Remgro First-Half Earnings Advance 20% as Mediclinic Recovers
Remgro Ltd. (REM), a holding company controlled by South African billionaire Johann Rupert, said that adjusted earnings gained 20 percent as its medical unit swung back to profit.
So-called headline earnings, excluding one-time items such as costs of a refinancing, rose to 3.66 billion rand ($341 million) in the six months through December, the Stellenbosch-based company said in a statement today. Sales increased 61 percent to 12.7 billion rand.
Remgro holds stakes in companies including Unilever South Africa, fiber-optic cable operator Seacom and financial services group FirstRand Ltd. (FSR) Remgro had a one-time charge of 1.4 billion rand a year earlier related to debt refinancing by Mediclinic International Ltd. (MDC), South Africa’s biggest private-hospital owner, in which it’s the largest shareholder.
Difficulties with Mediclinic are “a thing of the past,” Remgro Chief Executive Officer Jannie Durand said in an interview. The general trading environment is “tough” as customers are avoiding high-priced items, he said.
Mediclinic contributed 662 million rand to Remgro’s headline earnings in the period, while earnings from food, liquor and home-care businesses declined 3.6 percent, due to factors including cheap prices on imported chicken and currency effects, the company said. The contribution from banking holdings rose 22 percent, while infrastructure earnings declined on “poor results in the agricultural sector.”
Remgro has 2.9 billion rand in cash for acquisitions and some of its companies are looking at purchases in the food and infrastructure sectors, Durand said. Some of the businesses have additional funds for acquisitions, he said.
Remgro shares have declined 5.2 percent this year in Johannesburg. The earnings report came after the market closed.
Rupert, the 63-year-old chairman of Remgro, has a net worth of more than $8 billion, according to the Bloomberg Billionaires Index.
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