Blue Label Telecoms has released its results for the six months ended 30 November 2018, in which it detailed Cell C’s financial position.
Blue Label bought a 45% shareholding in Cell C through a subsidiary in August 2017, and has subsequently provided the network’s financial performance as part of its results presentations.
The company shared Cell C’s financial statements for the year ended 31 December 2018 this morning- which showed a big loss for the mobile operator.
Cell C recorded revenue of R15.69 billion in 2018, but suffered a total comprehensive loss of R1.27 billion, stated the results.
Operating profit before finance costs and tax stood at R1.43 billion, but finance costs of R4.33 billion pulled the company’s figures down.
Blue Label shares drop
Blue Label said in its results for the six months ended November 2018 that Cell C’s net loss amounted to R634 million.
“The group’s share thereof amounted to R285 million,” said Blue Label.
Cell C’s negative performance has drastically affected Blue Label in recent months, with its share price on the JSE dropping from R14.96 in January 2018 to R5.26 in December 2018.
Many analysts, including Wayne McCurrie from FNB Wealth and Investments, have raised concerns about Cell C’s future prospects.
Blue Label Telecoms co-CEO Brett Levy disagreed about Cell C’s prospects, however, and was upbeat about the operator’s future.
Levy said in December that they have a clear strategy and vision for Cell C, and that it is a “growth story” which will make the operator a very strong number-3 player.
At the time of writing, Blue Label shares were down 3.43% for the day at R5.91.
Changes at Cell C
The latest results follow Blue Label announcing last week that Cell C will get a new minority shareholder.
“Blue Label wishes to announce that Cell C has concluded a binding term sheet with The Buffet Consortium in terms of which Buffet shall… become a minority shareholder in Cell C,” said the company.
It was also announced last week that Cell C CEO Jose Dos Santos was stepping down from his position to take on a consulting role at the company.
Douglas Craigie Stevenson has been appointed as the interim Cell C CEO, until a permanent replacement is found.
Stevenson has served as Cell C COO from October 2017.