JOHANNESBURG - Remgro reported a decline in earnings for the year to end June, with the majority of the group's investments impacted by fragile economic growth, low business confidence and deteriorating operating environments.
However, the group said the banking investments remained resilient during the year and contributed 46.2percent to its headline earnings.
Remgro reported a 4.4percent decline in headline earnings to R8.20billion, down from R8.57bn, while headline earnings per share declined by 4.2percent to 1448.9cents a share, down from 1512.6c compared to last year. The group said the decline in earnings was mainly due to lower earnings from RCL Foods, Community Investment Ventures Holdings, Total South Africa and the exclusion of Unilever South Africa Holdings due to its disposal.
Remgro’s intrinsic net asset value per share decreased by 9.3percent to R233.03 a share at the end of June, mainly as a result of the decline in Mediclinic International’s share price.
The group declared a 6percent increase in total dividend to 564c.
Chief executive Jannie Durand said weak domestic fundamentals remain the key feature of the South African operating environment. He said uncertainty remained high with SA’s fragile signs of real gross domestic product growth, a lack of policy reform momentum and fiscal strain against a backdrop of global growth concerns.
“Various proposed regulatory changes will also change the landscape for Remgro’s major investments. Despite the myriad challenges faced by all of Remgro’s investments, the group’s investee companies are well positioned within their sectors with robust strategies that will benefit Remgro over the long-term. Remgro is well placed to pursue opportunities that may present themselves and to support its investee companies on their various growth trajectories,” Durand said.
The banking investment’s contribution to Remgro’s headline earnings increased by 6percent to R3.74. FirstRand and RMB Holdings (RMH) reported headline earnings growth of 5.2 and 6.1 percent, respectively. The group said RMH reported higher growth due to higher earnings from RMH Property.
RCL Foods’ contribution to Remgro’s headline earnings decreased by 60.7percent to R254million, largely attributable to the adverse performance of the Chicken and Sugar business units.
Remgro also has an investment in health through MediClinic. MediClinic contribution to Remgro’s headline earnings increased by 8.8percent to R1.69bn and Rand Merchant Investment Holdings contribution to Remgro’s headline earnings decreased by 5.5percent to R1.16bn.