Vumatel and DFA contribute to CIVH loss

Remgro has released its unaudited results for the six months ended 31 December 2019, which show that Vumatel and DFA contributed to a loss at its subsidiary CIVH.

Remgro has an effective interest of 54.4% in CIVH, with CIVH’s main operations being Dark Fibre Africa’s (DFA) and Vumatel.

“CIVH’s contribution to Remgro’s headline earnings amounted to a loss of R197 million,” said Remgro.

“Despite the increase in losses, DFA revenue increased to R1,211 million due to strong growth of 17% in annuity revenue, while EBITDA grew by 19%.”

It stated that DFA’s contribution was negatively impacted by “higher depreciation and finance costs as a result of the expanding network”.

The company also provided an update on the value of DFA’s fibre network.

As of 30 September 2019, its fibre network ran a total distance of 12,276km. “The net current book value of the fibre optic network is more than R9 billion,” said Remgro.

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, added Remgro.

“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.”

No sale

Remgro’s results follow reports in November 2019 that it planned to sell its shareholding in CIVH – and by extension Vumatel and DFA.

Remgro dismissed the speculation, however, and CIVH chairman Pieter Uys told MyBroadband that Remgro has no plans to sell its shareholding in CIVH.

Bloomberg reported on 25 November that billionaire Johann Rupert was considering selling the stakes in Vumatel and DFA valued up to R22 billion.

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Vumatel and DFA contribute to CIVH loss