CIVH, the parent of Vumatel and Dark Fibre Africa, reported a 96.7% plunge in headline earnings in its latest six-month reporting period as high interest rates took a toll on the debt-laden fibre company.
This is according to Remgro, which holds 57% of CIVH’s equity. Remgro reported its interim results for the period ended 31 December 2023 on Tuesday.
CIVH’s contribution to Remgro’s headline earnings amounted to R6-million, down from R184-million in the same six-month period a year ago. Extrapolated out, that means CIVH reported total headline earnings of R10.5-million, down from R323-million previously.
“The decrease in earnings is mainly due to higher finance costs resulting from increased interest rates,” Remgro said. CIVH’s two main assets are Vumatel, which operates South Africa’s largest fibre-to-the-home broadband network, and Dark Fibre Africa, which provides wholesale and business fibre networks and services.
“The group remains operationally cash generative, albeit not at the same levels as in prior periods due mainly to the higher financing costs. Reinvestment of free cash flow into expansion of its operations and network is strategically managed and lower than prior period to preserve balance sheet strength against the backdrop of the macroeconomic challenges being experienced locally,” Remgro said.
Vumatel, DFA
Vumatel revenue for the six months to 30 September 2023 increased by 11% to R1.8-billion, driven by its fibre infrastructure expansion programme and subscriber growth, Remgro said.
The Reach network – aimed at lower-income households – expanded by 11%, with Reach homes passed exceeding a million and Reach subscribers increasing by 20%.
Read: New twist in Vodacom, Vumatel saga
Dark Fibre Africa’s revenue for the six months to 30 September 2023 increased by 3% to R1.3-billion. – © 2024 NewsCentral Media