Cell C, a leading mobile provider in South Africa witnessed a revenue declined from R13.9 billion at the end May 2021 to R13.4 billion this year, while it suffered a net loss before taxation of R2.3 billion.
Blue Label Telecoms, a major shareholder in Cell C, saw its revenue decline by 5% to R17.8 billion in the year to end May.
Blue Label also provides a range of services, like bulk prepaid products to retailers, including starter packs SIM cards, prepaid airtime, and ticketing for events.
Its core headline earnings hit R1 billion, or 121.01 cents per share, up from 89.65 cents per share in the corresponding period in 2021. Gross profit increased by R548 million to R2.93 billion.
Net commissions earned on the distribution of prepaid electricity increased by R18 million to R298 million.
The company said it continues to “increase market share and bolster its product and services mix to defend and grow its positions in the market.”
As a result of the financial challenges faced by Cell C, Blue Label wrote off the carrying value of its 45% shareholding in the telecommunications company. The company paid R5.5 billion for the stake in 2017. Cell C is struggling with a debt burden of R7.3 billion.
The long-delayed recapitalization of Cell C is expected to be concluded by mid-September. Blue Label said the business is still regarded as a going concern.
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The current financial statements received a qualified audit opinion, due to the “inability to obtain sufficient appropriate audit evidence to support the use of the going concern assumption” for Cell C – as the recapitalisation and restructuring of the operations are still in progress.
The company stressed that the matter has no impact on its financial statements due to the investment in Cell C being fully impaired in prior periods.
Source: News 24
