Copperbelt Energy Plc has signaled to the market that it expects to record lower earnings for the financial year 2019 due to unpaid receivables from one of its largest mining customers, according to a statement from the company.
“In accordance with the Lusaka Securities Exchange Limited Listings Requirements, the Board of Directors of the Copperbelt Energy Corporation Plc advises the shareholders of CEC that for the twelve months ended 31st December 2019, the basic earnings per share is expected to be 78% lower than those for the twelve months ended 31st December 2018”, read a statement issued by the company secretary, Julia C Z Chaila, on behalf of the power company’s Board of Directors on Wednesday 27 May 2020 in Lusaka.
CEC, who until recently (Q1 2020) had a Bulk Supply Agreement with the national power utility that spanned 23 years, has been in contention with Konkola Copper Mines, who is currently under the administration of a provisional liquidator. According to press statements on the court filings, “Konkola Copper Mines has been fighting to keep the lights on after Copperbelt Energy Corporation threatened to reduce supply because of a $132-million bill”.
The $132 million debt is part of the reason that accounting rules must apply regarding their recognition. “The movement in earnings is primarily attributed to the provision of impairment loss on trade receivables in compliance with IFRS 9”. This is not the first time that company has recorded an impairment. “Compared to 2018, the impairment provision in 2019 was higher because of payment default by the Company’s largest customer, Konkola Copper Mines Plc. Shareholders are advised that the information contained in this trading statement has not been reviewed or reported on by the external auditors of the Company”.
This SENS announcement is an indication that the external auditors are done with their work and management is bracing itself to present their 2019 financial year-end results. “The Company expects its results for the 12 months ended 31st December 2019 to be released on SENS and published in the local media on or about 28 May 2020”.
The company’s share price now trades at 99 ngwee per share.