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Cape Town – Although Remgro [JSE:REM] showed a sizeable currency loss on its cash holdings in the year to end March 2010, there will be no change to the way the group’s cash is invested over the short-term.
In year to end-March results released on Monday, Remgro’s cash flow statement showed an exchange rate loss on foreign cash of nearly R1.2bn.
This is represents a major shift in the financial year considering Remgro’s operational cash flow was R1bn and dividends received about R1.4bn.
At last year’s Remgro AGM, shareholder activist Theo Botha raised the issue of having the bulk of the company’s cash holdings in dollars. He asked whether Remgro was not taking a risk in having so much cash invested in a currency that could be overvalued.
Remgro CEO Thys Visser told Fin24.com that most of Remgro’s cash was moved into in US dollars after the unbundling of British American Tobacco (BAT).
"What we did not see was the continuing strength in the rand."
Remgro had R4.7bn cash at the centre at the end of March this year (compared with almost R6bn last year), of which about R4.2bn was held offshore.
With miserly interest rates offshore, Remgro’s interest earnings came in at R146m compared with R197m the previous year.
Visser said no change to the currency spread of Remgro’s cash was envisaged in the foreseeable future.
He added that some cash would need to be mobilised in the year ahead for investments in SA.
On Monday night Remgro disclosed it had committed R636m to a rights issue to be undertaken by private hospitals operator Medi-Clinic Corporation [JSE:MDC].
- Fin24.com
