Robust Remgro recovery, as half-year Heps surges over 139%

But group warns of the impact of the Russia-Ukraine war on current market conditions.
The group declared an interim dividend of 50 cents per share, which was up 66.7% compared to its comparative half-year. Image: Supplied

Remgro – the JSE-listed investment holdings giant chaired by billionaire Johann Rupert – reported another period of robust recovery in the half-year to the end of December 2021 on Thursday, with headline earnings per share (Heps) surging 139.4%.

Heps came in at 592.3 cents and the group declared an interim dividend of 50c per share, which was up 66.7% compared with its comparative half-year.

The holdco also reported that its intrinsic net asset value per share was up at R202.47 as at December 31, 2021, compared with R177.33 at the end of its last financial year (ended June 30, 2021).

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However, the group is concerned about the Russia-Ukraine conflict, warning about this impacting current market conditions.

“Shareholders are reminded that this report is based on the actual results for the six months ended 31 December 2021,” Remgro notes in its interim results Sens statement.

“Therefore, this report does not reflect the current market conditions, which have been impacted by the Russia-Ukraine war and related economic sanctions, and must be read in that context,” it cautions.

“Remgro’s portfolio has been subject to the effects of rising commodity prices across the various investee companies, as well as the impact of moving bond yields. Remgro is monitoring and actively managing the effects of both supply chain issues and expected input cost pressures through the group… [The] ultimate impact is still uncertain and difficult to accurately predict,” adds the group.

Interim results

For the period under review, Remgro highlights that headline earnings increased by 139.3% (from just under R1.4 billion to R3.34 billion), resulting in the 139.4% surge in Heps (from 247.4c to 592.3c).

“The headline earnings for the comparative period was significantly impacted by the Covid-19 pandemic and the resultant lockdown measures.

“From this low base, the increase in headline earnings… is mainly due to the recovery of the earnings of most of Remgro’s underlying investee companies, most notably Mediclinic International, Grindrod Shipping Holdings Limited, TotalEnergies Marketing South Africa Proprietary Limited, FirstRand Limited, Grindrod Limited and RCL Foods Limited,” the group adds.

Remgro says “most of its investee companies experienced a robust recovery in financial performance compared to the previous period with the majority of financial metrics ahead of pre-pandemic levels”.

“In addition, significant progress has been made with transformative corporate actions at Distell Group Holdings Limited, Community Investment Ventures Holdings Proprietary Limited (CIVH) and Rand Merchant Investment Holdings Limited.”

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Commenting on the half-year performance, Remgro CEO Jannie Durand said the group was “more than encouraged” that its prudent management, strong balance sheet and capital allocation track record – seen in its resilient portfolio – had enabled the group to deliver a quick recovery amidst all the headwinds.

“As we move forward in our continued journey of recovery and portfolio optimisation, in the face of heightened global political instability, we still believe that now is the time to reset – to do more than pause and adjust – but to recognise the harbingers of change.”

“We remain committed to constantly watching, participating, and adapting to these changing times as a proud and responsible corporate citizen, aiming to nurture a South Africa that is fit for generations to come,” added Durand.

Remgro’s share price traded some 3% weaker (at around R147.31) by midday on Thursday, following the release of its interim results. The fall is likely linked to market concerns around the ripple effects of the Russia-Ukraine war on market conditions.

Remgro share price

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