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BUSINESS MODEL
AND STRATEGIC
OBJECTIVES
LEADERSHIP
GOVERNANCE
OPERATING
PERFORMANCE
SHAREHOLDERS’
INFORMATION AND
ADMINISTRATION
FINANCIAL
PERFORMANCE
BLUE LABEL INTEGRATED ANNUAL REPORT 2014
99
FINANCIAL DIRECTOR’S
REPORT
CONTINUED
Although the South African distribution segment
continues to dominate contribution to Group
profitability, growth in EBITDA was confined to
3% due to costs incurred for future growth in its
distribution channel as well as margin compression
caused by competitive forces.
The increase in revenue of 2%, effectively equating
to 6% on imputing the gross revenue generated
from “PINless top-ups”, and gross profit margin
increases, resulted in the growth in EBITDA by 3%
to R821 million. These earnings were inclusive of
extraneous costs of R19 million that were incurred
in the settlement of a contractual dispute and the
early termination of a profit share agreement. EBITDA
margins increased from 4.26% to 4.30%.
Net commissions earned on the distribution of
prepaid electricity increased by R20 million to
R133 million (17%) on revenue generated on behalf
of the utilities that increased from R7.2 billion to
R8.8 billion.
Core net profit declined by 2% primarily due to a
reduction in net finance income of R15 million
net of taxation. This was congruent with the
application of cash resources to bulk purchasing
transactions, early settlement discounts and the cost
of funding acquisitions.
INTERNATIONAL DISTRIBUTION
2014
R’000
2013
R’000
Growth
R’000
%
growth
EBITDA
(13 961)
(31 000)
17 039
55
Share of (losses)/profits from associates
and joint ventures
(56 249)
(49 036)
(7 213)
(15)
– Ukash
14 089
7 291
6 798
93
– Oxigen Services India
(3 259)
(565)
(2 694)
(477)
– Blue Label Mexico
(60 844)
(51 124)
(9 720)
(19)
– Other
(6 235)
(4 638)
(1 597)
(34)
Core net loss
(59 987)
(73 294)
13 307
18
– Equity holders of the parent
(47 862)
(50 685)
2 823
6
– Non-controlling interests
(12 125)
(22 609)
10 484
46