equity Fund Investment 1,220 - 1,220
Loss for the year - - (6,873)
Balance at December 31, 2003
as previously reported 1,220 (1,734) 41,970
Prior year adjustment - - (25,771)
Minority Interest on prior year
adjustment - - 10,824
Balance at December 31, 2003
as restated 1,220 (1,734) 27,023
Reversal of net loss on Cashflow
Hedges - 2,989 2,989
Reversal Minority Interest on
Cashflow Hedges - (1,255) (1,255)
Reversal Revaluation on Equity Fund
Investment (1,220) - (1,220)
Change in scope of consolidation - - -
Profit for the year - - 57,389
Balance at December 31, 2004 - - 84,926
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended December 31, 2004
expressed in thousands of US Dollars
Restated
Audited
2004 2003
Cash flow from operating activities
Cash received from customers 425,201 355,792
Cash paid to suppliers and employees (325,967) (355,253)
Cash generated by operations 99,234 539
Interest received 30 -
Interest paid (1,020) (1,150)
Income tax paid (121) (256)
Net cash generated / (absorbed) by operating
activities 98,123 (867)
Cash flow from investing activities
Proceeds from disposal of tangible fixed assets - 11
Proceeds from disposal of short term investment 981 -
Proceeds from partial disposal of investment in
subsidiary 2,320 -
Purchase of tangible fixed assets (46,060) (54,838)
Cash (absorbed) by investing activities (42,759) (54,827)
Cash flow from financing activities
Lease financing paid (3,526) -
Cash (absorbed) by financing activities (3,526) -
Change in scope of consolidation (26,326) -
Net increase / (decrease) in cash 25,512 (55,694)
Net (debt) / cash at the beginning of the year (22,392) 33,302
Net cash / (debt) at the end of the year 3,120 (22,392)
Cash deposits and cash at bank 3,120 3,541
Short term loans and bank overdrafts - (25,933)
Net cash / (debt) at the end of the year 3,120 (22,392)
The financial statements were prepared in accordance with International
Financial Reporting Standards. The comparative information for the year ended 31
December 2003 has been restated due to a change in accounting policy in respect
of deferred secondary development expenditure.
The provisional results for the year ended 31 December 2004 have been reviewed
by Deloitte S.A., Luxembourg, in accordance with the International Standard on
Review Engagements (ISRE) 2400, applicable to review engagements. Based on this
review, nothing has come to the attention of the auditors that causes them to
believe that the accompanying provisional consolidated statement of financial
position of ZCI Limited at 31 December 2004, and the related consolidated
statement of earnings, consolidated statement of changes to equity, and
consolidated statement of cash flows for the year then ended do not give a true
and fair view in accordance with International Financial Reporting Standards.
The review report is available for inspection at the registered office of the
Company.
CHAIRMAN`S STATEMENT
I wish to advise at the outset that the Board of ZCI sincerely regrets the
delays associated with the production of these accounts, which led to the
suspension of the share on the Johannesburg and Paris exchanges. The delay in
production of the accounts has largely been as a result of difficulties
experienced in receiving accurate information from Konkola Copper Mines plc
(`KCM`), which have arisen from inter alia changes in the accounting policies
and the financial year-end of KCM, which were required to align KCM with the
group accounting and reporting requirements of Vedanta Resources plc
(`Vedanta`).
ZCI has in the past, included substantial impairments on the fixed asset values
appearing in KCM`s accounts. In order to comply with IFRS requirements, ZCI has
maintained these impairments, where appropriate, in its 31 December 2004
accounts, to remain consistent with previous years. The present delays were
largely related to ZCI`s attempts to obtain specific information on KCM`s Fixed
Asset Register values. Vedanta has however, and to the knowledge of the ZCI
Board, not recorded any impairment to the KCM results.
Turning now to the period under review, the 2004 financial year was
characterised by the focus on the completion of the Strategic Equity Partner
(`SEP`) process that was initially prescribed by the contractual provisions
governing the Company`s restructuring in 2002.
On the 26th of October 2004, the Company`s shareholders met in Paris and, after
an extensive debate, voted to approve the appointment of Vedanta as the new
majority shareholder of KCM. The transaction was concluded on 5 November 2004
and from that date ZCI`s shareholding in KCM reduced from 58% to 28.4% and
Vedanta became the 51% majority shareholder of KCM.
This being now an accomplished fact, the Directors of ZCI will devote their best
efforts to seeing that Vedanta lives up to all the hopes the promoters had when
negotiating this major transaction, which represents a momentous sacrifice for
our company and its shareholders.
The changes to ZCI`s shareholding in KCM during 2004 have meant that the
presentation of our results for the period has been adjusted to reflect ZCI as
the majority shareholder in KCM for the initial ten months of the year, for
which period the results are consolidated, after which, the results for the
remaining two months are unconsolidated and are prepared along simple equity
accounting lines.
Due to consistently elevated copper prices throughout the period, KCM returned
strong results for the year. As a result, ZCI recorded a consolidated net profit
of $57.4 million for the year ending 31 December 2004 compared to a restated
consolidated net loss of $6.9 million in 2003. However, it must be borne in mind
that KCM is now a profitable investment due to the ongoing exceptionally high
prices of copper and the anticipated gradual positive input of Vedanta.
Therefore ZCI`s balance sheet should consequently be strengthened, as will be
noted by the increase in net asset value (per ordinary share) to $0.6730 from
the restated $0.2141 in 2003.
As you will have noted from earlier Company announcements, the ZCI Board has
welcomed two new directors to the Board, namely Thomas Kamwendo, who is also the
Chairman of the Copperbelt Development Foundation, the Company`s single largest
shareholder, and myself. During March 2005, your former Chairman, Barrie Ireton,
tendered his resignation from the Board of ZCI. The Board has thanked him for
his contribution regretting his departure and wishes him success in his future
endeavours.
The Board elected me as Chairman with effect from 15 March 2005 and I look
forward to working closely with my fellow directors as ZCI settles into its new
difficult role as a minority shareholder of KCM but we must now look to the
future, plan and work hard towards an harmonious development of our company in
the interest of all the shareholders.
Jean-Pierre Rozan
Chairman
Bermuda
03 August 2005
Registered office
Clarendon House
2 Church Street
Hamilton, Bermuda
Sponsor
RAND MERCHANT BANK
(A division of FirstRand Bank Limited)
Date: 03/08/2005 03:45:33 PM
Produced by the JSE SENS Department
