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REMGRO LIMITED - Summary of unaudited results for the six months ended 31 December 2023 and cash dividend declaration

Release Date: 19/03/2024 07:05
Code(s): REM     PDF:  
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Summary of unaudited results for the six months ended 31 December 2023 and cash dividend declaration

Remgro Limited                                                                        
Registration number 1968/006415/06
ISIN ZAE000026480
JSE and A2X Share code REM


- Headline earnings per share: down by 39.1% to 381 cents
- Earnings per share: down by 161.6% to a loss of 432 cents (31 December 2022: profit of 701 cents)
- Interim dividend per share: 80 cents (unchanged)
- Intrinsic net asset value per share as at 31 December 2023: down by 4.6% to R236.95 since 30 June 2023

The second half of the 2023 calendar year continued to be marked globally as a period of macroeconomic and
geopolitical instability, with inflation pressures a common global theme. This was also the case in South Africa, with our
unique and well-known challenges of power supply constraints, inefficiencies in transport and logistics, the slow pace
of economic and structural reforms and a general erosion of foreign investment confidence in the country. The
compounded effects of all these factors have been felt across Remgro's portfolio companies, creating an incredibly
challenging operating environment for its businesses to navigate. As a Group, Remgro has worked hard to mitigate the
external pressures to the extent that it can.

An operating backdrop such as this necessitates a disciplined focus on factors within the Group's control, while still
looking for longer-term growth opportunities. As a result, this interim period has been characterised by consolidation
and optimisation following Remgro's shift in 2023 towards a larger unlisted portfolio. This process involved an intensified
focus on driving turnaround and positive momentum in Remgro's core and growth assets. Remgro has seen varying
levels of success in this regard, taking into account the different impacts and integration timelines of the recent
transactions. Remgro's immediate priority remains driving performance in its underlying portfolio companies
and unlocking sustainable value for its shareholders. This is what will enable Remgro's strategic imperative of being the
trusted investment company of choice.

For the period under review, headline earnings decreased by 40.1% from R3 529 million to R2 113 million, while
headline earnings per share (HEPS) decreased by 39.1% from 626 cents to 381 cents. The difference of 100bps in the
HEPS measure compared to headline earnings, represents the accretive impact of shares repurchased during the 2023
financial year and the period under review.

A significant driver of the decline in headline earnings relates to the effect of the corporate actions implemented in the
recent past, majority of which are non-recurring items. The difficult operating environment, particularly in relation to the
trading results of Heineken Beverages also contributed to the material decline in headline earnings. For the current and
comparative periods, these corporate actions and their impact on headline earnings include the following:
-    the IFRS 3 amortisation and depreciation charges for the period under review of R178 million relating to the
     additional assets identified when Heineken Beverages obtained control over Distell and Namibia Breweries
     (Heineken IFRS 3 impact);
-    Remgro's portion of the negative fair value adjustment (FVA) made by TotalEnergies on its Natref stock for the
     period under review amounting to R377 million, due to Natref being classified as held for sale in terms of IFRS 5;
-    Remgro's portion of the transaction costs amounting to R165 million (2022: R19 million) incurred in respect of the
     Mediclinic acquisition;
-    Remgro's portion of a debt forgiveness gain amounting to R227 million that was accounted for by KTH in the
     comparative period (a lender waived its right to receive an outstanding amount of a loan to KTH) as part of the
     disposal of its investment in Actom; and
-    Grindrod's equity accounted income of R60 million until its unbundling during October 2022.

Excluding the impact on headline earnings of these corporate actions, the headline earnings decreased by 13.1%,
largely driven by:
- the loss contributed by Heineken Beverages (excluding the Heineken IFRS 3 impact) of R208 million, partly offset
  by Capevin's contribution of R57 million, compared to Distell's contribution of R517 million in the comparative period;
- a lower contribution from CIVH mainly due to higher finance costs resulting from increased interest rates;
- a special dividend of R154 million received from FirstRand in the comparative period;
- partly offset by increased contributions from TotalEnergies (excluding the negative FVA on Natref's stock), as well
  as RCL Foods and Siqalo Foods due to improved operating performances.

Total earnings amounted to a loss of R2 394 million (2022: a profit of R3 951 million). This decrease in earnings is
mainly due to the decrease in headline earnings discussed above (R1 416 million), the impairment of Remgro's
investment in Heineken Beverages (R3 488 million) and Remgro's portion of the impairments of Heineken Beverages'
goodwill that was created through the Distell/Heineken transaction (R1 819 million). For the 2023 financial year, Remgro
accounted for a profit on disposal of R3 384 million in respect of the Distell/Heineken transaction.

Remgro's intrinsic net asset value per share decreased by 4.6% from R248.47 at 30 June 2023 to R236.95 at
31 December 2023. The closing share price at 31 December 2023 was R162.48 (30 June 2023: R147.05), representing
a discount of 31.4% (30 June 2023: 40.8%) to the intrinsic net asset value.

Notice is hereby given that an interim gross dividend of 80 cents (2022: 80 cents) per share has been declared out of
income reserves in respect of both the ordinary shares of no par value and the unlisted B ordinary shares of no par
value, for the six months ended 31 December 2023.

The Board is satisfied that the Company is solvent and liquid, thus confirming that the Company has sufficient capital
and reserves after the payment of the interim dividend, to support its operations for the foreseeable future.

A dividend withholding tax of 20% or 16 cents per share will be applicable, resulting in a net dividend of 64 cents per
share, unless the shareholder concerned is exempt from paying dividend withholding tax or is entitled to a reduced rate
in terms of an applicable double-tax agreement.

The issued share capital at the declaration date is 529 217 007 ordinary shares and 39 056 987 B ordinary shares. The
income tax number of the Company is 9500-124-71-5.

Dates of importance:
 Last day to trade in order to participate in the dividend                                        Tuesday, 16 April 2024
 Shares trade ex dividend                                                                       Wednesday, 17 April 2024
 Record date                                                                                       Friday, 19 April 2024
 Payment date                                                                                      Monday, 22 April 2024

Share certificates may not be dematerialised or rematerialised between Wednesday, 17 April 2024, and Friday,
19 April 2024, both days inclusive.

In terms of the Company's Memorandum of Incorporation, dividends will only be transferred electronically to the bank
accounts of shareholders. In the instance where shareholders do not provide the Transfer Secretaries with their banking
details, the dividend will not be forfeited but will be marked as "unclaimed" in the share register until the shareholder
provides the Transfer Secretaries with the relevant banking details for payout.

The directors, who take responsibility for the contents of this results announcement, present the unaudited interim results
of Remgro for the six months ended 31 December 2023.

The financial information in this results announcement is a summary only and does not contain full details of the
consolidated financial results. Accordingly, any investment decisions should be based on information contained in the
unaudited interim results for the six months ended 31 December 2023, published on SENS and available at and on the Company's website at

Shareholders and other interested parties are invited to join management in discussing Remgro's interim results via
webcast at 09:00 am SAST on Tuesday, 19 March 2024 at the following link:

Signed on behalf of the Board of Directors.

Johann Rupert                                                                  Jannie Durand
Chairman                                                                       Chief Executive Officer

Approved by the Board: 18 March 2024
SENS release date: 19 March 2024


Non-executive directors
Johann Rupert (Chairman), F Robertson* (Deputy Chairman),
S E N De Bruyn*, N P Mageza*, J Malherbe, P J Moleketi*,
M Morobe*, P J Neethling, G G Nieuwoudt*,
K S Rantloane*, A E Rupert
(* Independent)

Executive directors
J J Durand (Chief Executive Officer),
M Lubbe, N J Williams


D I Dreyer

Primary listing - JSE Limited
Sector: Financials – Financial Services – Investment Banking and Brokerage Services – Diversified Financial Services
Secondary listing – A2X

Business address and registered office
Millennia Park, 16 Stellentia Avenue, Stellenbosch 7600
(PO Box 456, Stellenbosch 7599)

Transfer Secretaries
Computershare Investor Services Proprietary Limited,
Rosebank Towers, 15 Biermann Avenue, Rosebank 2196
(Private Bag X9000, Saxonwold 2132)

Ernst & Young Inc.
Cape Town, South Africa

Rand Merchant Bank (A division of FirstRand Bank Limited)


Date: 19-03-2024 07:05:00
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