JOHANNESBURG - Blue Label Telecoms’s share price leapt 5percent after it said it expected its interim results to increase by 20percent, boosted by the impairment of mobile firm Cell C last year.
By 11.48am it had leapt to R3.32 before closing the day at R3.21.
Blue Label said for the six months ended November 2019 it was expecting a basic, headline and core headline earnings per share improvement of at least 2.52cents, 3c and 2.28c compared to the reported losses on basic, headline and core headline per share of 12.59c, 15.02c and 11.39c achieved respectively as at November 30, 2018.
According to Blue Label, for the six months ended November 2018, fair value losses totalling R493million and the group’s share of equity accounted losses in Cell C amounting to R133m were recognised.
No further fair value losses related to the Special Purpose Vehicles (SPVs) were recognised in the current reporting period as the exposure to the SPVs had been fully accounted for as at May 31, 2019, it said.
“As the carrying value of Blue Label’s investment in Cell C was fully impaired for the year ended May 31, 2019, the financial results of Cell C during the current period will not have an impact on Blue Label’s earnings for the current reporting period.
In September 2019, Blue Label reported a 3 percent drop in revenue to R25.9 billion as subsidiary Cell C’s losses mounted to R3.6bn. Blue Label Telecoms, which bought a 45percent stake in Cell C in 2017 for R5.5billion, is focusing on a back-to-basics-led strategy in the fallout from its investment in Cell C and the sale of non-core assets.