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BLUE LABEL INTEGRATED ANNUAL REPORT 2016
32
Financial Director’s report
continued
Finance income
Finance income totalled R194 million,
of which R64 million was attributable
to interest received on cash resources
and R130 million to imputed IFRS
interest adjustments on credit
afforded to customers. On a
comparative basis, interest received
on cash resources amounted to
R31 million and the imputed IFRS
interest adjustment to R142 million.
The increase in interest received from
cash resources was directly
attributable to growth in revenue,
partially offset by the utilisation of
funds for financing and investing
activities.
Share of losses from
associates
Share of losses primarily related to
Oxigen Services India in which the
Group’s share of losses equated to
R28 million.
Share of losses from joint
ventures
The Group’s share of losses was
attributable to losses incurred by
Blue Label Mexico, of which the
Group’s share equated to R63 million.
This amount was partially offset by a
net share of profit of R19.7 million
generated by 2DFine Holdings
Mauritius.
Non-controlling interests
Non-controlling interests comprises
minority share of profits in Cigicell,
Transaction Junction, Via Media and
Blue Label Data Solutions, the total
of which equated to a growth of
R36 million inclusive of a reduction in
minority share of losses in Africa
Prepaid Services.
Of this growth, R15.6 million was
attributable to Cigicell and
R3.6 million to Transaction Junction.
Non-controlling share of losses
declined by R7.7 million, in line with
the decline in losses in the APS Group.
Viamedia increased by R6 million from
R8.3 million to R14.3 million as the
comparative year.
Core headline earnings
Core headline earnings increased by R119 million (21%) to R685 million. This
equated to headline per share of 100.35 cents.
Segmental report
2016
R’000
2015
R’000
Growth
R’000
%
growth
South African
Distribution
Revenue
25 722 540
21 657 891 4 064 649
19
Gross profit
1 582 743
1 444 730 138 013
10
EBITDA
1 133 433
1 038 252
95 181
9
Core net profit
750 951
684 756
66 195
10
Core headline earnings
751 086
683 744
67 342
10
Gross profit margin (%)
6.15
6.67
EBITDA margin (%)
4.41
4.79
Growth in revenue of 19% was
organically achieved through
increased sales by expanding
distribution channels. Revenue
generated on “PINless top-ups”
increased by R1.4 billion from
R2.7 billion to R4.1 billion, equating
to effective growth in South African
Distribution revenue of 23%, in that
only the commission earned thereon
is recognised.
Net commissions earned on the
distribution of prepaid electricity
continued to increase, escalating by
R33 million to R197 million (20%) on
turnover of R12.1 billion generated
on behalf of the utilities.
Although there was a contraction in
gross profit margins, gross profit
increased by R138 million (10%) to
R1.6 billion. The decline in margins
from 6.67% to 6.15% was directly
attributable to revenue generated
from large distributors that were
afforded additional margin incentives.
This in turn manifested itself in an
element of the growth in revenue.
The resultant growth in EBITDA of 9%
to R1.1 billion equated to an EBITDA
margin of 4.41%.
Contribution to core net profit
increased by R66 million to
R751 million (10%).
2016
R’000
2015
R’000
Growth
R’000
%
growth
International
Distribution
EBITDA
44 152
35 379
8 773
25
Share of (losses)/profits
from associates and
joint ventures
(70 283)
(81 267)
10 984
14
– Ukash
—
12 004
(12 004)
(100)
– Oxigen Services India
(27 672)
2 621
(30 293)
(1 156)
– Blue Label Mexico
(63 293)
(88 508)
25 215
28
– 2DFine Holdings
Mauritius
19 734
(7 574)
27 308
361
– Mpower
948
190
758
399
Core net loss
(29 352)
(46 958)
17 606
37
Core headline loss
(59 304)
(80 025)
20 721
26
– Equity holders of the
parent
(59 327)
(72 337)
13 010
18
– Non-controlling
interests
23
(7 688)
7 711
100