Share to watch: Remgro hit from Covid-19 hard to quantify yet

JOHANNESBURG – On March 18 Remgro released half-year results, with headline earnings per share up 2.14percent and the intrinsic net asset value (NAV) per share 3.4percent higher. Revenue missed, while book value per share beat estimates.

Declines in infrastructure, insurance, and central treasury expenses were more than offset by the 37percent jump in headline earnings by Mediclinic, which contributed 20percent to total headline earnings.

There were substantial improvements in Siqalo Foods, continued higher profits from the banking platform, and a 64percent spike in headline earnings from Total South Africa.

There was a more significant loss contribution from Community Investment Venture Holdings (CIVH), but their assets seem to be growing at a healthy pace. Remgro holds 54.4percent in CIVH, which is the parent company of Vumatel and Dark Fibre Africa (DFA).

Despite the increase in losses, DFA’s revenue increased to R1.21billion, from R1.06bn the previous year, thanks to the steady growth of 17percent in annuity revenue, and Ebitda grew by 19percent. DFA’s contribution was negatively impacted by higher depreciation and finance costs as a result of the expanding network. Included in CIVH’s results were higher finance and transaction costs due to the acquisition of a further 65.1percent stake in Vumatel in May 2019.