SHOCKING TRUTH: Blue Label Telecoms’ Core Earnings in Free Fall
In a bombshell announcement, Blue Label Telecoms, the largest shareholder in Cell C, revealed that its full-year core headline earnings per share will take a catastrophic hit, plummeting by a whopping 34% to a mere 65.07c per share. This staggering decline is the result of one-off effects, including the recapitalization of Cell C, which will have a devastating impact on the company’s financial performance.
CELL C’S DARK DAYS AHEAD
Despite reporting a 65% increase in reported core headline earnings per share, the true picture is far more ominous. The company’s underlying core earnings have taken a brutal beating, with a decline of R312-million (34%) from R925-million to R613-million. This staggering decline is a clear indication that the company’s turnaround strategy is failing miserably.
REGULATORY BOTTLENECKS HALT PROGRESS
The company’s inability to provide insight into the reason for this decline is a clear sign of regulatory bottlenecks and internal conflicts. The publication of the results comes as Blue Label works through the regulatory processes to take control of Cell C, a move that is being met with resistance from competitors Vodacom and MTN.
INVESTORS FLEE IN PANIC
In a desperate attempt to salvage the situation, investors have sent Blue Label shares soaring more than 12% higher in intraday trade, a clear indication of panic buying. As at 1.35pm, they were trading 12.02% higher at R4.94 apiece, a far cry from the 30% gain over the past 12 months.
CELL C’S NEW BRAND IDENTITY A LITTLE TOO LATE
The mobile operator’s recent brand refresh, aimed at signaling its readiness to take on the competition, has come too little, too late. The company’s failure to deliver on its promises has left investors feeling betrayed and disillusioned.
READ NEXT: Blue Label’s Desperate Attempt to Control Cell C
The full extent of Blue Label’s financial woes will be revealed when the company reports its annual results next week. One thing is certain, however – the mobile telecommunications industry is about to get a whole lot more interesting.
