CEC AGM Financial performance pres 31 Mar 11


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Copperbelt Energy Corporation AGM Financial performance pres 31 Mar 11

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CEC AGM Financial performance pres 31 Mar 11

  1. 1. Presentation to Annual General MeetingFinancial Performance for the Year Ended 31st December 2010& Corporate Development Update Michael J Tarney Managing Director – Corporate Development & CFO Copperbelt Energy Corporation 31st March 2011
  2. 2. Income Statement Highlights– Gross profit increased by 8.3% • Load growth and tariff indexation– Operating expenses increased by 15% • Personnel expenses increased by 35.5% • Other operating expenses reduced by 30% • Depreciation increased by 14%– EBITDA increased by 6%– Earnings after tax increased by 7%– Note: Breakdown of earnings: • Hedging benefit 20%, Telecoms 7%, Core Business 73%
  3. 3. Other Highlights– Working Capital • Negative working capital position of $7.1m • $10m facility agreed with Citi– Fixed Assets - $239m at 31st December • $13.8m spent during the year including – $4.0m primary, $3.2m secondary equipment, incl. $2.5m on power factor correction – $1.4m Kabompo Gorge Hydro – $2.3m optical fibre installation– Gearing • $32.1m debt– Share Price • ZMK 615 per share at year end, 43% increase
  4. 4. Key Business Issues• Mines are doing well – Growth in sales volume both CEC and ZESCO customers• Tariffs are not cost reflective – Sales price US4.5 to 5.0 Cents currently – New generation – US 10 to 12 Cents cost incl. transmission• Investment is increasing: – Capex of $13.8m 2010 vs ~$3m a decade ago – New project pipeline developed requires increasing rate of investment• Market is de-regulating – Power shortages driving new investment in generation, transmission – CEC well placed to operate / invest in new projects• Key priorities: – Increase tariffs – Re-capitalise business • Debt - maintain credit rating • Equity – rights issue / co-investors at project level
  5. 5. 2nd Zambia – DRC Interconnector Project• Strategic SAPP project N• Design and tendering Democratic Republic of Congo process completed Border crossing point• Permits 500MW firm power Michelo Substation to flow into SAPP Chililabombwe Republic of Zambia Town• Investment of $12m Kafue River• Pursuing long term Chingola Town Proposed Line Route financing with development institutions Luano Existing 220kV Line Substation• PPA with SNEL signed for Zambian section of the Second Zambia-DRC Interconnector on-sell of 50MW into SAPP
  6. 6. Kabompo Gorge Hydro Summary– Implementation Agreement drafted • OPPPI, ZDA, ZRA, ERB consents underway– Detailed Tendering Stage: • 5 contractors shortlisted • Final bids expected 3rd Quarter of 2011– Final report submitted to ECZ • Commencement of RAP activities– Financing activities have commenced • SPV structure recommended, non-recourse debt – total cost incl. transmission ~$170m– Site preparation • Establishment of town, road, grid connection
  7. 7. Luapula Hydro and Transmission Projects Summary – Project comprises • 5 Hydro Sites on Luapula River • HV line from Copperbelt to Mansa, other areas of Luapula – Generation capacity >800MW – MoU for development process under discussion – DRC Minister of Energy letter of support received – Next step - studies of environmental and river scheme design
  8. 8. Telecommunications Interests• CEC fibre networks spans over 770km – presence in Lusaka, Copperbelt, Lumwana, Kabwe, Livingstone, Solwezi• Focus so far on investment in metropolitan areas• Revenue grew from $0.3m in 2009 to $1.4m in 2010, in 2011 expected to grow close to $3.0m• Network Services Licence - ZICTA• 50% JV Realtime – drives sales and customer service• New strategic partnership in fibre business shortly to be announced – Increased fibre roll-out, circa 1000km in 2011
  9. 9. Newly formed business unit of CECVision: To be the leading and natural partner for the development of renewable energy infrastructure in Africa through establishing strategic partnershipsMission: We are committed to building capacity in varied renewable technologies and project development methodologies to commercially exploit the conditions prevailing at renewable energy infrastructure development sites
  10. 10. Portfolio of Current Technologies and Projects Collaboration with CFC on use of Copperbelt wood processing waste ; use of wood to be harvested at Kabompo Hydro site Establishment of a 1 million litres per annum biodiesel refinery Provision of power to workers’ compound and offices at Kabompo hydro site
  11. 11. The ENDContact Details:Michael J. TarneyManaging Director – Corporate DevelopmentCopperbelt Energy Corporation PLC37B Cheetah RoadKabulongaLusaka – ZAMBIATel: +260 211 261647Fax: +260 211 261640Cell: +260 966 990006E-mail: tarneym@cec.com.zmWebsite: www.cecinvestor.comCompany E-mail: info@cec.com.zmTelephone: +260 211 261647Public Relations:Chama KalimaTelephone: +260 212 244914E-mail: nsabika@cec.com.zmInvestor Relations:Clara MusamaTelephone: +260 212 244916E-mail: musamac@cec.com.zm