JSE-listed Blue Label Telecoms reported tentative signs of recovery after writing down of Cell C, which was a drag on its financials.
As the carrying value of Blue Label’s investment in Cell C was fully impaired for the year ended May 2019, the financial results of Cell C did not have any impact on Blue Label’s earnings for the current year, the company informed investors.
The comparative year reflected the negative contributions to core headline earnings by Cell C of R2.6 billion.
Blue Label Telecoms disclosed that revenue fell 10% to R21.1 billion in the year to end-May 2020.
Headline earnings per share (HEPS) increased from a negative of 312.49 cents in 2019 to a positive of 58.16 cents per share in 2020. HEPS is South Africa’s main profit gauge.
Gross profit declined by 2% from R2.17 billion to R2.12 billion, partially limited due to an increase in margins from 9.21% to 10.05%.
“In spite of certain restrictions caused by the COVID-19 pandemic, Blue Label has continued to deliver essential services, including electricity, airtime, data and other digital services, as well as providing financial transactional services,” the company said.
“The lockdown regulations and the downturn in economic activity have not negatively impacted airtime, data and electricity sales volumes.”
The company added that its digital expertise has enabled uninterrupted access of all its products and services through banks, formal retailers, independent retailers, petroleum forecourts and spaza shops across South Africa.
“Cash flow generated by the core businesses within the Group has consequently not been negatively impacted.”