CIVH, the Remgro-controlled parent of fibre operators Vumatel and Dark Fibre Africa, has turned profitable.
CIVH, in which Remgro holds a 57% stake, reported headline earnings of R47-million in the year ended 30 June 2022, compared to a loss of R435-million in the same period in 2021.
Remgro has also increased the intrinsic value it attaches to its stake in CIVH to R13.8-billion (as of end-June), up from R12.1-billion a year ago. That means the total intrinsic value attached to CIVH has risen to R24.1-billion, or slightly less than Telkom’s market capitalisation at the time of writing of R24.5-billion.
“The increase in earnings is mainly due to the settlement of head office debt, resulting from two rights issues, and improved performances by the underlying businesses,” Remgro said of CIVH in its full-year results, published before markets opened in Johannesburg on Tuesday.
“The performance of the underlying businesses improved due to a 14.8% increase in revenue despite greater market competition,” Remgro said. CIVH also experienced “some macroeconomic pressure in terms of customer relocations, customer defaults and an increased collection risk”.
Dark Fibre Africa revenue increased by 4.1% to R2.5-billon, mainly due to annuity income increasing to R198-million/month as of 31 March 2022, from R192-million/month a year earlier. Vumatel’s revenue increased by 26.3% to R3-billion, driven by subscriber growth.
Read: Richard Came’s Platform Investment Partners exits CIVH
Remgro said a plan for Vodacom to acquire up to 40% of CIVH’s fibre assets – through a new business called Infraco – is still on track. Vodacom will provide assets to the new entity worth R4.2-billion and invest at least R6-billion in cash.
Read: Richard Came’s Platform Investment Partners exits CIVH
As a result of the proposed transaction, Remgro’s indirect interest in DFA and Vumatel will be diluted, though Remgro will obtain an indirect interest in the assets contributed by Vodacom. The transaction remains subject to regulatory approvals, including by the Competition Commission. – © 2022 NewsCentral Media
