Zambian investments holding group ZCCM reported a full-year loss after tax of K987-million for the year ended March 31, 2015.

At the company level, the loss was K639-million in 2015, which was a significant reversal from the profit of K893-million it made in 2014. The group says that a major factor that impacted its performance last year was the copper price, which continued to decline, falling from $6 289/t in 2014 to $4 701/t in 2015.

As a result, dividend income was only K45-million in 2015, compared with K803-million in 2014, amid reduced revenues and production in most of ZCCM’s investee companies.

Further, ZCCM reported a group operating loss of K2.2-billion in 2015, compared with an operating profit of K871-million in 2014.

The group notes that the operating loss in 2015 was mainly as a result of an impairment loss of K2.1-billion, recognised in respect of amounts receivable from the Konkola Copper Mine (KCM) of $94.9-million and the Lubambe Copper Mine (LCM) of $93-million.

A further impairment of K513.8-million was recorded, as a result of a decline in the fair value of the investment in KCM “in view of continued challenges at the mine”.

LCM reported revenue for the financial year ended March 31, 2015, of $164.7-million, which was a decrease from the $237-million recorded in 2014. It also reported a loss for the same period of $78-million, compared with $39-million in 2014.

Meanwhile, KCM reported a net loss of $178.5-million for the financial year ended March 31, 2015, compared with a $89.2-million loss in 2014.

Revenue reported for the year was $1-million, which was down 15% from the $1.2-million achieved in 2014. The group attributed this to a decline in the sale of copper and copper-related products.

ZCCM notes that its core assets lie in the mining sector, comprising 80% to 90% of its portfolio. “Copper prices have continued to be depressed in the recent past, and the recovery is slow. The copper price has recently shown some recovery; however, it is expected that the impact on revenue will be slow.”

Hence, the group intends to move away from relying on passive income and being dependent on mining by embarking on diversification of its investment portfolio by actively exploring investment opportunities in other sectors such as energy, agriculture and real estate to ensure it can “create and maximise shareholder value”.

“For instance, in energy, the Maamba thermal power project is expected to be completed in June this year. ZCCM owns 35% of Maamba Collieries and along with our partner we have invested about $850-million at Maamba Collieries into this thermal power plant, which will be producing 300 MW of power,” ZCCM points out.

Further, the recapitalisation of ZCCM’s Ndola Lime company has advanced with the project undergoing hot commissioning. ZCCM says it is reviewing the operations of Ndola with a view to streamlining its operations and make it “competitive and efficient”.

As part of diversification into real estate, ZCCM highlights that it recently acquired an investment property that will be leased out to generate passive income. ZCCM reveals that it has also been identifying a number of “strategic legacy properties” with a view of bringing them to use and turning them into income generation projects.

Further, ZCCM reports that it is currently looking for strategic partners to invest in agricul-tural projects.

“These are some of the efforts aimed at reducing dependence on revenue from the copper industry and mitigating the impact of its cyclical nature,” the group concludes.