- Revenue dropped by 3%
- Profit plunged by 78%
Harare – Lusaka Stock Exchange listed electricity generation, transmission, distribution and supply company with operations in both Zambia and Nigeria, Copperbelt Energy Corporation (CEC) posted a negative performance for the year ended 31 December 2019.
In 2019, Zambia was engulfed with a challenging business environment characterized by suppressed demand by the mining customer category, operational challenges which affected CEC’s largest customers, Konkola Copper Mines Plc (KCM) and Mopani Copper Mines Plc (MCM), and a countrywide power deficit which was as a result of low water levels in the country’s hydro reservoirs occasioned by poor rainfall in the 2018/19 hydrological year.
According to a results publication, total revenue for the company dipped by 3% from USD421.203 million in 2018 to USD408.272 million in 2019.
According to ZESCO, Zambia’s power supply deficit has grown by circa 20% since September to 810MW from 690MW in September and the country is now relying on short-term power imports from the Southern African Power Pool (SAPP) to plug the deficit.
This was attributed mainly to an 8% reduction in power demand by the mines as well as reduced wheeling services to non-mining consumers of 7%. However, the power trading revenue to regional customers grew by 25%.
Also, profit after tax stood at USD12.246 million compared to USD55.856 million in 2018, representing a decrease of 78%.
CEC however said there was an increase of USD53.335 million in net impairment provision, necessitated by the challenge of the KCM payment default.
Despite these challenges, the company said its DRC business segment continued on its upward trajectory during the year growing by 25% on a year-on-year basis
On the outlook, CEC said the supply of power to the mines remains the largest business segment by revenue and achieving stability in this segment by finalising future supply arrangements is a key priority for the Company.
CEC’s core business is the supply of power to the copper mines based on the Copperbelt Province of Zambia and some mining companies in the DRC in conjunction with that country’s state utility, SNEL. CEC wheels power through its network on behalf of ZESCO Ltd on the Copperbelt, and operates a transmission interconnection with the DRC.
CEC has five incorporated subsidiaries – CEC-Kabompo Hydro Power Limited (CEC-KHPL), CEC DRC Sarl, CEC-InnoVent South, InnoVent-CEC North and Power Dynamos Sports Limited (PDSL).
CEC-KHPL is the special purpose vehicle through which CEC is developing the 40MW Kabompo Gorge hydroelectric power project in Mwinilunga District of the North-Western Province of Zambia, while 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. PDSL is a special purpose vehicle which runs Power Dynamos Football Club.
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