Sharp earnings drop for Rupert's Remgro amid restructuring, beer sales slump, stalled govt decisions

Remgro, chaired by Johann Rupert, has reported a 40% plunge in interim headline earnings for its financial half year.

Headline earnings came in at R2.1 billion for the six months to end-December 2023, compared to R3.5 billion for the previous period.

Excluding the impact of various corporate actions including restructuring, headline earnings dropped by 13.1% Remgro said.

The decrease was largely driven by losses recorded by new company Heineken Beverages.

Headline earnings per share (HEPS) were down by 39.1% to 381 cents.

Nonetheless, Remgro declared an interim dividend of 80 cents per share, unchanged from 2022.

Bruce Whitfield interviews Jannie Durand, CEO of Remgro.

"If you look at the results and you take out the restructuring costs, we're down nearly 12% and that's not a performance we're proud of. That's mainly related to two things - underperformance of our new company Heineken Beverages, after reimbursing Distell we didn't have a great six months.

"Also our interest rate environment affected some of the company that's got debt levels."

Jannie Durand, CEO - Remgro

Six months ago already, Durand warned that Remgro was operating in the toughest environment it had ever experienced.

He highlights embedded costs in their system related to external factors like loadshedding and water challenges.

These he says, are actually like 'an additional tax on our companies'.

"There's been no improvement in this environment in the last six months... and I think what's happening now in the run-up to the elections is we don't get many decisions that need to be taken."

Jannie Durand, CEO - Remgro

Here, Durand cites examples like delays in the deregulation of Eskom and getting the green light for Remgro's CIVH deal with Vodacom.