- Blue Label, which wrote off its investment in Cell C, posted a 5% decline in revenue in 2022.
- Cell C suffered a net loss before taxation of R2.3 billion.
- The plan to restructure Cell C's debt burden of more than R7 billion is expected to be concluded by mid-September.
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Blue Label Telecoms, a major shareholder in Cell C, saw its revenue decline by 5% to R17.8 billion in the year to end May.
Cell C's revenue fell from R13.95 billion in the previous year to R13.3 billion. It reported a net loss before tax of almost R2.5 billion.
Blue Label also provides a range of services, like bulk prepaid products to retailers, including starter packs SIM cards, prepaid airtime, and ticketing for events.
Its core headline earnings hit R1 billion, or 121.01 cents per share, up from 89.65 cents per share in the corresponding period in 2021. Gross profit increased by R548 million to R2.93 billion.
Net commissions earned on the distribution of prepaid electricity increased by R18 million to R298 million.
The company said it continues to "increase market share and bolster its product and services mix to defend and grow its positions in the market."
As a result of the financial challenges faced by Cell C, Blue Label wrote off the carrying value of its 45% shareholding in the telecommunications company. The company paid R5.5 billion for the stake in 2017. Cell C is struggling with a debt burden of R7.3 billion.
The long-delayed recapitalisation of Cell C is expected to be concluded by mid-September. Blue Label said the business is still regarded as a going concern.
The current financial statements received a qualified audit opinion, due to the "inability to obtain sufficient appropriate audit evidence to support the use of the going concern assumption" for Cell C - as the recapitalisation and restructuring of the operations are still in progress.
The company stressed that the matter has no impact on its financial statements due to the investment in Cell C being fully impaired in prior periods.