THE Zambia Consolidated Copper Mines-Investment Holdings (ZCCM-IH) posted an operating profit of K530 billion in 2011 from K47 billion in 2010, due to a favourable economic environment and high commodity prices.
The group also recorded a profit before tax of K1, 530 billion during the same year as compared to K855 billion in 2010.
ZCCM-IH executive chairperson Willa Mung'omba said due to the increase in copper prices, the group increased its profitability in 2011, recording an operating profit of K530 billion compared to K47 billion in the previous year.
Mr Mung'omba said during the period under review, the group performance benefited from a stable business environment as well as favourable business condition in China and globally, thereby influencing the commodity prices.
"For the group, the increase in copper prices encouraged continued scaling up operations and a relatively stable Zambian Kwacha. The overall impact of all this was that the group significantly increased its profitability in the 2011 financial year," he said.
Mr Mung'omba said during the ZCCM-IH annual general meeting in Lusaka yesterday that the high commodity prices impacted positively on the revenue of most of the companies which continued to record profitability.
As a consequence of the significant share of profits of associates and the favourable economic and business environment, the group reported a profit before tax of K1, 530 billion from K855 billion in 2010," he said.
Mr Mung'omba said in his statement to the board members that the group recorded sales of K396 billion in the year under review from K142 billion in 2010.
While the group registered positive retained earnings of K2,005 billion in 2011 from K571 billion the previous year driven by share of profits of associate, it recorded negative retained earnings of K628 billion in 2011 to K966 billion.
Mr Mung'omba said in the period under review, ZCCM-IH took up 20 per cent shareholding in Konnoco, this was in line with the provision of the Konnoco agreement of 1997.
He said ZCCM-IH owns 20.6 per cent of the shares in Konkola Copper Mines, while Vedanta owns 79.4 per cent.
Mr Mung'omba said in its continued efforts to diversify to other minerals, the company accepted an offer to purchase 50 per cent of the shares of Kariba Minerals Limited from the Government during the financial year, saying the transaction was expected to be completed during the financial year ending March 31, 2013.
Kariba Minerals Limited is in line of business prospecting, mining, processing and marketing of amethyst and any such other precious and semi-precious stones.
During the period under review, copper prices on average rose from around US$3 per pound at the beginning to US44.27 per pound at the close of the financial year.