Blue Label lifts interim earnings

Blue Label Telecoms on Wednesday (18 February), reported a 14% rise in revenue for the half year ended November, to R10.2 billion, predominantly achieved through access to additional channels of distribution.

Operating profit increased to R470 million, from R397 million, while headline earnings per share increased by 15% to 42.73 cents.

This growth, the group noted, was achieved in spite of a share of losses in Blue Label Mexico increasing by R14.5 million, negatively impacting on growth in headline earnings per share by 2.17 cents.

The company also recorded a 20% increase in earnings before interest, tax, depreciation and amortisation to R516 million.

The group’s share of profits in Ukash, after the amortisation of intangible assets, increased by 6% from R6.9 million to R7.4 million.

During November 2014, an agreement was signed whereby Blue Label Telecoms will dispose of its interests in Ukash. Completion of the transaction will take place after receipt of the necessary regulatory approvals.

Blue Label said it’s share of losses in Oxigen Services India declined from R3.5 million to R0.7 million, after the amortisation of intangible assets of R0.7 million.

This positive turnaround was attributable to increases in revenue by 16% and gross profit by 36%, reported in their local currency, it said.

“The benefits of Oxigen Services India’s defined strategy of becoming India’s first non banked mobile wallet that empowers the unbanked masses to instantly transfer and receive cash across the entire country are clearly evident in its turnaround into
profitability,” Blue Label said.

“This has been primarily due to its shift in strategy to a focus on money transfer services without detracting from its airtime sales.”

It noted that daily money transfer deposits have increased from USD1.2 million per day in the comparative period to USD2.7 million per day in this reporting period, increasing exponentially through its connectivity with the National Payment Corporation of India.

Blue Label Mexico’s losses increased to an equivalent of R95 million, of which R5 million was attributable to negative foreign exchange movements.

The group’s share of losses equated to R45 million of which R2 million pertained to these
foreign exchange movements, up from R30.7 million lost in 2014.

Looking ahead, Blue Label said that acquiring, which is the ability to process credit and debit card payments for products and services on behalf of merchants, is set to gain momentum as a result of the establishment of successful alliances with various financial institutions.

This will enable consumers to transact at store level through the multitude of points of presence that Blue Label has deployed both locally and internationally.

It said that the prevalence of prepaid water meters is following in the footsteps of the group’s prepaid electricity model. Installation of meters by third parties, supported by state-of-the-art software, has enabled Blue Label to enter into the prepaid water arena.

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Blue Label lifts interim earnings