Remgro CEO warns of a blood bath if companies aren’t protected from COVID-19

Diversified investment holding company Remgro has just released its half-year financial results, maintaining dividends at 215 cents while reporting a slight decrease in headline earnings per share. With investments spanning various sectors including healthcare and banking, the company has a unique perspective on the impact of the COVID-19 pandemic across different industries. In a recent interview with CNBC Africa, Jannie Durand, the CEO of Remgro, shared insights on the challenges faced by the company and its portfolio in these unprecedented times. Durand acknowledged the significant impact of the pandemic on Remgro's investments, particularly in the listed sector where share prices have taken a hit. He highlighted the importance of closely monitoring the performance of portfolio companies and mentioned the establishment of crisis committees to navigate the current situation. Despite facing challenges, Durand emphasized the resilience of Remgro's underlying companies due to their conservative gearing. One of the companies within Remgro's portfolio that experienced a substantial decline in share price was Stellar Winery, with a decrease of approximately 46%. Durand attributed this decline to reduced alcohol consumption as a result of lockdown measures and travel restrictions. He also mentioned challenges in the food sector but emphasized the importance of maintaining a steady supply chain to meet consumer demand. As panic buying becomes more prevalent, Durand discussed the difficulties in balancing production levels to avoid overstocking while ensuring a continuous supply of goods. He highlighted the need to prioritize employee health and safety amidst the evolving situation. When asked about potential measures to support businesses during this period, Durand expressed the importance of a coordinated response involving the private sector, government, and financial institutions. He emphasized the need for support for small and medium enterprises (SMEs) and individuals who rely on credit to sustain their businesses and livelihoods. Durand also addressed the potential impact of interest rate cuts by the Reserve Bank, emphasizing the need for relief measures that benefit both consumers and businesses. He stressed the importance of proactive steps to prevent widespread economic downturns and highlighted the significance of collective efforts to mitigate the long-term consequences of the crisis. In conclusion, Durand highlighted the critical role of collaboration and support in navigating the challenges posed by the COVID-19 pandemic. As businesses across various sectors grapple with uncertainty and disruption, strategic decision-making and adaptability will be key to weathering the storm.