Seacom has reported a headline loss of R30 million for the six months ended December 2012, from a loss of R75 million during the same period in 2011.
In reporting its results for the interim period ended December 2012, Remgro said its share of this loss in Seacom amounted to R7 million, from a R19 million loss in 2011.
Overall, for the period under review Remgro said that headline earnings decreased by 35.1% to R1.719 billion, while headline earnings per share also decreased by 35.1% to 334.4 cents.
However, excluding the effect of the once-off items relating to Mediclinic’s refinancing transaction, headline earnings increased by 18.6% to R3.142 billion, while headline earnings per share also increased by 18.6% to 611.2 cents
Remgro declared an interim gross dividend of 145 cents (2011: 126 cents) per share.
Remgro’s technology interests primarily represent the interests in the CIV group of companies and the investment in Seacom. For the period under review the CIV (Community Investment Ventures) group contributed R34 million to Remgro’s headline earnings, from R37 million in 2011.
Remgro has an effective interest of 25.0% in Seacom which launched the first undersea fibre-optic cable to connect Southern and Eastern Africa with Europe and Asia in July 2009.
Seacom remains cash flow positive and Remgro said it received dividends of R59 million during the period under review, bringing the cumulative dividends received since the acquisition of VenFin Limited to R239 million.
“Delays with the implementation of the cable through Egypt, have resulted in additional unforeseen operational costs which are not expected to recur in future. Seacom maintains a proactive approach to ensuring profitability, by implementing various initiatives to cut back on costs,” Remgro said.
With the arrival of WACS (the West African Cable System), a competitor to Seacom in sub-Saharan Africa, and recent upgrades to the EASSy system, its East coast competitor, increased supply continues to drive regular price declines into the market, Remgro further noted.
“Fortunately with affordability improving, demand elasticity is playing its part positively ensuring that demand grows above expectations,” Seacom’s investor said.