As per the requirement by the Securities Act No. 41 of 2016 and the Listings Requirements of the Lusaka Securities Exchange, AEL ZAMBIA PLC announces the audited financial results for the year ended 31 December 2020. With the impact of Covid-19 clearly cited to have adversely affected the performance of the company in the just ended financial year, this shows how wide and far-reaching the pandemic has been. This article has evaluated the performance AEL ZAMBIA PLC in the just ended financial year in relation to the year ended 31 December, 2019.
A nominal look at the figures from both 2020 and 2019 financial years shows that there was actually an increase in revenue by approximately 22% from K 655,052M in the prior year ended December 2019 to K 798,498M in the just ended financial year of December 2020. Profit after the tax value of K44,586M, equally increased by approximately 57% from the K 71,239M recorded in the prior year to K111,662M recorded in the just ended year 31 December 2020. However these values might be a bit misleading as they overstated the actual performance of the company. The majority of the company’s customers are invoiced in US dollar and looking at how much value the domestic currency has lost against the US dollar, it would be easy to see how the Kwacha values have been inflated. By the end of the corresponding year 2019, the Kwacha was trading at slightly above K14/US$ and by the end of the year 2020, the domestic currency depreciated against the US dollar by more than half; trading slightly above K21/US$. In actual dollar terms the company revenue was reduced by $117,65.71M from the dollar revenue of $46,789.43M made in the financial year ended 2019 to $38,023.71M made in the just ended financial year.
On a more positive note, the company managed to increase its total assets from K537,949M in the year ended 2019 to K766,952M in the just ended year. This is a great move on the part of the company, seeing that there is too much uncertainty in the business environment especially where the Kwacha performance is concerned. Increasing assets provide more stability to the ‘life’ of the company. AEL ZAMBIA also managed to record a positive Cash and cash equivalents, of K235,923, at end of the period and the Board of Directors proposed the amount of dividends to be paid out. The Board of Directors has proposed a final dividend of K 0.84 in addition to the interim dividend paid in November 2020 of ZMW 4.30 per share. The Board has also proposed a special dividend of K 2.90 per share. The interim dividend in 2019 for the same period was K 2.0 per share.
Moving forward, the company seems a bit skeptical about the business environment, seeing how the pandemic is still impacting business operations. However, there is some expressed form of optimism with regard to the generation of revenue, mostly informed by how commodity prices have continued going up on the international market.
