Blu Label Unlimited Group (BLU) H1 2025 earnings summary

Executive summary

• Strategy is built on eight pillars: technology, product, distribution, energy, treasury/procurement, special projects, postpaid, and Cell C, with a CAPEX-light model and focus on proprietary platforms and data analytics for innovation.

• Product innovation includes Blu Voucher, Ringas, UniPIN, Blu Advance, and Ticketpro, with strong Blu Voucher sales and new emergency electricity top-up products.

• Distribution spans formal, informal, banking, and petroleum sectors, with the Blue Train Group initiative for employment and training.

• Energy segment (Cigicell/BluEnergy) expands from token vending to revenue assurance and green energy production for municipalities.

• Brand and MVNO business showed notable momentum, with recognition for best video experience in South Africa.

Financial highlights

• Effective revenue for the half year rose 8% year-over-year to R47.4 billion (reported revenue R7.2 billion due to PINless accounting).

• Gross profit increased 2% to R1.63 billion, with gross margin up to 22.44%.

• Core headline earnings per share up 0.4% to 47.20 cents.

• EBITDA decreased 6% to R653 million, mainly due to lower CEC subscriber base and higher finance costs.

• Net profit after tax was R395 million; capital and reserves at R5.5 billion.

Outlook and guidance

• Management expects continued growth in gross revenue from universal vouchers and prepaid electricity, supported by NERSA-approved tariff adjustments and increased consumption.

• Focus on executing strategic priorities, integrating postpaid business, investing in digital platforms, and accelerating MVNO and B2B growth.

• No further Blu Label cash injections into Cell C anticipated; Cell C is self-sustaining.

• Dividend payments may resume in 2024, pending board approval.

• Consolidation of Cell C into Blu Label group delayed until after May 2025, pending regulatory approval.