ZCCM Investment Holdings (ZCCM-IH) has posted a net profit of ZMW 55.32 billion (USD 2.2 billion) for the first half (H1) of 2024, marking a turnaround from the net loss of ZMW 2.41 billion (USD 126 million) recorded in the same period last year.
The profit surge has been attributed to the USD $1.1 billion capital investment by International Resources Holding RSC Ltd (IRH) in Mopani Copper Mines plc (MCM), which resulted in a one-off gain of ZMW 42.3 billion (USD $1.66 billion) from the revaluation of the asset.
“The share of profit from equity-accounted investees increased to ZMW 19.2 billion (USD 744.81 million), compared to ZMW 1.23 billion ( USD 64.17 million) in 2023, mainly due to the significant profit recorded by Mopani of ZMW 35.17 billion (USD 1.38 billion) in this period, compared to six months ended 30 June 2023 of ZMW 4.02 billion loss (USD 209.87 million loss)) due to the Glencore/Carlisa loans of USD1.7 billion that have been settled via the Amendment, Restatement, and Consolidation (ARCA) Agreement signed by IRH/Delta and ZCCM-IH following finalization of the Mopani’ Strategic Equity Transaction.”
“An investment expense of ZMW 3.86 billion (USD150 million) has been recognized in 2024, which was not present in the previous period. The USD 150 million is a partial consideration for the write-down of the Mopani debts to Glencore.” Reads the financial statement seen by the Zambian Business Times-ZBT.
“Overall, total assets increased by 17.6% during this period, primarily driven by the rise in noncurrent assets.” This increase has been mainly attributable to the gain recognized from the reclassification of Mopani from a subsidiary to an associate and the inclusion of the Mingomba asset recorded during the period.
Despite the profit recorded at the Group level, the Company posted a loss of ZMW 4.74 billion (USD 185.94 million) for this period, compared to a profit of ZMW 551.49 million (USD 28.80 million) in the same period of 2023.
“This significant decline was primarily attributed to a large investment expense as stated above, and a decrease in revenue, driven by the reclassification of Mopani from a subsidiary to an associate. Total assets have nearly doubled, reflecting an overall increase of 90.9%.”
“This growth is driven primarily by the substantial increase in non-current assets, indicating significant capital investments in Mopani and other investments. The significant increase in total liabilities from ZMW 460.3 million (USD26.3 million) in June 2023 to ZMW 5.3 billion (USD 216.83 million) in June 2024 is mainly due to the Glencore loan of USD 150.44 million recorded during the period.”
