Financial picture at Vumatel parent deteriorates

CIVH, the Remgro-controlled parent of fibre network operator Maziv – which owns Vumatel and Dark Fibre Africa – has swung into a loss in its latest financial reporting period.

Remgro disclosed in its interim financial results for the six months to end-December 2024, which were published on Tuesday morning, that CIVH’s contribution to Remgro’s headline earnings for the period amounted to a loss of R141-million, down from a profit in the same period in 2023 of R6-million. Remgro holds a 57% equity stake in CIVH.

That’s a deterioration in the picture since Remgro’s year-end in June 2024, when CIVH’s contribution to Remgro’s headline earnings amounted to a loss of R75-million, from a profit of R206-million in 2023.

CIVH’s total headline earnings for the six months to end-September 2024 – which is when the CIVH business has its reporting period – came to a loss of R248-million (30 September 2023: profit of R11 million).

“The results of CIVH for the comparative period included a profit for the reversal of a guarantee provision of R39-million from discontinued operations, while the current period’s results were negatively impacted by a fair-value loss on an interest rate hedge of R98-million,” Remgro told shareholders on Tuesday.

“Investments were made in the network to support long-term growth. Higher maintenance costs (up by R26-million), increased depreciation and amortisation charges (up by R47-million), and increased borrowing costs (up by R134-million) due to higher average debt balances, have also contributed to the decrease in profitability,” it said.

“The CIVH group is, however, operationally cash generative and continues to reinvest any excess operating cash flow and capital into expanding its operations and network footprint, while continuing to limit overbuild [of fibre networks] in key markets.”

Revenue

Vumatel’s total revenue for the six months ended 30 September 2024 increased by 11.1% to just over R2-billion, Remgro said. That compares to R1.8-billion in the year-ago period, with growth driven by a fibre infrastructure expansion programme and subscriber uptake.

“The decrease in earnings is mainly due to increased borrowing costs due to higher average debt balances and a negative fair value adjustment on an interest rate hedge, totalling R232-million (Remgro’s portion being R132-million),” Remgro said.

Read: Competition Tribunal defends delays in Maziv, Cell C cases

It said CIVH’s revenue for the six-month period to end-September 2024 increased by 7.9% to R3.4-billion (30 September 2023: R3.1-billion). This was “supported by subscriber uptake growth at Vumatel and increased demand for Dark Fibre Africa’s fibre-to-the-business products”.

“CIVH’s Ebitda – earnings before interest, tax, depreciation and amortisation – from continuing operations for the same period increased by 6.5% as the business deliberately increased security-related and maintenance costs to ensure the safety of its workforce and maintenance service provider staff in the field, while maintaining a high standard of network uptime and service levels.”

CIVH’s report comes as Vodacom continues its talks to acquire a minimum 30% co-controlling stake in Maziv for more than R10-billion, a transaction that was blocked by the Competition Tribunal last year, though no details reasons have been provided for its decision. That ruling is now the subject of an appeal, which is set to be heard between 22 and 24 July 2025.

“As a result of the proposed transaction, Remgro’s indirect interest in DFA and Vumatel will dilute with the entrance of Vodacom as a shareholder. However, Remgro will also obtain an indirect interest in the assets contributed by Vodacom,” Remgro said.

Read: Maziv hires top executive from rival Openserve

“Remgro and CIVH remain committed to the proposed transaction and believe firmly that, should the implementation of the proposed transaction ultimately be permitted by the competition appeal court, it will deliver significant benefits to South African consumers and the broader economy.”  — © 2025 NewsCentral Media

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