Remgro, under the stewardship of Johann Rupert, has disclosed a significant 40% drop in interim headline earnings for the first half of its financial year.
For the six months ending December 2023, headline earnings totaled R2.1 billion, a notable decrease from R3.5 billion recorded in the corresponding period.
Remgro clarified that excluding the impact of various corporate maneuvers, including restructuring activities, headline earnings experienced a 13.1% decline.
The predominant cause of this downturn stemmed from losses incurred by the recently established entity, Heineken Beverages.
Headline earnings per share (HEPS) plummeted by 39.1% to 381 cents, indicative of the company’s challenging financial landscape.
Despite these setbacks, Remgro has maintained an interim dividend of 80 cents per share, consistent with the previous year.
In an interview with Bruce Whitfield, Jannie Durand, CEO of Remgro, acknowledged the disappointing performance, attributing it primarily to the underperformance of Heineken Beverages following the reimbursement to Distell, which contributed to a lackluster six-month period. Durand also cited adverse effects of the prevailing interest rate environment on debt-laden entities within the group.
Durand emphasized the persistent challenges faced by Remgro, characterized by embedded costs stemming from external factors such as load shedding and water scarcity. He likened these challenges to an additional tax burden on the company’s operations.
Furthermore, Durand expressed concerns over the lack of improvement in the operating environment over the past six months. He underscored the impact of delayed decisions, particularly evident in regulatory delays affecting Eskom deregulation and Remgro’s CIVH deal with Vodacom, a trend exacerbated by the forthcoming elections.
Durand’s insights shed light on Remgro’s ongoing struggle within a complex economic landscape, characterized by both internal restructuring and external market challenges.
