CEC RECORDS LOSS IN THE FIRST HALF 2016 AS LIQUID TELECOM WAREHOUSE YARD GUTTED

Fire on Sunday swept through the Copperbelt Energy Corporation (CEC) Liquid Telecom’s warehouse yard in Lusaka’s Leopards Hill Road.

And COPPERBELT Energy Corporation has posted net losses of over K1.6 billion for the half-year period ending June 30, mainly driven by exchange rate losses and reduced power sales, its group results reveal.

The property belongs to CEC and houses its telecoms subsidiary, CEC Liquid Telecom’s warehouse.

CEC Liquid last year secured debt facilities of USD16m to undertake the construction of a fibre optic network within the main commercial centres in Zambia. It also provides two international links through Zimbabwe to South Africa which connects into international fibre cables linking to other African countries and other continents.

 The fire was contained outside where it completely burnt ducting used for the company’s Gigabit-capable Passive Optical Networks (GPON) project stored in the yard. The fire did not penetrate the warehouse.

Investigations to determine the cause of the fire which started before noon, are on-going.

At this stage, the value of the lost property remains unknown, the assessment of the loss is still being made and the damage is yet to be quantified.

The property was insured and services being provided by CEC Liquid Telecom will not be affected.

Combined forces of the Lusaka City Council fire brigade and the Zambia Air Force managed to put out the fire around 14:00hrs.

Meanwhile COPPERBELT Energy Corporation has posted net losses of over K1.6 billion for the half-year period ending June 30, mainly driven by exchange rate losses and reduced power sales, its group results reveal.

According to the group’s consolidated unaudited financial results for the half-year period ending June 30, CEC Plc posted increased losses of K1.6 billion during the period under review, up from K570.6 million in the prior period, mainly driven by exchange rate losses arising from the devaluation of the Nigerian Naira, among other factors.

CEC Plc acquired an interest in the Abuja Electricity Distribution Company (AEDC Plc) of Nigeria through KANN Utility in August 2013, with takeover of operations on November 1, 2013.

“Revenue at half-year increased by 40 per cent from K2.252 million to K3.776 million. This is mainly on account of increased power sales to the DRC mines and increased sales at the telecoms unit. Net loss of K1.669 million compared to a net loss of K571 million the previous period,” CEC stated.

“Net loss is mainly attributed to an exchange loss of K1.140 million (US $107 million) arising from the devaluation of the Naira on USD borrowing and bad debt provision of K516 million (US $52 million).”

CEC, however, recorded profits of K275 million from its Zambian business compared to K225 million posted in the prior period last year.

“The Zambian businesses on a consolidated basis posted a profit of K275 million (US $25.9 million) compared to K225 million for the previous period. The increase in profitability is mainly attributed to increased power sales to the DRC mines and increased sales at the telecoms unit,” it stated.

CEC also stated that low copper prices on the international market had affected Zambian mining companies’ operations, which in-turn negatively impacted power sales.

“The challenges relating to low commodity prices on the global market have led to some of our customers scaling back on their operations with the effect that our power sales are down by about 16 per cent,” stated CEC.

“We expect higher demand to return mid to end 2017 when projects that a number of our customers have been implementing begin to draw power. Further, loss of sales on the Zambian market during this period has been more than made up for through our power sales to the DRC market.”