cec agm financial performance pres 31 mar 11
DESCRIPTION
Copperbelt Energy Corporation AGM Financial performance pres 31 Mar 11TRANSCRIPT
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Presentation to Annual General Meeting
Financial Performance for the Year Ended 31st December 2010
& Corporate Development Update
Michael J TarneyManaging Director – Corporate Development & CFO
Copperbelt Energy Corporation
31st March 2011
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Income StatementHighlights
– Gross profit increased by 8.3%
• Load growth and tariff indexation
– Operating expenses increased by 15%
• Personnel expenses increased by 35.5%
• Other operating expenses reduced by 30%
• Depreciation increased by 14%
– EBITDA increased by 6%
– Earnings after tax increased by 7%
– Note: Breakdown of earnings:
• Hedging benefit 20%, Telecoms 7%, Core Business 73%
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Other Highlights
– Working Capital
• Negative working capital position of $7.1m
• $10m facility agreed with Citi
– Fixed Assets - $239m at 31st December
• $13.8m spent during the year including
– $4.0m primary, $3.2m secondary equipment, incl. $2.5m on power factor correction
– $1.4m Kabompo Gorge Hydro
– $2.3m optical fibre installation
– Gearing
• $32.1m debt
– Share Price
• ZMK 615 per share at year end, 43% increase
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Key Business Issues• Mines are doing well
– Growth in sales volume both CEC and ZESCO customers
• Tariffs are not cost reflective– Sales price US4.5 to 5.0 Cents
currently– New generation – US 10 to 12 Cents
cost incl. transmission
• Investment is increasing:– Capex of $13.8m 2010 vs ~$3m a
decade ago– New project pipeline developed
requires increasing rate of investment
• Market is de-regulating– Power shortages driving new
investment in generation, transmission– CEC well placed to operate / invest in
new projects
• Key priorities:– Increase tariffs– Re-capitalise business
• Debt - maintain credit rating• Equity – rights issue / co-investors at project
level
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2nd Zambia – DRC
Interconnector Project
• Strategic SAPP project
• Design and tendering process completed
• Permits 500MW firm power to flow into SAPP
• Investment of $12m
• Pursuing long term financing with development institutions
• PPA with SNEL signed for on-sell of 50MW into SAPP
Existing 220kV Line
N
Democratic Republic
of Congo
Republic
of Zambia
Luano
Substation
Chingola Town
Chililabombwe
Town
Kafue River
Proposed
Line Route
Border crossing
point
Michelo
Substation
Zambian section of the Second Zambia-DRC Interconnector
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Kabompo GorgeHydro Summary
– Implementation Agreement drafted
• OPPPI, ZDA, ZRA, ERB consents underway
– Detailed Tendering Stage:
• 5 contractors shortlisted
• Final bids expected 3rd Quarter of 2011
– Final report submitted to ECZ
• Commencement of RAP activities
– Financing activities have commenced
• SPV structure recommended, non-recourse debt – total cost incl. transmission ~$170m
– Site preparation
• Establishment of town, road, grid connection
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Luapula Hydro and TransmissionProjects Summary
– Project comprises
• 5 Hydro Sites on Luapula River
• HV line from Copperbelt to Mansa, other areas of Luapula
– Generation capacity >800MW
– MoU for development process under discussion
– DRC Minister of Energy letter of support received
– Next step - studies of environmental and river scheme design
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• CEC fibre networks spans over 770km – presence in Lusaka, Copperbelt, Lumwana, Kabwe, Livingstone, Solwezi
• Focus so far on investment in metropolitan areas
• Revenue grew from $0.3m in 2009 to $1.4m in 2010, in 2011 expected to grow close to $3.0m
• Network Services Licence - ZICTA
• 50% JV Realtime – drives sales and customer service
• New strategic partnership in fibre business shortly to be announced
– Increased fibre roll-out, circa 1000km in 2011
Telecommunications Interests
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Newly formed business unit of CEC
Vision:To be the leading and natural partner for the development of renewable energy infrastructure in Africa through establishing strategic partnerships
Mission:We are committed to building capacity in varied renewable technologies and project development methodologies to commercially exploit the conditions prevailing at renewable energy infrastructure development sites
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Portfolio of Current Technologies and Projects
Collaboration with CFC on use of Copperbelt wood processing waste ;use of wood to be harvested at Kabompo Hydro site
Establishment of a 1 million litres per annum biodiesel refinery
Provision of power to workers’ compound and offices at Kabompo hydro site
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Contact Details:
Michael J. TarneyManaging Director – Corporate DevelopmentCopperbelt Energy Corporation PLC37B Cheetah RoadKabulongaLusaka – ZAMBIATel: +260 211 261647Fax: +260 211 261640Cell: +260 966 990006E-mail: [email protected]
Website: www.cecinvestor.comCompany E-mail: [email protected]: +260 211 261647
Public Relations:Chama KalimaTelephone: +260 212 244914E-mail: [email protected]
Investor Relations:Clara MusamaTelephone: +260 212 244916E-mail: [email protected]
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