In compliance with the requirements of the Securities Act and the Listing Rules of the Lusaka Stock Exchange, CEC Africa Investments Limited announces its unaudited results for the period ended 30 June 2019.
Performance of the Group continues to be tempered by challenges faced in Nigeria where the operating companies are domiciled. These challenges included:
- Non-cost reflective tariffs perpetuated by the failure of the regulator to adjust tariffs to account for movements in pre-agreed economic and sector indicators;
- Mismatch between cost of energy increases and allowable tariffs by distribution companies resulting in a reduction of profit for distribution companies;
- Only partial implementation of the Power Sector Recovery Program.
- Non-payment of electricity bills by government agencies, a significant component of the Abuja Electricity Distribution Company Plc (AEDC) customer profile.
However, revenue compared to the same period in 2018 is up 33% mainly due to higher generation in Nigeria and improvements in collection rates at AEDC. North South Power Company Limited, an associate company contributed a profit of K32 million.
The Group loss for June 2019, worsened by 23% in Dollar terms and 56% in Kwacha terms on the 2018 results, on account of the depreciation of the Kwacha which had a 26% adverse effect on the results. Net finance costs saw a saving of 33% mainly due to the depreciation of the Kwacha.
Acquisition Facility from UBA at KANN
CEC Africa acquired its shares in Abuja Electricity Distribution Company Plc through its subsidiary KANN Utility Company Limited. The total amount paid for the 60% share acquisition was US$164million of which US$122million was provided by United Bank for Africa Plc (UBA) of Nigeria through a 7-year acquisition debt facility guaranteed by CEC Africa. In 2016, UBA issued a default notice to KANN based on the failure to meet certain agreed ratios and covenants, and subsequently in November 2018 UBA called the loan. However, discussions between UBA and a Nigerian power investor who has expressed interest in purchasing a stake in AEDC are progressing, and successful completion of this transaction will result in a restructuring of the loan.
Dividends proposed and paid
During the period under review, the Company did not declare nor pay any dividend.
By Order of the Board
Clara K Mvula
Head – Corporate Services
[email protected]
www.cecafrica.com
Related download
CECA | 2019 Interim financial results.pdf
