DURBAN – Blue Label Telecoms on Thursday flagged that its earnings for the year to May could plunge as much as 20 percent after impairing its exposure to Cell C to zero.
The group, the largest financier of the country’s third-largest mobile operator at 45 percent, said it expected to report a loss of between 725.81c and 729.81c a share, compared to earnings per share of 116.12c reported last year.
Blue Label Telecoms bought a 45 percent stake in Cell C for R5.5 billion in 2017. It said Cell C trading losses and related impairments contributed 671.33c in the group’s loss a share. The group has struggled to lift Cell C out of its struggles to compete with Vodacom and MTN.
On Thursday Cell C’s second-biggest shareholder, Net1 UEPS Technologies, said it had also written down to zero the value of its stake in the company
Net1 chief executive Herman Kotze said the decision to impair the value of their investments would have no impact on Cell C’s operations or the proposed transactions it is pursuing.