ZCCM-IH posts a profit of US$2.2 billion for H1 of 2024
ZCCM Investment Holdings (ZCCM-IH) has posted a net profit of ZMW 55.32 billion (US$2.2 billion) for the first half (H1) of 2024, marking a turnaround from the net loss of ZMW 2.41 billion (US$126 million) recorded in the same period in 2023.
The profit surge has been attributed to the US$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 (US$1.66 billion) from the revaluation of the asset.
“The share of profit from equity-accounted investees increased to ZMW 19.2 billion (US$744.81 million), compared to ZMW 1.23 billion (US$64.17 million) in 2023, mainly due to the significant profit recorded by Mopani of ZMW 35.17 billion (US$1.38 billion) in this period, compared to six months ended 30 June 2023, of ZMW 4.02 billion loss (US$209.87 million loss)) due to the Glencore/Carlisa loans of US$1.7 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 (US$150 million) has been recognized in 2024, which was not present in the previous period. The US$150 million is a partial consideration for the write-down of the Mopani debts to Glencore.”
“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 (US$185.94 million) for this period, compared to a profit of ZMW 551.49 million (US$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 (US$26.3 million) in June 2023, to ZMW 5.3 billion (US$216.83 million) in June 2024, is mainly due to the Glencore loan of US$150.44 million recorded during the period.”
