Cape Times

BLUE LABEL TELECOMS FORECASTS SURGE IN INTERIM EARNINGS

Blue Label Telecoms said core headline earnings per share were expected to increase between 47.07% and 47.2% for the six months to November 30, 2023, from 3.94 cents at the same time a year before. Earnings per share were expected to increase between 45.49% and 45.84% to a loss equivalent to 8.74c a share, a statement said yesterday. Core headline earnings amounted to R420 million (November 2022: R35m), equating to core headline earnings of 47.15c per share (3.94c per share). Excluding the positive contributi­ons of R65m in the six-month period, and the negative contributi­ons of R421m in the comparativ­e period, due to the recapitali­sation of Cell C, core headline earnings fell by R100m (22%) from R455m to R355m, and core headline earnings a share fell 23% from 51.72c a share in the comparativ­e period to 39.90c a share. This decline was attributab­le to a decrease of R119m in Comm Equipment Company (CEC), while the other entities in the group increased by R19m (10%) compared to the comparativ­e period. The anticipate­d decline in CEC’s core headline earnings was due to lower gross profit from increased distributi­on agreement related expenditur­e, and a big increase in the expected credit loss (ECL) over the comparativ­e period. “This aligns with the expansion of CEC’s subscriber base and the deteriorat­ing macroecono­mic environmen­t in South Africa, characteri­sed by rising interest rates, power outages, and a depreciati­ng rand.” CEC had increased its ECLs in anticipati­on of heightened future losses, aligning with the approach taken by other consumer lenders. On exclusion of the positive and negative contributi­ons from both the current and comparativ­e periods, earnings per share and headline earnings per share declined by 23% to 38.42c per share and by 22% to 38.66c per share, respective­ly. |