- Revenue decreased by 2%
- Gross profit increased to K66.915 million
- Regional power supply increased by 3% following an increase in the customer base
Lusaka Stock Exchange listed electricity generation, transmission, distribution and supply company, Copperbelt Energy Corporation (CEC) posted a mixed performance for the half year period ended 30 June 2020.
In a results publication for the six months period ended the company said revenue decreased by 2% from USD206.437 million in 2019 to USD201.857 million in 2020 mainly on account of a reduction in power demand by its mine customers in Zambia.
“When segmented, the revenue from local supply reduced by 2% on account of demand reduction following operational challenges by a number of mining companies as well as the effect of the KCM load transfer,” reads part of the statement.
However, revenue from wheeling services increased by 25% on the back of ZESCO’s reduced load shedding to non-mining customers relative to the comparable prior period. Regional power supply increased by 3% following an increase in the customer base.
Meanwhile gross profit increased marginally to K66.915 million from K64.023 million.
The company highlighted that new segment of use of transmission system was introduced following the transfer of the KCM load from local supply.
CEC also said “The continued KCM payment default has resulted in an increase in reported expected credit loss impairment of USD60.834 million from USD28.829 million in 2019 to USD89.663 million. As a result, the Company reported a loss of USD32.458 million for period, compared to a profit of USD7.832 million the prior year.”
The challenges in collecting value added tax refunds continued during the period and as at the reporting date, about USD17 million remained uncollected.
The company also said, “Despite the aforementioned challenges with respect to cash collections, a combination of factors including our prudent working capital management, the effect of the COVID-19 pandemic and cancellation or delayed implementation of projects or maintenance programs as well as cost containment measures, have resulted in cash flow from operations of USD19.235 million (2019: USD2.732 million) and a cash balance of USD89.098 million (2019: USD73.900 million). The cash balance is partly boosted by the restricted cash.”
CEC’s core business is the supply of power to the mines in the Copperbelt Province in Zambia, and Haut-Katanga and Lualaba Provinces in the Democratic Republic of Congo (DRC), where they work with SNEL (DRC’s state-owned power utility). CEC also provides wheeling services to third parties, including ZESCO Ltd (ZESCO), and operates the Zambian section of the interconnector into the DRC.
Equity Axis News