Fibre infrastructure provider Dark Fibre Africa (DFA) reported a 15% year-on-year improvement in revenue to R468m in the six months ended 30 September 2014, shareholder Remgro has revealed.
The growth was mainly as a result of a 31% improvement in annuity revenue.
Remgro revealed that the future value of the company’s current annuity contract base is in excess of R8,5bn.
Remgro’s investment in DFA is through Community Investment Ventures Holdings.
DFA’s earnings before interest, tax, depreciation and amortisation for the period increased by 16% to R344m, according to Remgro. The current book value of the fibre-optic network is in excess of R4,7bn.
“DFA has thus far secured a healthy annuity income in excess of R65/ month, with the majority thereof being on long-term contracts with customers,” Remgro said.
“The company lowered its average cost of funding through the refinancing of its debt of R3,5bn with a consortium of lenders from a project finance structure to a more corporate debt-type structure consisting of R2,5bn of long-term debt and R1bn of short-term debt, effective June 2014,” it said.
The focus for future growth will be on the business market and the public sector, which have “shown a definite increase in demand in the past 12 months”.
DFA has over 1 700 enterprise market links and developed new products to meet the demand of the enterprise market, Remgro said.
But slow construction of last-mile networks has affected the company’s ability to connect base station sites and business customers to its fibre network, causing a delay in annuity revenue generation to offset increasing depreciation and finance charges incurred in rolling out infrastructure.
To mitigate against this, DFA acquired Conduct Telecommunications in April last year. Conduct specialises in last-mile fibre and has rolled out infrastructure to 1 718 buildings and 4 500 end users.
According to Remgro, DFA owns fibre network rings in Johannesburg, Cape Town, Durban (expanding to Pietermaritzburg), Midrand, Centurion and Pretoria. During the past 12 months, the network has been expanded to a further 17 smaller metros, including East London, Polokwane, Tlokwe, Emalahleni and George.
At 30 September 2014, a total distance of 7 910 km of fibre network has been completed.
DFA is also part of a consortium that will provide fibre connectivity to the Gauteng provincial government and schools and is in the process to connect the first 100 schools, Remgro said. – © 2015 NewsCentral Media
