Remgro-controlled Community Investment Ventures Holdings’ (CIVH’s) subsidiaries Dark Fibre Africa (DFA) and Vumatel have made huge profits.
This emerged when the JSE-listed Remgro, which is the holding company of CIVH, today announced financial results for the six months ended 31 December.
CIVH’s contribution to Remgro’s headline earnings amounted to R184 million (2021: a loss of R23 million), the results show.
CIVH is active in the telecommunications and information technology sectors. It is the holding company of Maziv, a newly-created investment vehicle that holds CIVH’s interest in a group of companies of which DFA and Vumatel are its largest operating subsidiaries.
In its results, Remgro says Vumatel’s revenue for the period increased by 14.2% to R1.64 billion, compared to the prior period of R1.43 billion, driven by its fibre infrastructure expansion programme and subscriber uptake growth for the period.
It adds that Vumatel’s underlying operating earnings increased by 16.7% to R565 million for the six months to 30 September 2022 (30 September 2021: R484 million).
Vumatel is an open-access fibre-to-the-home (FTTH) provider and leases its infrastructure to internet service providers (ISPs) which, in turn, provide broadband retail internet services to end-customers.
According to Remgro, Vumatel is the FTTH leader in both the homes passed and connected homes market in South Africa, with market share of 36% and 34%, respectively.
“Vumatel remains a growth asset for the group, as it continues infrastructure expansion into identified lower living standards measure (LSM) areas and accelerating connections in both its traditional core network and lower LSM areas,” says the company.
It adds that DFA’s revenue from continuing operations for the six months ended 30 September 2022 increased by 10.5% to R1.3 billion (2021: R1.17 billion).
DFA’s underlying operating earnings from continuing operations increased by 112.8% to R647 million (September 2021: R304 million), with annuity income increasing to R210 million per month at 30 September 2022 (30 September 2021: R192 million per month).
“DFA is the premier open-access fibre infrastructure and connectivity provider in South Africa. It builds, installs, manages and maintains a fibre network to transmit metro and long-haul telecommunications traffic, which is leased to its customers (telecommunication companies and ISPs) using an open-access wholesale commercial model.”
Remgro notes DFA has in excess of 13 600km of fibre assets in the ground and owns fibre networks in Johannesburg, Cape Town, Durban, Midrand, Centurion and Pretoria, as well as other smaller metros, such as East London, Polokwane, Tlokwe, Emalahleni and George.
The JSE-listed holding company points out that as previously reported, Vodacom will, through a combination of assets of approximately R4.2 billion and cash of at least R6 billion, acquire up to 40% of the ordinary shares of a newly-created wholly-owned subsidiary of CIVH (namely Maziv).
It explains that Maziv will hold CIVH’s current interests in Vumatel and DFA. “As a result of the proposed transaction, Remgro's indirect interest in DFA and Vumatel will dilute with the entrance of Vodacom as a shareholder, but Remgro will also obtain an indirect interest in the assets contributed by Vodacom.”
The proposed transaction is still subject to various conditions precedent and regulatory approvals.
On corporate social investment (CSI) initiatives, Remgro notes that to date, Vumatel, together with its ISP partners, have connected 670 schools, 490 of which are in traditional core areas and 180 in lower LSM areas.
According to the company, 520 000 learners and 12 000 teachers have been positively impacted by this initiative.
It adds that Vumatel has partnered with content providers to primary and high schools, Splashlearn and Subjex, providing online subject support for CAPS and IEB curriculums, and iGogos, “Gogos with Vuma”, an initiative that teaches the elderly and carers to work with technology and understand the benefits of connectivity.
“These partnerships have allowed Vumatel to provide much-needed services catering for respective educational, community and economic needs,” it says.
DFA’s ongoing CSI focus is filling gaps in infrastructure development and bridging the digital divide in high-poverty areas.
The firm notes that one of the positive impacts is on providing student access to e-learning, and ultimately, new job creation and access to the economy.
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