CEC releases Unaudited Results for the Half Year Ended 30 June 2024
Financial Indicators
* Adjusted PAT represents PAT less post-tax writebacks and impairments.
CEO, Owen Silavwe, commented:
“I am pleased to share the performance highlights of Copperbelt Energy Corporation Plc (CEC) for the period ending 30th June 2024. This period has been marked by significant improvements in our performance and continued embedment of strategic developments that underscore our commitment to growth, sustainability, and operational excellence amidst a national energy crisis.
The Zambian market is faced with an acute supply gap resulting from the unprecedented drought conditions experienced during the 2023/2024 rainy season. Consequently, the national power shortfall is expected to peak at 1500MW or more, necessitating the introduction of high-cost power from imports and emergency sources in addition to the nationwide rollout of an extensive demand management program.
Despite the challenges on the supply side, we recorded exceptional operational and financial performance supported by demand growth and steady access to regional power imports enabling the supply of full demand for our Zambian and DRC markets. We continue to leverage growth driven by the increasing mining activity in the two markets. Our ability to meet the rising demand during this challenging period is testament to our operational excellence in delivering for our customers.
The generation from CEC Renewables’ solar power plants has been an important contribution to our sourcing portfolio, enabling us to meet the demand in the period effectively. One of the most notable developments during the period was the commissioning of the 60MW Itimpi one Solar Plant in April 2024 by our subsidiary, CEC Renewables. Being new, the Itimpi Solar plant has adopted latest technology, substantially improving on the power generation and financial capacity of CEC Renewables. Early performance to expectation by this solar plant, aided the payment of the first Green Bond coupon of USD 2.4 million in respect of the USD 53 million first tranche issued in 2023 under our USD200 million Green Bond term note program (TNP). This represents a significant step forward in our renewable energy agenda.
Prioritising safety remains at the core of our operations, as demonstrated in the reduction of lost time injuries to one during the period under review from two in 2023. Given the nature of our business, the safety of our employees, contractors and communities around us demands our full attention at all times.
Looking ahead, we remain committed to expanding our renewables footprint as our contribution to the diversification of the national energy mix. In line with this ambition, we have commenced work on the development of phase two of the Itimpi solar project involving construction of a 136MW PV solar plant. This project will be funded through the tranche two capital raise under the USD 200 million Green Bond TNP.
Furthermore, we remain committed to investing in the expansion and improvement of the capacity of the power infrastructure in our markets. These investments are essential to meeting growing demand and ensuring continuing reliable and efficient supply to customers. Infrastructure requirements are ever growing, demanding that governments adopt policies that attract both public and private capital in generation, transmission and distribution. As we move forward, we remain focused on leveraging our strengths, partnerships and opportunities to deliver continued value to our shareholders.”
Summary statement of profit or loss and other comprehensive income
Summary statement of financial position
Summary consolidated statement of cash flows
Summary statement of changes in Equity for the period ended 30 June 2024
Financial Highlights
Total revenue for the six months to 30th June 2024 was USD 227.8 million, 22% above the comparative period last year primarily driven by growth in our regional power supplies of 63%. Local power sales recorded some recovery, growing by 7% while wheeling revenue had a marginal growth of 2%.
Both the EBITDA and the profit for the period reduced by 62% from USD 184.3 million to USD 70.8 million and USD 113.0 million to USD 43.2 million respectively. The 2023 results included two one-off transactions: the debt write-back arising from the Debt Settlement Agreement reached with KCM (USD 171.6 million) and the impairment of our investment in Kabompo Hydro Power Company (USD35.4 million). The adjusted EBITDA is USD 74.5 million, compared to USD 60.5 million in 2023.
The cash balance at 30th June 2024 was USD 139.1 million compared to the balance of USD 83.8 million as at 30th June 2023.
Dividends
The CEC Group recognises the need to reward its shareholders with dividends in addition to share appreciation, which is a consequence of the financial and operational performance of the business. To this effect, our dividend policy provides for a pay-out of about 50% of the earnings, subject to the availability of cash and reserves, having provided sufficiently for working capital and other obligations. Similar to the financial year 2023 no dividend was declared and paid during the period under review.
Cautionary on Forward-looking Information
This summary results announcement contains financial and non-financial forward-looking statements about the Company’s performance and position. We believe that while all forward-looking information contained herein is realistic at the time of publishing this report, actual results in the future may differ from those anticipated. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause CEC’s actual results, performance, or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by these forward-looking statements. Although CEC believes that the expectations reflected in these forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. We take no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the statements have been made.
About the Company
CEC’s core business is the supply of power to the copper mines in the Copperbelt Province of Zambia and the DRC. CEC provides the transmission use of system and wheels power through its network on behalf of ZESCO Ltd and other users in Zambia and the Southern Africa Power Pool. ‘The Company operates a transmission interconnection with the DRC.
CEC has four incorporated subsidiaries and two associate companies – CEC Renewables (CEC-R), CECKabompo Hydro Power Limited (CEC-KHPL), CEC DRC Sarl, CEC-InnoVent South, InnoVent-CEC North and Power Dynamos Sports Limited (PDSL). CEC-R was incorporated as a platform for renewable energy expansion, designed to scale up the deployment of renewable energy across the Zambian Grid. CEC-DRC Sarl is a special purpose vehicle incorporated to secure the power trading segment and grow the Company’s interest in the DRC market, while PDSL is a special-purpose vehicle that runs Power Dynamos Football Club.
By Order of the Board
Julia C Z Chaila (Mrs.)
Company Secretary
