Remgro Earnings Decline on Refinancing of Mediclinic Debt
Remgro Ltd. (REM), a South African company with interests in banking, food production and health services, said first-half earnings fell 35 percent on debt refinancing charges for Mediclinic International Ltd. (MDC)
Basic earnings, including the Mediclinic charges and excluding some one-time items, declined to 1.72 billion rand ($186 million) in the six months through December, the company said in a statement today. Profit attributable to shareholders plunged 52 percent, while sales rose 14 percent to 7.86 billion rand.
“Remgro participated in Mediclinic’s rights issue undertaken to refinance its Swiss and South Africa debt during October 2012,” the company said in a separate e-mailed statement. Remgro’s share was 1.42 billion rand, it said. Excluding the refinancing for the hospital operator, basic earnings rose 19 percent.
The results represent “solid growth” for the period “despite challenging trading conditions across most of the South African market,” Remgro said. Financial services, led by the company’s stakes in RMB Holdings Ltd and FirstRand Ltd., contributed 1.32 billion rand to so-called headline earnings, it said.
The second half of the fiscal year is “definitely not an easy six months,” Chief Executive Officer Jannie Durand said in a phone interview from Cape Town. Rainbow Chicken Ltd. (RBW), in which Remgro has a 73.4 percent stake, will be affected by “high import costs” and the weak rand, he said.
The stock fell for a third day in Johannesburg, closing down 0.1 percent at 174.17 rand. That pared the gain this year to 9.4 percent.
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