The contribution to Remgro’s headline earnings from CIVH – the parent company of Vumatel and Dark Fibre Africa (DFA) – amounted to a loss of R197-million in the six months ended 31 December 2019, from a loss of R104-million in the same period a year ago.
Remgro, which has an effective 54.4% interest in CIVH through its Infrastructure division, revealed this in its interim results, published after markets closed in Johannesburg on Tuesday. Extrapolated out, this suggests CIVH turned in a headline loss in the six-month period of R286.8-million.
Despite the increase in losses, DFA’s revenue increased to R1.21-billion (2018: R1.06-billion) due to strong growth of 17% in annuity revenue, while earnings before interest, tax, depreciation and amortisation (Ebitda) grew by 19%.
“DFA’s contribution was negatively impacted by higher depreciation and finance costs as a result of the expanding network,” Remgro said.
Included in CIVH’s results were higher finance and transaction costs due to the acquisition of a further 65.1% stake in Vumatel in May 2019 as well as an increase in losses accounted for regarding Vumatel due to the additional equity stake acquired.
“Vumatel’s revenue and Ebitda increased by 74% and 109% respectively, but its results were also negatively impacted by higher depreciation and finance costs driven by the expanding network,” Remgro said.
Seacom pays dividends
Remgro also has a 30% stake in fibre operator Seacom (held separately to CIVH), but attracts a zero carrying value, meaning the group will only account for the company’s profits once these exceed the accumulated losses not accounted for in prior reporting periods.
However, Remgro received a dividend of R22-million from Seacom during the interim period, which led it to equity-account headline earnings of R9-million from the business. Remgro’s portion of Seacom’s headline earnings amounted to R21-million, from a loss in the same period in 2018 of R1-million.
“This increase is mainly due to positive growth in the traditional business, as well as a stronger performance in the service provider segment due to the inclusion of FibreCo,” it said. Seacom acquired FibreCo, a national fibre operator, in 2019. – © 2020 NewsCentral Media