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CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
CEC - Analysis of Financial Statements
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CEC - Analysis of Financial Statements

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Copperbelt Energy Corporation plc …

Copperbelt Energy Corporation plc
Analysis of
Financial Statements and
Directors’ Report
For the year ended 31st December 2008

For Presentation at the CEC Annual General Meeting- 17th April,2009.

Published in: Business, Economy & Finance
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  • 1. Copperbelt Energy Corporation plc Analysis of Financial Statements and Directors’ Report For the year ended 31st December 2008 For Presentation at the CEC Annual General Meeting- 17th April,2009. 1
  • 2. Summarised Statement of Income Actual Actual Variance 2008 2007 Description US$'000 US$'000 US$'000 Income 177,486 131,746 45,740 Cost Of Sales (127,960) (93,000) (34,960) Gross Profit 49,526 38,746 10,780 Other operating income 2,222 2,645 (423) Operating Costs (34,526) (28,085) (6,441) Profit Before Interest & Tax 17,222 13,306 3,916 Interest Receivable 964 319 645 Interest Payable (2,709) (2,225) (484) Profit Before Tax 15,477 11,400 4,077 Tax (5,334) (4,149) (1,185) Profit After Tax 10,143 7,251 2,892 2
  • 3. Summarised Balance Sheet Decription 2008 2007 Variance Actual Actual $`000 $`000 $`000 Total Fixed Assets 211,108 192,607 18,501 Accum. depreciation (85,710) (77,013) (8,697) Net Book Value 125,398 115,594 9,804) Total Current Assets 53,579 35,151 18,428 Total Current Liabilities (39,786) (26,149) (13,637) Total L/Term Liabilities (99,618) (78,966) (20,652) Net Assets 39,573 45,630 (6,057) Share Capital 100 100 - Share Premium 148 148 - Revenue Reserves 39,325 45,382 (6,057) Capital and Reserves 39,573 45,630 (6,057) 3
  • 4. Summarised Statement of Cash Flows Description 2008 2007 Variance Actual Actual $`000 $`000 $`000 Net cash Inflows on Operating activities 16,637 19,644 (3,007) Tax paid (6,265) (4,368) (1,897) Net cash inflow on Op. Act 10,372 15,276 (4,904) Investing Activities Fixed assets purchased and Interest received (6,083) (6,216) 133 Financing Activities Loans Repaid (3,979) (1,300) (2,679) Loans received 15,000 30,000 (15,000) Dividends paid (16,200) (20,300) 4,100 Net financing activities (5,179) 8,400 (13,579) Net movement in cash (890) 17,460 (18,350) Exchange Difference (268) (52) (216) Opening balance 17,472 64 17,408 Balance as at 31st Dec,2008 16,314 17,472 (1,158) 4
  • 5. Dividend Policy • Dividend policy as per CEC’s Articles of Association is determined by the Board in accordance with the following principles. • To be paid from actual and accumulated profits after: • provision for working capital; • making transfers to reserves; • servicing of all debts; • taxation liabilities. • Two dividend payments per year, treated as interim dividends. • Process is efficient in providing timely returns to shareholders. • $16.2m paid in total during 2008, total of K59.15 per share. • Gross dividend yield of 13%. • Stability and predictability in dividend payment is the Board’s objective. 5
  • 6. Gearing Policy • Takes into account: • Working capital. • Capital Expenditure. • Debt Service Cover Ratios & Covenants. • $35m Facility entered into in December 2007 with Citi / DEG: • $5m for employee share scheme. • $13m to replace overdraft facility. • $17m to fund specific capital projects. • Fully drawn in 2008, in accordance with agreement. • Customer Financing utilised where possible: • Performance linked. • Reduces risks to Company. 6
  • 7. Business Environment • Reduction in copper and cobalt prices in final quarter of 2008 had a negative impact on some customers: • Luanshya Copper Mines; • Chambishi Metals. • Overall reduction of around 20% experienced in sales to mines by end of first quarter of 2009. • 50% increase in copper prices (today) since start of 2009 has improved prospects. • Cost reduction processes have been implemented. • CEC Board is supporting initiatives to diversify sources of income. • Energy sector investment remains a priority for all stakeholders, funding sources are still available. 7
  • 8. Transmission Investment Konkola Expansion • $35m has been invested in transmission assets that supply KCM’s new Nchanga Smelter and Bancroft shaft. • Will facilitate expansion of KCM’s production from 2 to 6 million tonnes per year. • Pre-financed by KCM, assets to be acquired by CEC during 2009. 8
  • 9. Transmission Investment New Zambia-DRC Interconnector • CEC has operated a single circuit 220kV interconnector with DRC for > 50 years. • A new double circuit 220kV interconnector will be constructed to facilitate flow of 500MW firm power from DRC into SAPP. • Part of a $0.5Bn World Bank sponsored project in DRC. • Return on investment to be obtained by on-sale of power from DRC, earning a margin to recover the investment. 9
  • 10. Generation Investment Kabompo Gorge • Kabompo Gorge is situated in a remote area of North Western Province 70km from Lumwana. • Site is believed to be capable of generating around 40MW. • CEC and Tata submitted a bid to develop the project. • OPPPI managed a process of competitive tender. • Feasibility Study to be undertaken during 2009. • Expect 65m dam wall, capital of $80m. • If feasibility recommendation is positive, commissioning to take place by 2014. 10
  • 11. Investment in Realtime • CEC has operated a telecommunications business since 2005 through a ‘Carrier of Carriers’ License. • Income of $284,000 for 2008, mainly mining customers. • New opportunity has arisen to supply key customers throughout main towns in Zambia: • Zambian Revenue Authority. • Banks. • Cellular providers. • Realtime has worked jointly with CEC on marketing since 2005 • JV Alliance will facilitate income growth and shareholder value creation. • JV investment to complete by mid-2009. 11
  • 12. Directors’ Report – Other Issues • Insurance maintained for Company’s assets and operations. • Corporate Governance: • Compliance with LuSE Code • Board Committees • Executive Committee • Audit Committee • SHE Committee • Employee Remuneration & Development Committee • Operations Report – to follow. 12
  • 13. Copperbelt Energy Corporation plc Operations Report For the year ended 31st December 2008 For Presentation at the CEC Annual General Meeting- 17th April,2009. ( 13
  • 14. Looking back on 2008…… 2008 was characterised by….. • Good CEC system performance: – Increase in incidents but majority ‘external’ (lightning, conductor theft/vandalism, through faults etc). – Vandalism/theft down but still a cause for concern. – Only 2 of above incidents resulted in loss of supply. • Poor national and regional grid performance: – 4 massive incidents with 3 national blackouts. – Voltage and frequency instability. – Zambian grid disconnected from SAPP for lengthy periods. – Shortage of generation capacity throughout the year aggravated by the above: • Regular national load shedding. • Regular requests for CEC to cut back load. 14
  • 15. Looking back on 2008…… • Till September…. – Steady load growth. – Promise of numerous projects. • Nama, Mokamba, Muliashi, Konkola North. • Successful implementation of tariff review – Detailed analysis of Zesco’s cost. – Cost-reflective 35% adjustment to the Zesco tariff implemented in April and backdated to 1st Jan ’09. – 33% simultaneous adjustment to CEC’s customers. • High level of CEC plant availability. 15
  • 16. Maintenance highlights • Over 90% adherence to planned maintenance program. • 169 transformers underwent at least two oil tests. • 36 substations scanned using infra-red thermography, at least twice. • Sweep Frequency Response Analysis testing introduced, with benefit of establishing any winding or tap changer defects non-intrusively. 15 transformers tested so far. • Numerous Transformers overhauled in CEC Tx workshop. • Merlin Gerin SF6 CB checks following catastrophic failure. • Rewound 15MVA trf installed and 2nd trf sent to LHM in RSA. • GTA engine o/h’s –1 done and another underway ($800k vs $1.4m). • Luano GTA’s (generator, exciter and rotor) condition assessment done for 1st time – generally OK but insulation has aged. 16
  • 17. New Business Development in 2008 • Frontier Mine: – Commissioned end 2007/early 2008. – Some teething problems but 25 MW steady consumption wheeled from DRC. • KEP: – At $35m, CEC’s biggest project ever. – Excellent progress on schedule and on budget. – Incident free. – Most equipment commissioned – remainder during 2nd Q 2009. • Power Factor Correction project: – Studies completed – urgently required to stabilise voltages. – Agreement with customers for joint approach to project. – Contract awarded. 17
  • 18. New Business Development in 2008 • Cancelled/postponed projects following the dramatic drop in commodity prices: – Muliashi. – Nama. – Mokambo. – Konkola North (delayed only). • DRC Interconnector: – Urgent need confirmed – shortage of power, incidents. – New impetus. – Breakthrough in negotiations towards end 2008 with signing of Term Sheet. 18
  • 19. Trend in Copper Price – May ’09 to April ‘09 19
  • 20. 2008 SHE Performance 2007 2008 LIMIT 2007 LIMIT / SHE Parameter 2008 Actual / Target Actual TARGET Fatalities 1 0 0 0 LTA (s) 0 0 3 0 RTA (s) 6 4 6 <5 RTI (s) 24 19 39 <20 Other SHE Incidents & Regulations Breaches 7 7 11 <8 Serious Environmental Incidents 0 0 0 0 Near Miss Reports 134 100 106 100 Refresher Driver Training 133 100 161 100 Annual Health Check-Ups 329 264 - - Tool Box Safety Talk 6 8 - - HV Safety Awareness 128 103 - - Safety Meetings 49 75 78 88 20
  • 21. Key SHE Achievements 2008 • Nil Lost Time Accidents (LTAs) Recorded. • Nil Serious Environmental Incidents. • Reduction in RTAs/RTIs (65 vs. 50). • 100% closeout Maclaren incident Recommendations. • 97% closeout 2007 SHE External Audit Actions. • SHE Training for Directors and Managers. • 21% Increase / Improvement in Near miss Reporting. • 100% compliance with statutory emission limits for GTAs. • Above target Employee participation – Annual Health Checkups (329 vs. 264). 21
  • 22. The END 22

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