JSE-listed Blue Label Telecoms on Thursday posted core headline earnings of R420-million, equating to core headline earnings per share (HEPS) of 47.15c for the six months ended November 30, 2023.

Comparatively, core headline earnings during the prior corresponding period last year amounted to R35-million, equating to core HEPS of 3.94c, as Cell C and its recapitalisation transaction dragged the November 2022 basic, headline and core HEPS.

Blue Label’s financial results for the first half of the year outlined that, excluding positive contributions of R65-million in the current six-month period and negative contributions of R421-million in the prior period, core headline earnings declined from R455-million to R355-million, while core HEPS declined 23% from 51.72c in the prior corresponding period to 39.90c.

This decline in core headline earnings was attributable to a R119-million decrease in Comm Equipment Company (CEC), while the remaining entities within the group increased by R19-million compared with the prior period.

“The anticipated decline in CEC’s core headline earnings was a result of a decline in gross profit stemming from increased expenditure related to the distribution agreement, as well as a significant increase in the expected credit loss compared to the previous period,” Blue Label said, noting that the increase aligns with the expansion of CEC’s book and the deteriorating macroeconomic environment in South Africa, marked by rising interest rates, power outages and a depreciating rand.

Meanwhile, Blue Label’s earnings per share (EPS) for the current period amounted to 45.67c from a loss of 8.74c in the prior period.

“On the exclusion of the contributions resulting primarily from the recapitalisation transaction of Cell C from both the current and prior periods, EPS declined by 23% to 38.42c and HEPS declined by 22% to 38.66c.”

Group revenue declined by R2.2-billion to R7.6-billion; however, imputing the gross revenue generated from “PINless top-ups”, prepaid electricity, ticketing and universal vouchers, the effective growth in revenue equated to R4.5-billion, resulting in total revenue of R43.8-billion, compared with R39.3-billion in the prior corresponding period.

During the six months to November 2023, gross profit increased from R1.54-billion to R1.59-billion, corresponding to an increase in margins from 15.67% to 21.08%, which can be partially attributed to the growth in “PINless top-ups”, prepaid electricity, ticketing and universal vouchers.