Gross profit for Blue Label Telecoms hits billion rand mark - CNBC Africa

Gross profit for Blue Label Telecoms hits billion rand mark


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Blue Label Telecoms is a is a telecommunications and transnational services firm. PHOTOS: Getty Images

The group, which released results on Wednesday, reported that revenue for the year ended 31 May 2014 was recorded at 19.4 billion rand from 18.9 billion rand in 2013. Operating profit also increased to 722.8 million rand for the period under review from 645.6 million rand in 2013.

Gross profit for the period increased to 1.3 billion rand from 78 million rand in the previous comparative period. The group’s gross profit margin increased from 6.7 per cent to 6.9 per cent.

“The gross profit margin increase was mainly attributable to the application of cash resources to bulk inventory purchases at favourable rebates and early supply settlement discounts,” Blue Label Telecoms said in a statement.

“Further growth was attributable to increases in commissions earned on the distribution of prepaid electricity, with turnover generated on behalf of the utilities, escalating to 8.8 billion rand.”

[DATA BLU:Blue Label Telecoms] is a telecommunications and transactional services firm that specialises in the provision of prepaid airtime and mobile data products, online and offline electricity vouchers and financial services, among others.

(WATCH VIDEO: Blue Label Telecoms post bitter sweet results)

Depreciation, amortisation and impairment charges decreased from 67.9 million rand in 2013 to 65.1 million rand for the period under review.  

Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased 10 per cent to 788 million rand.

Headline earning per share increased six per cent to 67.9 cents in 2014 from 64.1 cents in previous year.

(READ MORE: Blue Label Telecoms HEPS up 7% despite revenue decline)

Headline earnings increased six percent to 450.8 million rand from 424.5 million rand in 2013.

“Although the South African distribution segment continues to dominate contribution to Group profitability, growth in EBITDA was confined to 3 per cent due to costs incurred for future growth in its distribution channel as well as margin compression caused by competitive forces.”

EBITDA for the group’s South African distribution increased to 821.3 million rand from 796.4 million rand in 2013.

EBITDA for the group’s international distribution was significantly lower than that of the South African distribution, being recorded at 13.9 million rand for the period from 31 million rand in 2013.

 The international distribution comprises of Ukash, Oxigen Services India, Blue Label Mexico and others.

Revenue for the group’s mobile segment grew one per cent to 152.6 million rand from 151.4 million rand in 2013. Brands that fall under the mobile segment include Cellfind, Panacea Mobile and Blue Label Engage.

Revenue for the solutions segment grew 20 per cent to 145.3 million rand from 120.7 million rand. Brands under the solutions segment include Blue Label Data Solutions, Velociti and Forensic Intelligence Data Solutions.

“The group’s distribution footprint is perfectly positioned to offer a money transfer solution that provides reach across all sectors of the South African economic landscape. Accessibility and convenience are the driving factors in our goal to fulfil the needs of consumers,” said Blue Label Telecoms.