Holding company Remgro published its interim results for the six months ended December 2021, showing a 139.3% increase in headline earnings to R3.35 billion, while headline earnings per share (HEPS) increased by 139.4% to 592.3 cents per share.
The Stellenbosch based group pointed out that headline earnings for the comparative period was significantly impacted by the Covid-19 pandemic and the resultant lockdown measures.
From this low base, the increase in headline earnings for the period under review is mainly due to the recovery of the earnings of most of Remgro’s underlying investee companies, including Mediclinic, Grindrod Shipping, TotalEnergies, FirstRand, and RCL Foods.
Mediclinic’s contribution for the comparative period includes the full impact of the Covid-19-related lockdown measures during the first wave of the pandemic on its results for the six months ended September 2020.
The results for the period under review were also positively impacted by lower equity accounted losses from Community Investment Ventures Holdings Proprietary Limited (CIVH) and lower finance costs, due to the redemption of the exchangeable bonds, Remgro said.
- Headline earnings per share: up by 139.4% from 247.4 cents to 592.3 cents;
- Headline earnings per share: up by 22.2% compared to pre-pandemic period;
- Interim dividend per share: up by 66.7% to 50 cents;
- Intrinsic net asset value per share as at 31 December 2021: up by 14.2% to R202.47.
Remgro said that compared to the pro forma headline earnings for the pre-pandemic 2019 period, headline earnings increased by 22.2%, which indicates that the earnings of most of its underlying investee companies, that have been affected by the Covid-19 pandemic, have substantially recovered.
Compared to the pro forma headline earnings and pro forma HEPS for the pre-pandemic 2019 period, the headline earnings and HEPS increased by 22.2% from R2 738 million to R3 345 million and from 484.6 cents to 592.3 cents, respectively.
Jannie Durand, CEO of Remgro, said: “As we move forward in our continued journey of recovery and portfolio optimisation, in the face of heightened global political instability, we still believe that now is the time to reset – to do more than pause and adjust – but to recognise the harbingers of change.
“We remain committed to constantly watching, participating, and adapting to these changing times as a proud and responsible corporate citizen, aiming to nurture a South Africa that is fit for generations to come.”
CIVH’s contribution to Remgro’s headline earnings amounted to a loss of R23 million (2020: a loss of R209 million). The decrease in losses is mainly due to the settlement of head office debt, resulting from two rights issues, and improved performances by the underlying businesses.
The performance of the underlying businesses improved due to a 21% increase in revenue coupled with cost reductions in the period under review, which resulted in improved operating earnings for the six months of R696 million (2020: R451 million), Remgro said.
Dark Fibre Africa’s revenue increased by 18.2% to R1.404 billion (2020: R1.19 billion) mainly due to annuity income increasing to R192 million per month at 30 September 2021. Vumatel revenue increased by 31.7% to R1.438 billion, driven by its fibre infrastructure expansion program and subscriber uptake growth.
SEACOM’s contributions to Remgro’s headline earnings amounted to R8 million (2020: R35 million), down 77%. Despite this, “SEACOM continues to adapt to the rapidly evolving data market and investment in its submarine and terrestrial network to respond to an ever-increasing demand,” Remgro said.