Earnings jump for Cell C owner Blue Label Telecoms

Blue Label Telecoms has released its interim results for the six months ended 30 November 2021, showing a 20% increase in gross profit from R1.14 billion last year to R1.36 billion.
Its gross profit margin also increased from 11.87% to 14.93%, and it generated revenue of R9.1 billion.
The company reported generating positive cash flows of R862 million from its operating activities.
Blue Label reduced interest-bearing debt from R2.32 billion last year to R1.97 billion.
Headline earnings per share increased by 48.6%, from 40.06 cents to 60.86 cents per share.
Similarly, core headline earnings jumped from 42.70 cents per share to 62.69 cents.
Outside of the period covered by these results, Blue Label reported that The Prepaid Company Proprietary Limited renegotiated a further extension of its Investec facility to 31 March 2023.
The unit’s total debt was reduced by R340 million — from R1.56 billion on 30 November 2021 to R1.22 billion to date.
“Thereafter, the exposure to Investec is required to be reduced by a further R30 million per month in order to reduce the maximum facility balance to R1.01 billion,” Blue Label stated.
Share short deal involving Cell C solvency
Blue Label concluded agreements with the 40% shareholders of each AV Technologies Limited (Mauritius) and Airvantage Proprietary Limited (South Africa) on 14 December 2021.
Under the terms of the deal, these companies terminated the put options — short bets, essentially — they had placed against Blue Label’s stock.
“On 15 December 2021, Blue Label concluded a put option agreement with Digital Ecosystems Proprietary Limited, formerly Blue Label Mobile Group, in terms of which the latter acquired the right to put up to 40% of the shares in Airvantage to BLT by no earlier than 15 December 2022 for a maximum amount of R110 million,” the company stated
“If Cell C Limited, through a board resolution, passes a solvency and liquidity test prior to 15 December 2022, the put option will be terminated.”