South Africa’s Cell C, a telecommunication company, has reported a 6.7% decline in its half-year revenue from US$333 million to US$311 million. However, according to acting chief financial officer El Kope, this decrease was due to an accounting treatment change for certain parts of the business.
El Kope explained that Cell C is now considered an agent instead of a principal for some sales. When normalising for this, Cell C’s like-for-like revenue becomes US$351 million.
Blue Label, the parent company of Cell C, reported that Cell C incurred a loss of US$17 million for the six months that ended November 30, 2023. This is a significant deviation from the US$303 million profit that Cell C reported for the same period in 2022. However, according to Blue Label co-CEO Mark Levy, last year’s net profit was a one-time event due to Cell C’s recapitalisation.
Levy explained that Cell C underwent recapitalisation to reduce its debt and provide the necessary liquidity to operate. In Blue Label’s annual results for the year ended June 30, 2023, the company reported that Cell C made a profit of US$241 million, including extraneous income of US$360 million. This income was primarily related to the release of the debt in line with Cell C’s compromise to some of its lenders through the recapitalisation. Excluding the recapitalisation, Cell C would have incurred a loss of US$127 million.
Blue Label also reported that Cell C was responsible for a significant portion of its financial income, representing a 169% increase, according to Blue Label’s latest interim results.
