Blue Label Telecoms yesterday reported its final results for the year ended 31 May, after its first year on the JSE.
The company showed strong growth in comparison to the expectations of its pre-listing statement from the same period last year. Revenue jumped by 15.1%, to R12.55 billion, compared to the pre-listing forecast, while core earnings shot up from an expected R234 million to R270 million.
While company CFO David Rivkind says he is pleased with the company's financial performance over the year, he is quick to point out that the audited financial statement does not reflect the true performance of the business.
Because the company only listed in November last year, alongside its audited results, it reported pro forma. Rivkind says the pro forma results are a true reflection of the company's successes.
Pro forma earnings are almost R1 million higher than actual earnings for the year-end, sitting at R269 million. The core earnings in the pro forma report are significantly higher at R371 million.
As was stipulated in the pre-listing statement, Blue Label did not declare any dividends this year. However, the company says it will initiate a competitive dividend policy from the financial year commencing 1 June 2010.
India losses
Blue Label has made some headway with its international businesses in Latin America and Australia. However, India-based Oxigen Services, in which Blue Label has a stake, made a loss.
Blue Label recently increased its stake in the business to 38.85% and its share of the losses amounts to $2.5 million. However, Blue Label joint-CEO Brett Levy says investment in the Indian business is a "no brainer".
According to Levy, the losses were expected and planned for. "Any business would like to have seen a profit sooner, but the performance was expected and will not impact business."
His brother, Mark Levy, joint-CEO of Blue Label, adds that the initial investment in Oxigen will fund the infrastructure. "The services we are planning to launch on that infrastructure are innovative and exciting. We expect the business to do well."
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