Blue Label Telecoms, Cell C’s largest shareholder, released its annual results for the year ended May 31, 2024, highlighting the mobile operator’s financial performance. Despite a R22.4 million before-tax loss, Cell C demonstrated operational improvements and a positive outlook.
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While revenue declined slightly from R11.85 billion to R11.28 billion, Cell C’s net profit after taxation improved to R298 million, excluding extraneous income related to the recapitalization transaction. This marked a significant improvement compared to the previous year’s loss of R2.30 billion.
Despite remaining technically insolvent, Cell C’s financial position has strengthened. Negative equity decreased from R4.0 billion to R3.2 billion, indicating progress in cleaning up its balance sheet.
The recapitalization process involved The Prepaid Company (TPC) purchasing R1.2 billion of prepaid airtime and Comms Equipment Company (CEC) selling a portion of its handset receivable book to generate funds.
TPC faced a reduction in core headline earnings due to certain rebates and discounts from Cell C. However, the overall improvement in negative equity is a positive sign for Cell C’s turnaround plan.
Under the leadership of CEO Jorge Mendes, Cell C has implemented a strategic turnaround plan. Mendes focused on stabilizing leadership, building a strong team culture, and addressing operational and financial issues.
Cell C’s network performance has also seen significant improvements. The mobile operator’s average download and upload speeds have increased by 41% and 32%, respectively, compared to the previous year. Cell C’s average latency has also improved by 17%.
These improvements have contributed to Cell C’s ranking as the third-best network in South Africa, surpassing Telkom. The mobile operator’s partnership with Vodacom through a virtual radio access network (RAN) has been instrumental in enhancing network quality and coverage.
Cell C’s progress demonstrates its commitment to improving its financial position and providing better services to its customers. As the mobile operator continues to implement its turnaround plan, it is well-positioned for future growth and success.
