Subsea cable operator Seacom’s revenue contribution to JSE-listed investment holding company Remgro has suffered a considerable dip.
This emerged when Remgro today announced its financial results for the six months ended 31 December.
Remgro has a 30% shareholding in Seacom, with the other shareholders being IPS (30%), Sanlam (15%), Convergence Partners (15%) and founder Brian Herlihy (10%).
In its results, Remgro says Seacom’s contribution to headline earnings during the period amounted to R2 million (31 December 2023: R32 million).
According to the investment holding company, the decrease in earnings is mainly due to once-off cable repair costs.
Seacom launched Africa’s first broadband submarine cable system along the continent’s southern coasts in 2009.
The 17 000km cable connects South Africa, Mozambique, Tanzania, Kenya, Djibouti, France and India, facilitating enhanced internet access between Africa, Europe and Asia.
The Remgro financial results come after the submarine cable operator recently suffered multiple cable breakages in the Red Sea, which impacted connectivity across Africa.
At the time, Seacom said the location of the cable break was significant due to its geopolitical sensitivity and ongoing tensions, making it a challenging environment for maintenance and repair operations.
Last year, Seacom also experienced a subsea internet cable fault near the coastal town of Mtunzini in South Africa.
Seacom CEO Alpheus Mangale recently cautioned that the expansion of global submarine cables has not been matched with the necessary security measures, leaving these critical networks increasingly vulnerable.
He explained that subsea cables might be engineered for durability but are far from invincible.
“Fishing trawlers, ship anchors and dredging cause more than 70% of failures, making maritime activity the most significant threat.
“Natural disasters like earthquakes and underwater landslides also pose risks. A recent rockslide near Côte d'Ivoire severed four major cables, disrupting connectivity in 13 West African countries.”
Mangale added that geopolitical tensions further compound these risks. “More cables don’t necessarily mean better security. A single, well-placed cut can still wipe out internet access across entire regions, emphasising the need for stronger protection measures.”
Meanwhile, Remgro says the first half of the 2025 financial year saw a positive trend in delivering against the firm’s stated strategic focus of disciplined capital allocation and active partnership to drive performance in its underlying portfolio companies.
For the period under review, headline earnings increased by 38.7% from the restated R2.6 billion to R3.7 billion, while headline earnings per share increased by 38.6% from the restated 485 cents to 672 cents.
Remgro's intrinsic net asset value per share increased by 10.3% from R251.01 at 30 June 2024, to R276.89 at 31 December 2024.
The company also paid a final dividend for the year ended 30 June of 184 cents per share during November 2024.
The closing share price at 31 December 2024 was R155.10 (30 June 2024: R136.09), representing a discount of 44% (30 June 2024: 45.8%) to the intrinsic net asset value, says the company.
“Notice is hereby given that an interim gross dividend of 96 cents (31 December 2023: 80 cents) per share has been declared out of income reserves in respect of both the ordinary shares of no par value and the unlisted B ordinary shares of no par value, for the six months ended 31 December,” says Remgro.
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