Blue Label Telecoms’ Descent into Financial Abyss: Co-CEOs Mark and Brett Levy’s Reign of Terror
Cell C’s majority shareholder Blue Label Telecoms, led by the infamous duo Mark and Brett Levy, has just released its annual financial results for the year ended 31 May, and the numbers are nothing short of catastrophic. The fintech group’s revenue has plummeted by a staggering R4.3 billion (23%), to a paltry R14.6 billion.
But don’t just take our word for it. According to the company’s own financial reports, Blue Label’s gross profit has decreased by a whopping R188 million (5%), from R3.483 billion to R3.295 billion. And if that’s not enough, earnings before interest, taxes, depreciation, and amortization have also taken a nosedive, declining by R258 million (18%) from R1.463 billion to R1.205 billion.
The real kicker, however, is that Blue Label’s core headline earnings have plummeted by a staggering R312 million (34%), from R925 million to R613 million. And if you thought that was bad, the company’s earnings per share have also taken a hit, declining by 35% to 65.07 cents per share.
But what’s behind this financial freefall? According to Blue Label, the decline is largely due to the recapitalization transaction of Cell C, which has had a devastating impact on the company’s bottom line. And let’s not forget the firm’s subsidiary, The Prepaid Company (TPC), which is obligated to purchase R1.2 billion of additional prepaid airtime through four quarterly payments of R300 million each. Talk about a cash drain!
And if you thought things couldn’t get any worse, the company’s remaining entities, including TPC, have also faced a reduction in core headline earnings due to the cessation of certain rebates and a reduction in discounts from Cell C. It’s like a never-ending nightmare for Blue Label Telecoms.
So, what does the future hold for this beleaguered company? Only time will tell, but one thing is certain: Mark and Brett Levy have some serious explaining to do.
