Cell C balance sheet confusion

There is a huge discrepancy between the balance sheets that Cell C and Blue Label Telecoms presented to investors today, which raises questions about the financial reporting.

On Wednesday, Blue Label released Cell C’s latest financial results, which showed that the mobile operator remains in financial distress.

Cell C’s total liabilities of R19 billion far exceed its total assets of R15 billion. This leaves the company with a negative equity of R4 billion.

It shows that Cell C is technically insolvent as it cannot honour its current liabilities, including its short-term borrowings, with its assets.

Some good news is that the mobile operator’s balance sheet improved following the Blue Label recapitalisation deal.

In September 2022, Blue Label concluded a series of agreements with Cell C and its financial stakeholders to restructure and refinance the mobile operator.

The deal included restructuring Cell C’s significant debt burden by settling creditors’ claims at 20 cents to the rand.

As a result, Cell C’s current liabilities declined from R20.9 billion to R12.4 billion. However, it was partly offset by increased non-current liabilities and a decline in current assets.

Apart from the change in equity, another thing stood out – the large discrepancy between Cell C and Blue Label’s numbers.

Cell C presented its own balance sheet to investors over the last eight years, which differed hugely from Blue Label’s version.

In September 2022, for example, Cell C reported total assets of R6.2 billion, total liabilities of R12.4 billion, and negative equity of R6.2 billion.

Eight months later, Blue Label reported that Cell C had total assets of R15.0 billion, total liabilities of R19.1 billion, and negative equity of R4.1 billion.

The entirely different balance sheets are nothing new. Since Blue Label started to report on Cell C, its numbers did not reflect what the mobile operator presented.

Cell C told Daily Investor the discrepancy is due to the audit adjustments following the finalisation of the 2018 to 2022 audits, which were completed in Q3 2023 ahead of the Blue Label results release.

“Numbers presented last year in May 2022, September 2022, and August 2022 were unaudited,” Cell C said.

However, that does not fully explain the difference that persisted for as long as Blue Label has reported on Cell C.

The tables below show the difference in Cell C’s balance sheet as reported by Cell C and Blue Label.

What Cell C reported (R million)

DateTotal assetsTotal liabilitiesEquity
31 December 20198 86916 717-7 848
31 December 20207 79821 258-13 460
31 December 202110 72024 456-13 736
31 December 20226 20412 412-6 208

What Blue Label reported (R million)

DateTotal assetsTotal liabilitiesEquity
31 May 202015 64123 654-8 013
31 May 202119 79525 354-5 559
31 May 202218 13926 146-8 008
31 May 202315 01519 062-4 047


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