Remgro sees H1 earnings plunge

South African investment holding company, Remgro, has reported a significant drop in its headline earnings per share for the first six months of the financial year ending in December 2020. The company's CEO, Jannie Durand, discussed the challenges faced by the group, particularly due to lower contributions from Mediclinic and FirstRand, as well as decreased interest income. The impact of the COVID-19 pandemic on the medical sector was evident in the results, with Durand highlighting a decline in earnings for Mediclinic due to a decrease in patient numbers during the lockdowns imposed in April and May. Additionally, the unbundling of RMH resulted in a change in accounting for FirstRand, leading to a significant decrease in earnings from this investment. Despite these challenges, Durand noted that the rest of the company's portfolio showed resilience and stability in the face of the pandemic's disruptions. He emphasized the solid performance of other investments, indicating a more positive outlook for the future. Looking ahead, Durand expressed concerns about the potential impact of a third wave of COVID-19 in South Africa, particularly on the healthcare sector. However, he remained hopeful that the vaccination program would help mitigate the spread of the virus and prevent further economic disruptions. Remgro is looking to leverage its investments in companies like Mediclinic and logistics firm Victor to support the vaccination drive in the country. In terms of financial performance, Durand stated that he expects the upcoming period to show improvement compared to the previous year, with cautious optimism for the company's earnings. However, he acknowledged the unpredictable nature of the current environment and the potential risks associated with future waves of the pandemic. Despite the uncertainties, Remgro remains focused on navigating the challenges posed by the ongoing pandemic and is actively exploring opportunities to support the country's healthcare infrastructure and vaccination efforts. With a strategic approach to leveraging its portfolio and partnerships with the public and private sectors, the company aims to contribute to a successful recovery from the crisis.