Seacom has seen a turnaround in financial fortunes reporting headline earnings of R40 million for the six months ended December 2014, from a headline loss of R32 million in 2013.<\/p>\n
This is according to holding company Remgro, which has an effective 25% interest in Seacom. Remgro\u2019s share in Seacom’s earnings amounted to R8 million, from a loss of
\nR8 million previously.<\/p>\n
In September, the undersea cable infrastructure company recorded a headline loss of R26 million for the year ended June 2014, down from a loss of R3 million in 2013.<\/p>\n
Remgro said in an interim results announcement that its book value for Seacom increased to R625 million, from R569 million at the end of June 2014, with its intrinsic value up to R1.05 billion, from R991 million before for its 25% stake.<\/p>\n
Seacom operates an undersea fibre-optic cable to connect Southern and Eastern Africa with Europe and Asia.<\/p>\n
The cable connects South Africa, Mozambique, Tanzania, Kenya and Djibouti with the rest of the world via landing points in France (and onwards to London) and India. Landlocked countries (Uganda, Rwanda, Ethiopia, etc.) are connected by terrestrial back-haul.<\/p>\n
In February, Saecom announced the appointment of Byron Clatterbuck as its chief executive officer taking over from Seacom founder, Brian Herlihy who took up a position as executive director of the group in February 2014, following the resignation of previous CEO, Mark Simpson.<\/p>\n
Seacom provides high-capacity international bandwidth services to customers in the form of International Private Line and IP Transit Services.<\/p>\n
These services are sold under 12-to 36-month lease contracts and as 15-to 20-year indefeasible right of use (IRU) contracts, which generally include annual maintenance charges over the term.<\/p>\n
Upfront revenue from IRUs is accounted for over the full term of 15 or 20 years.<\/p>\n
“Fortunately, increasing demand for faster and better data network services is playing its part in positively ensuring that demand grows above expectations. Furthermore, ongoing reductions in terrestrial costs and increased demand for reliable protected routes around Africa are also leading to increased demand for Seacom\u2019s services, Remgro said.<\/p>\n
“Seacom\u2019s ability to adapt to the rapidly evolving market and respond to demand faster than its competition is critical to maintain its ongoing competitive positioning,” it said.<\/p>\n