Telecommunications company Celcom Group, listed on the JSE's Alternative Exchange, failed to halt the downward trend in its share price with the release of its maiden interim results.
On Friday, the company, which listed in November, posted its interim results for the nine months ended 31 December 2006. Due to a change in year-end from 31 March to 30 June, Celcom will this year have a 15-month financial year.
The company reported revenue for the period of R271 million, up 81.4% on the comparative nine-month period to end-December 2005, with gross profit increasing 63.6% to R29 million.
Celcom's weighted headline earnings per share for the period increased 13.7% to 2.49c, while weighted earnings per share declined 42% to 1.27c.
Celcom CEO Stefano Brachini said this morning the management team was pleased with the company's performance. "We have performed very well on a comparative basis and the robust part of the year is still coming."
In its statement to shareholders, Celcom explained the impact of International Financial Reporting Standards on its acquisition of V Cellular. The purchase, effective at the beginning of July, met all conditions early in October 2006.
"The profit earned prior to all the conditions being met is set off against the cost of the acquisition on the balance sheet. The interim results for the period include only three months of V Cellular profits. In order to provide comparability with future periods, and as additional disclosure, core earnings have been calculated, whereby the pre-acquisition profits are added back so as to include six months of V Cellular earnings at the interim stage," it said.
Despite Celcom's pre-listing prospectus forecasting R684 million revenue for the full 15 months to end-June, Brachini is confident the company will reach its targets.
"If you look at these figures, you can see our acquisitions didn't feature. Additionally, we have some nice figures on the export side, which were not included. I am confident we will reach the forecasts set out in our prospectus," he explained.
As for the company's declining share price, Brachini said the management team was unsure what caused the leap to R1.40 at the beginning of the month. Similarly, he said last week's price reductions came before the issuing of its interims and therefore are unlikely to be related.
Celcom's share price closed 3.7% down at R1.30 on Friday.
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