Dark Fibre Africa (DFA), which constructs and owns fibre-optic networks, has reported a 15% rise in revenue for the six months ended September 2014 to R468 million, on the back of 31% growth in annuity revenue.
This according to investment holding company, Remgro, which has an effective interest of 43.8% in the CIV group which is active in the telecommunications and information technology sectors.
Taking into account Remgro’s direct interest of 23% in DFA, Remgro has an economic interest of 49.7% in the net asset value of the group.
DFA’s earnings before interest, tax, depreciation and amortisation increased by 16% to R344 million, while the book value of it’s fibre-optic network is in excess of R4.7 billion, the group said.
DFA said it secured a healthy annuity income in excess of R65 million per month with the majority being on long-term contracts with customers.
The company said it lowered its average cost of funding through the refinancing of its debt of R3.5 billion with a consortium of lenders from a project finance structure to a more corporate debt-type arrangement consisting of R2.5 billion of long-term debt and R1 billion of short-term debt.
DFA said it has experienced delays in wayleave approvals by the local councils planning their own fibre network.
Most of DFA’s customers extended their initial contract periods of five years to either 10 or 15 years.
The group owns fibre network rings in Johannesburg, Cape Town, Durban (expanding to Pietermaritzburg), Midrand, Centurion and Pretoria.
During the past twelve months, the network has been expanded to a further 17 smaller metros, including East London, Polokwane, Tlokwe, Emalahleni and George to name a few, it said.
DFA has 6,290 (March 2014: 5,618) base transceiver station sites on the network that cover three of the four mobile operators.
The company also initiated the deployment of proof of concepts Fibre to the Home (FTTH) projects in selected suburbs in Johannesburg.
It has signed commercial lease agreements with 64 (March 2014: 56) customers that have Electronic Communication Network Licences ranging from the largest incumbents, to banks, to small niche operators.
“The revenue model is flexible to adapt to the customers’ needs, and DFA either sells an indefeasible right of use agreement which is a lump sum in advance, or on an annuity basis with multi-year contracts of mostly up to 15 years,” DFA said.
It said that approximately 78% of total revenue is annuity revenue. The future value of the current annuity contract base is in excess of R8.5 billion.