CIVH, the Remgro-controlled parent of fibre infrastructure providers Vumatel and Dark Fibre Africa (DFA), reported headline earnings of R322.8-million in the six months to end-December 2022, an analysis of Remgro’s interim results published on Thursday shows.
CIVH’s contribution to Remgro’s headline earnings amounted to R184-million, from a loss of R23-million in the same period the year before. Remgro holds 57% of CIVH’s equity.
“The increase in earnings is mainly due to improved performances by CIVH’s underlying businesses,” Remgro explained in notes alongside its interim results.
“The performance of the underlying businesses, being mainly DFA and Vumatel, improved due to the network expansion over the last two years, resulting in improved operating earnings of R1.2-billion (2021: R696-million),” it said.
The improved performance builds on the headline earnings of R47-million CIVH reported in the year ended 30 June 2022. That number compared to a full-year loss of R435-million in 2021.
In the latest six-month period, DFA’s revenue from continuing operations increased by 10.5% to R1.3-billion, while underlying operating earnings from continuing operations increased by 112.8% to R647-million.
Vumatel’s revenue increased by 14.2% to more than R1.6-billion, driven by its fibre infrastructure expansion programme and subscriber growth. Underlying operating earnings increased by 16.7% to R565-million, Remgro said.
CIVH is operationally cash generative and continues to reinvest any excess operating cash flow and capital into expanding its operations and network footprint, with a continued principle of limiting overbuild in key markets, it added.
Vodacom deal
“Vumatel is the fibre-to-the-home leader in both the homes passed and connected homes market in South Africa, achieving a market share of 36% and 34% respectively. Vumatel remains a growth asset for the group as it continues infrastructure expansion into lower LSM areas and accelerates connections in both its traditional core network and lower LSM areas.”
The financial disclosures come as Remgro awaits approval from the Competition Commission to sell a 30% stake in CIVH subsidiary Maziv – which holds the Vumatel and DFA entities – to Vodacom South Africa.
Vodacom plans to contribute R4.2-billion in fibre assets it owns to the merged entity while paying at least R6-billion to acquire equity. It has an option to increase its stake in Maziv from 30% to 40% in the near term.
Read: Raymond Ndlovu resigns as CEO of CIVH
“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,” Remgro said. – © 2023 NewsCentral Media
