Blue Label interims hit by Cell C losses

Blue Label Telecoms has published its financial results for the six months ended November 2018, showing a net loss of R116.5 million for the period on the back of a large negative contribution from Cell C.

For the half year, Blue Label reported gross profits of R1.31 billion (up 15% from the prior year), with revenue of R12.3 billion, down from R13.6 billion before.

Core headline earnings for the six months ended 30 November 2018 equated to a negative 11.39 cents per share.

The group reported a net loss of R116.5 million due to losses from its join ventures, including Cell C and Blue Label Mexico, which totalled R138 million. This was from gains of R1.35 billion in the prior comparative period.

Blue Label bought a 45% shareholding in Cell C through a subsidiary in August 2017, and has subsequently provided the network’s financial performance as part of its results presentations.

The company shared Cell C’s financial statements for the year ended 31 December 2018 – which showed a big loss for the mobile operator.

Cell C recorded revenue of R15.69 billion in 2018, but suffered a total comprehensive loss of R1.27 billion, stated the results.

For the six months ended November 2018, Cell C’s net loss amounted to R634 million.

Blue Label’s share thereof, due to its 45% stake in the company, amounted to R285 million, with the company noting that its accounting policies exclude equity-settled share-based payment charges from its associates.

“Accordingly, an adjustment of R51 million and R106 million respectively was required. The net result was a negative contribution of R128 million to Blue Label’s core earnings,” it said.

Read: ‘Reclusive billionaire’ buying a stake in Cell C

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Blue Label interims hit by Cell C losses