Community Investment Ventures continues to drown Remgro
Remgro-controlled Community Investment Ventures Holdings (CIVH) has reported a loss of R197 million for the six months ended December 2019.
This compares to the R104 million loss the company recorded in 2018.
CIVH is active in the telecommunications and information technology sectors. The group’s major operating companies are Dark Fibre Africa (DFA) and Vumatel, which constructs and owns fibre-optic networks.
In the period under review, DFA revenue increased to R1.2 billion (2018: R1 billion) due to strong growth of 17% in annuity revenue, says the company.
Remgro says 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 65.1% stake in Vumatel during May 2019, as well as an increase in losses accounted for Vumatel due to the additional interest acquired,” says the company.
“Vumatel’s revenue and EBITDA increased by 74% and 109%, respectively, but its results were also negatively impacted by higher depreciation and finance costs driven by the expanding network.”
CIVH recently appointed Raymond Ndlovu as CEO, as it looks to solidify its position in the South African telecoms space.
At the time of the appointment, Remgro said Ndlovu’s primary objective was to create a diversified wholesale, open-access ICT infrastructure business, to enhance the existing asset base.
According to the investment firm, the open-access business models of both DFA and Vumatel have fostered the rapid growth and development of a competitive telecoms landscape in South Africa.
DFA has deployed over 16 000km of ducting infrastructure in major South African metros, secondary cities and smaller towns. The company says its network runs with an uptime of 99.98%.
Vumatel pioneered fibre-to-the-home in SA and has since connected thousands of homes across Johannesburg, Cape Town and Durban to broadband Internet. The company, which has a footprint in excess of 600 000 homes, anticipates there are at least a further 700 000 homes in emerging markets.
Commenting on the results under review, Jannie Durand, CEO of Remgro, says: “The last five or six years in South Africa have probably been some of the toughest years from both a business and a political perspective. We anticipate that this trend will continue for at least the next couple of years and we remain positive and confident in Remgro’s strategy and ability to continue creating shareholder value over the long-term.”
According to Durand, while there is still a lot of uncertainty around global markets and the potential impact of COVID-19 in particular, “we remain confident that Remgro and its underlying investments remain well-placed to navigate these storms and capitalise on the various opportunities that inevitably present themselves during challenging times”.