Blue Label Telecoms has advised shareholders that basic, headline and core headline earnings per share for the year ended 31 May 2023 will decrease by more than 20% in comparison to the year ended 31 May 2022.
Earnings per share will drop by between 72% and 76%; headline earnings per share will decline by 62% to 66%; and core headline earnings per share will be down between 60% and 64%.
Excluding extraneous contributions of R523-million in the current year and a non-recurring income of R214 million in the prior year, core headline earnings increased by R78-million (9%) from R847-million to R925-million. Core headline earnings per share increased by 9% from 96.56 cents per share in the prior year to 104.83 cents per share.
Excluding the extraneous contributions and non-recurring income from both the current and prior years, earnings per share and headline earnings per share increased by 8% to 100.35 cents per share and by 9% to 101.24 cents per share, respectively.
The predominant extraneous contributions to the May 2023 basic, headline and core headline earnings per share, resulting from the recapitalisation transaction of Cell C, were attributable to:
* Expected credit losses and fair value movements of R88-million;
* Loss on modification of a financial instrument of R57-million primarily due to the renegotiation and reclassification of the CEC deferral amount of R1,1-billion, owed by Cell C, from ‘trade and other receivables’ to ‘loans to associates and joint ventures’;
* Finance costs of R322-million resulting from increased borrowings related to airtime sale and repurchase obligations, as well as the issue of Class A Preference shares;
* Finance income of R238-million resulting from a loan to Cell C for its debt funding requirements;
* * A partial reversal of R962,5-million relating to the initial impairment of R2,5-billion of Blue Label’s investment in Cell C as at 31 May 2019, in line with an improvement in its equity valuation; and
* Recognition of the Group’s share of Cell C’s net accumulated losses for the period from 1 June 2019 to 31 May 2023, limited to R1,329-billion, being the aggregate of the partial reversal of the initial impairment of R962,5-million of Blue Label’s investment in Cell C, as well as additional investments therein amounting to R366-million.