By SANFRONSSA MANYINDA
THE Copperbelt Energy Corporation (CEC) suffered a reduction of 54 percent in profit in 2019 due to the US$153.1 million debt payment default by Konkola Copper Mine (KCM).
CEC chairman, London Mwafulilwa, said the default had the most telling effect on the financial performance of the company.
“Of the many hurdles the business experienced, the KCM payment default, by far, had the most telling effect on the financial performance; leading to a reduction of 54 percent in profitability over 2019,” Mr Mwafulilwa said.
This is contained in the CEC 2020 annual report.
Mr Mwafulilwa however said CEC would pursue growth at home and in other geographies to boost the growth strategy and was able to return US$34.1 million to its shareholders in dividend distribution.
He said the upward trend in growth in the Democratic Republic of Congo (DRC) market was maintained despite suffering artificial transmission path constraints.
Mr Mwafulilwa said reinforced marketing and stakeholder relationship management activities being stirred by the company’s DRC company, CEC-DRC Sarl, had continued to gain traction.
The report stated that the diversification of the company’s supply sources had been top of the agenda as it sought to firm up the supply side.
According to the report, the company started taking power from two Independent Power Producers – Lunsemfwa and the Dangote thermal power plant.
The two sources, while relatively small, were a good addition to the company’s supply portfolio.
The report stated that the company met its financial and operational objectives.
This was despite the lingering KCM debt, the declaration of the entire transmission and distribution lines as common carrier.
Other difficulties cited were challenges getting back to the negotiating table to agree the contractual matters involving CEC, KCM and Zesco.
“I am proud to report that the company remained focused on its mandate of providing quality energy solutions to our customers led by the mining industry, the anchor of our country’s economy.
“On the back of a challenging business environment compounded by unprecedented market developments which upset the norm and threatened business continuity,” Mr Mwafulilwa said.
The report also revealed that the performance in the company’s DRC market was steady at 6.8 percent revenue growth.
The business was able to return US$34.1 million to its shareholders in dividend distribution