Rain is on course to achieve earnings before interest, tax depreciation and amortisation (Ebitda) of more than R2-billion for the year ended February 2023, after considering IFRS 16 adjustments, “as is industry practice”, one of its largest shareholders said on Thursday.
African Rainbow Capital (ARC) Investments disclosed Rain’s full-year Ebitda number in its interim results for the six months ended 31 December 2022.
At the same time, ARC Investments has kept the value of its stake in Rain unchanged from September, when it reported its full-year results to June 2022, valuing 100% of the wireless data provider at R17.9-billion, or about the same as JSE-listed Telkom, which had a market capitalisation of R18-billion at the time of publication.
ARC Investments holds 20.3% of Rain, which in turn makes up 26.6% of the ARC fund’s value, the company disclosed. It retained the value of its 20.3% stake in Rain at R3.635-billion.
“The sector outlook remains positive after the successful spectrum auction and the potential consolidation of market players,” ARC Investments said in notes accompanying its financial results on Thursday.
In January, Rain and Telkom walked away from a transaction that could have seen the JSE-listed telecommunications operator buying the wireless broadband upstart. Earlier early-stage talks between MTN Group and Telkom also collapsed.
Mobile service
“Rain is well positioned as a low-cost data provider that already has spectrum in contested areas. The acquired spectrum will allow Rain to improve its coverage at a comparatively low cost,” it said.
ARC Investments also disclosed that Rain plans “soon” to launch a mobile service, utilising the newly acquired spectrum. Rain spent R1.4-billion in communications regulator Icasa’s spectrum auction last year to acquire 20MHz of bandwidth at 700MHz and 20MHz of bandwidth at 2.6GHz. – © 2023 NewsCentral Media
