ZCI has reported a consolidated net profit figure of USD36.3 million, which compares favourably to the USD13.6 million published for the period ended 31 December 2005.
Shareholders will recall that, with effect from the date of the acquisition by Vedanta Resources plc ("Vedanta") of 51% of KCM on which date KCM's accounting status in ZCI's books changed from subsidiary to associated company, the book cost of the company's investment in KCM was USD36.2 million. This is the cost brought forward as at 1 January 2005 as the cost of ZCI's investment in its associate. In the current financial statements, this cost has been increased by the company's share in the income of KCM, of which ZCI's share amounts to USD37.6 million. The results indicate that while KCM and by extension, the company, have benefited from the consistently high price of copper over the past 10 months, the directors are of the view that disappointingly low production levels at KCM have resulted in KCM not having been able to maximise its profitability further by taking advantage of the currently favourable copper market.
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