VenFin incurs net loss despite Vodacom growth

JSE-listed technology holding company VenFin incurred a net loss of R32 million for the six months to 30 September 2001, despite healthy growth at Vodacom, one of its chief investments.

Rembrandt`s assets were reorganised into two companies, VenFin and Remgro, with effect from 1 April last year, with VenFin housing the group`s technology interests.

Among its investments are a 13.5% interest in cellular provider Vodacom, 17.49% of Intervid and 26% in free-to-air broadcaster e-tv.

The group`s share of the net income of Vodacom, interest received from R&V Holdings and other cash resources comprise the most important source of VenFin`s headline earnings for the period.

Its other investments in associated companies consist predominantly of new investments in technology businesses that are expected to contribute to earnings only over the medium to long term.

Vodacom`s pro forma headline earnings per share rose 41% during the period, from R684.4 million to R965.3 million.

This was on the back of a 29.2% increase in revenue from R5.83 billion to R7.54 billion.

VenFin CEO Josua Malherbe says Vodacom achieved an EBITDA margin (earnings before interest, tax, depreciation and amortisation) of 34%.

At the end of the reporting period, the Vodacom subscriber base stood at about 5.82 million, he adds. SA accounted for 5.66 million subscribers, Tanzania for 133 635 and Lesotho 30 437.

VenFin incurred a net loss, from a profitable position last year, mainly because of a provision of R223 million against start-up investments.

An analyst says VenFin is essentially an investment trust, and so the company`s earnings per share figure is almost meaningless. He says the market net asset value, which slipped from R27.17 a share to R26.31 a share, is a better indicator.

The company`s share was trading at R18.55 on the JSE this morning, 3.39% or 65c down from Friday`s close.