Blue Label Experiences Revenue and Earnings Decline in First Half of 2025 Financial Year

Blue Label’s financial performance for the first half of the 2025 financial year showed a decline in both revenue and earnings, primarily driven by the struggles of its Comm Equipment Company (CEC) segment.

The company, which owns a non-controlling stake in Cell C via its subsidiary, The Prepaid Company (TPC), released its interim results for the six months ending 30 November 2024. During this period, Blue Label’s total revenue fell by 4%, totalling R7.2 billion.

However, when considering the gross revenue from “PINless top-ups,” prepaid electricity, ticketing, and universal vouchers, Blue Label’s total revenue effectively increased by 8%, reaching R47.4 billion.

Despite the increase in total revenue from these sources, the company’s earnings saw a decline. Earnings per share dropped by 4%, to 43.98 cents per share, while headline earnings per share showed a slight improvement, holding steady at 46.01 cents per share.

Blue Label’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) decreased by 6%, from R697 million to R653 million. Core headline earnings, however, saw a small increase, rising by R5 million, from R419 million to R424 million.

The company pointed to three main reasons for its earnings decline:

• A shrinking subscriber base for CEC.
• Lower average revenue per user (ARPU).
• Increased finance costs, particularly related to the sale of CEC handset receivables.

The proceeds from the sale of handset receivables were transferred from CEC to TPC and ultimately to Cell C through the acquisition of airtime. Blue Label holds a 49.53% participatory interest in Cell C but does not control the company.

The company’s other segments showed mixed results. The Africa Distribution segment saw a 4% decline in revenue, reaching R7.1 billion, although prepaid electricity revenue saw a significant 16% increase. The Solutions division reported a 14% drop in revenue, but its core headline earnings surged by 37%, rising to R30 million. Meanwhile, the Corporate segment narrowed its losses, with EBITDA improving by 18%.

On the debt side, Blue Label’s position worsened, as finance costs rose by 16%, reaching R532 million. Net borrowings also increased to R4.38 billion. As of November 2024, the company’s cash and cash equivalents stood at R857 million, a slight decrease from R896 million at the start of the period.

Main Image: Blue Label Telecoms