Remgro’s earnings are back above pre-COVID-19 levels, due to improved performance by its investee companies, including its fibre entity Community Investment Ventures Holdings (CIVH).
The JSE-listed investment group today reported headline earnings more than doubled to R3.3 billion in the six months to end-December.
For the period under review, headline earnings increased by 139.3% from R1.4 billion to R3.3 billion, while headline earnings per share increased by 139.4% from 247.4 cents to 592.3 cents.
The increase in headline earnings, Remgro says, is mainly due to higher contributions from Mediclinic, Grindrod Shipping, TotalEnergies, FirstRand, CIVH (lower losses), Grindrod and RCL Foods, as well as lower finance costs.
On CIVH’s performance, Remgro says: “The results for the period under review were also positively impacted by lower equity accounted losses from CIVH and lower finance costs, due to the redemption of the exchangeable bonds.”
CIVH, led by CEO Raymond Ndlovu, is active in the telecommunications and information technology sectors, and houses Remgro’s other major operating companies, Dark Fibre Africa (DFA) and Vumatel, which construct and own fibre-optic networks.
DFA has deployed over 16 000km of ducting infrastructure in major South African metros, secondary cities and smaller towns.
Vumatel, which pioneered fibre-to-the-home in SA, has connected thousands of homes across Johannesburg, Cape Town and Durban to broadband internet.
In the six months under review, CIVH’s contribution to Remgro’s headline earnings amounted to a loss of R23 million (2020: a loss of R209 million).
Remgro says the decrease in losses is mainly due to the settlement of head office debt, resulting from two rights issues, and improved performances by the underlying businesses.
“The performance of the underlying businesses improved due to a 21% increase in revenue, coupled with cost reductions in the period under review, which resulted in improved operating earnings for the six months of R696 million (2020: R451 million).”
Remgro says DFA’s revenue increased by 18.2% to R1.4 billion (2020: R1.1 billion) mainly due to annuity income increasing to R192 million per month at 30 September 2021 (30 September 2020: R187 million per month).
In the same period, Vumatel revenue surged by 31.7% to R1.4 billion, driven by its fibre infrastructure expansion programme and subscriber uptake growth.
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