When Blu Label Unlimited released its financial results for the six months ended 30 November 2025, the headline number was jarring: a R5.2 billion loss. But the company says that figure tells only part of the storyand that its core operational performance was actually solidly profitable.
The discrepancy, Blu Label explains, stems from the accounting treatment of its complex dealings with Cell C, culminating in the mobile operator’s listing on the JSE.
What the Numbers Say
Under IFRS Accounting Standards, Blu Label reported a net loss of R5.2 billion. However, when presenting normalised earningswhich exclude the impact of strategic transactionsthe company says it achieved an after-tax net profit of R389 million.
“The group’s financial results for the six-month period were materially impacted by a series of strategic transactions,” Blu Label stated.
These included:
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The acquisition of control of Cell C
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The pre-listing restructuring, which involved the disposal of Comm Equipment Company (CEC)
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The partial disposal of Cell C
Breaking Down the R5.2 Billion Loss
The reported loss stems primarily from a R6 billion loss recognised on the disposal of Blu Label subsidiary The Prepaid Company’s investment in Cell C and CEC, following Cell C’s listing at a market value of R9 billion.
This R6 billion loss was partially offset by an R841 million gain on the remeasurement of the previously held interest when TPC acquired control of Cell C in September 2025.
The Normalised View
To provide what it calls “a clearer understanding of the group’s core performance,” Blu Label presented normalised financial information that excludes:
“These transactions, although strategically important, introduce a degree of accounting complexity that has created volatility in the group’s underlying performance,” the company said.
“Accordingly, in order to provide a clearer understanding of the group’s core performance, normalised financial information has been presented.”
Blu Label stressed that the normalised information “is not based on IFRS Accounting Standards and does not form part of the primary financial statements of the group.”
What Comes Next
Following Cell C’s listing, Blu Label continues to hold a 49.47% direct stake in the mobile operator. This equity-accounted contribution will include CEC’s earnings following its integration into Cell C.
“The group’s normalised earnings will incorporate its proportionate share of Cell C’s profitability, which will be added to the core headline earnings base of R398 million,” Blu Label said.
“This is expected to provide a more comprehensive view of the Group’s total earnings while enhancing earnings visibility.”
Dividends Resume
Despite the accounting volatility, the Blu Label board has resumed dividend distributions, declaring an interim dividend of 43.56 cents per share.
“This reflects confidence in the group’s financial position, cash generation and sustainable earnings outlook,” it said.
The Bottom Line
For investors, the Blu Label results are a lesson in the gap between accounting standards and economic reality. The R5.2 billion IFRS loss is realbut so is the R389 million normalised profit.
The company’s future earnings will now be tied to Cell C’s performance. Whether that proves a blessing or a burden remains to be seen. For now, the board is betting on the former.
