Investment holding company Remgro reported a significant drop in profits for the six months ended December 2020 on Thursday, March 25, citing hard work around the Covid-19 pandemic.
Overall total earnings per share fell 67.1% to 247.4 cents per share, while overall earnings per share from continuing operations fell 52.7% to 247.4 cents per share.
According to the company, the decline in overall profit from continuing operations is mainly due to lower contributions from Mediclinic and FirstRand, as well as lower interest income due to the 300 basis point reduction in interest rates. since January 2020.
Mediclinic, RMI, CIVH (which owns Vumatel and DFA), FirstRand, RCL Foods and Distell are among the assets of Remgro. CIVH’s contribution to the group’s comprehensive income was a loss of Rand 209 million, according to the company (2019: a loss of Rand 197 million).
Dark Fiber Africa Proprietary Limited (DFA) revenue remained stable at Rand 188 million (2019: Rand 190 million), but Vumatel’s revenue increased 43% to Rand 092 million, due to the cumulative growth absorption of subscribers and the acquisition of additional networks from a subsidiary DFA, the company said.
Vumatel is the largest fiber-to-the-home network operator in South Africa, with over 19,000 kilometers of fiber assets.
According to Remgro, Covid-19 has accelerated data requirements, which has contributed to the performance of the FTTH business.
Grindrod and Seacom contributed R15m and R35m respectively to the overall benefit of Remgro (2019: R41m and R9m), while other infrastructure investments included Grindrod’s contribution. Shipping Holdings Limited (Grindrod Shipping), which represented a loss of R58 million (2019). : a loss of 22 million rand).
According to the group, the increased loss of Grindrod Shipping is mainly due to lower dry bulk spot rates, which have been influenced by lower demand for dry bulk due to the Covid-19 pandemic.
“The second wave of Covid-19 hit South Africa harder than expected in the second half of 2020, bringing with it a new variant with higher infection rates and greater severity of symptoms. This has led to the imposition of additional lockdown measures to slow the spread of the disease and relieve pressure on the healthcare system, according to Remgro.
He said the results for the six months ending December 2020 are not directly comparable with the results for the six months ending December 2019, which came from a period prior to Covid-19.
The overall results for the period under review were significantly impacted by Mediclinic’s reduced contribution (down 80.2%), which includes the full impact of the lockdown measures related to Covid-19 on its results for the six months following. ending in September 2020.
In addition, as FirstRand has been reclassified from an equity-accounted investment to an investment at fair value through other comprehensive income, no FirstRand profit has been recognized in the period under review. , while 548 million rand was included in the comparative period.
Due to the Covid-19 pandemic, FirstRand did not pay any dividends during the reporting period, according to the company.
With the exception of Mediclinic and FirstRand, Remgro said its investment portfolio performed well during the Covid-19 pandemic, with their contribution to Remgro’s overall profits declining by just 7.7%.
Total total revenues fell 67 percent during the period under review, from Rand 242 million to Rand 398 million.
Remgro unbundled its 28.2% stake in RMB Holdings in June 2020 and, therefore, the investment in RMH was classified as a discontinued operation for the fiscal year ended June 2020.
The intrinsic net asset value per share of Remgro increased 4.9% from Rand 154.47 on June 30, 2020 to Rand 161.98 on December 31, 2020, according to the company.
The company declared an interim gross dividend of 30 cents per share (2019: 215 cents), which was reduced to take into account the unbundling of the RMH and the impact of the Covid-19 pandemic.
A 20% withholding tax, or 6 cents per share, will be applied, resulting in a net dividend of 24 cents per share, according to the company.
