cec 2010 agm presentation
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CEC 2010 AGM presentation Financial Performance for the Year Ended 31st December 2010 & Corporate Development Update.TRANSCRIPT
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
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%
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
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
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
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
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
• 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
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
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
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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