Blue Label Telecoms' earnings continue to forge ahead
28 February 2017
Group earnings continued to escalate, comprising a hybrid of organic growth in local operations augmented by the impact of a fair value gain resulting from Oxigen Services India being viewed as a venture capital investment.
Highlights for the interim period included:
- Increase in revenue of 3% to R13.2 billion
- Increase in gross profit of 25% to R1.1 billion
- Increase in EBITDA of 15% to R715 million
- Increase in earnings per share of 56% to 81.78 cents
- Increase in headline earnings per share of 54% to 81.78 cents
- Increase in core headline earnings per share of 52% to 82.86 cents
South African Distribution perpetuated its dominance in contribution to group earnings with its core headline earnings impacting thereon by a growth of 26%.
On exclusion of the fair value gain in Oxigen Services India, the deferred taxation relating thereto and the group’s share of losses therein, the effective growth in group headline earnings equated to 15%.
Prospects for the year ahead include:
- The Board remains positive with regard to the investment in Cell C and other commercial benefits that will flow therefrom.
- The demand for low cost smart phones and tablets is expected to accelerate and, in turn, enhance revenue and profitability.
- The financing of the mobile device element of post-paid contracts, as well as providing short- term finance for emergency top-ups, are initiatives currently under consideration.
- Losses in Blue Label Mexico are expected to continue to decline with the advent of sustainable improved gross profit margins and increased annuity revenue generated from starter packs.
- A “Big Data” program has consolidated and aggregated transactions across various divisions within the Group, which will create the opportunity to up-sell and cross-sell the various bouquet of products and services that Blue Label has to offer through their distribution channels.
