Remgro declares interim dividend despite drop in sales

Stellenbosch based investment firm Remgro on Thursday reported a decline in diluted headline earnings per share to 772.8 cents for the period ended December 2017, from 863.9 cents in 2016.

Remgro, which has an effective economic interest of 30% in Seacom, reported a drop in sales for the interim period to R14.0 billion, from R14.5 billion, however its trading profit climbed to R741 million, from R408 million before.

Net profit for the period declined to R4.1 billion, from R5.2 billion in 2016, while its intrinsic net asset value per share increased by 5.7% to R265.84 during the reported period.

The group declared an interim gross dividend of 204 cents (2016: 194 cents) per share.

Seacom provides high capacity international fibre optic bandwidth on the African continent. The company recently launched a new line of business where it sells directly to Enterprise customers called Seacom Business.

Remgro noted that Seacom Business added over 1,000 corporate customers in 2017 and over $22 million in new contract value.

Remgro’s share of Seacom’s profit amounted to R32 million (2016: loss of R18 million). “This increase is mainly due to improved results in South Africa and Kenya, as well as a once-off realisation of deferred revenue relating to the early termination of long term contracts,” it said.

Bloomberg recently reported that Remgro is in advanced talks to buy fibre provider Vumatel, as South Africa’s richest man seeks to consolidate the country’s expanding broadband infrastructure industry.

Read: Seacom deploys 100Gbps Ethernet technology

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Remgro declares interim dividend despite drop in sales