Mystery surrounds R4.6 billion Cell C profit
There is uncertainty around the latest Cell C profit of R4.6 billion, with the mobile operator flip-flopping on whether the figure is accurate.
Blue Label Telecoms published its annual financial statements for the 2023 financial year on Wednesday.
In these statements, Blue Label shows that Cell C swung from a R2.4 billion loss to a R4.9 billion profit over the last financial year.
The significant profit increase was particularly striking as Cell C’s revenue declined from R13.3 billion to R11.9 billion over the same period.
It was assumed that the profit was affected by things outside the company’s earnings, including income linked to Cell C’s recapitalisation in August 2022.
However, something strange happened when Daily Investor and IT publication MyBroadband started to delve into the numbers.
When MyBroadband reported on Cell C’s R4.6 billion profit, the mobile operator called the publication’s editor and demanded that the article be removed as the profit figure was inaccurate.
Clearly, Cell C was taken by surprise by the huge profit reported by Blue Label, as it did not align with what its own numbers showed.
When Daily Investor contacted Cell C for further details on the R4.6 billion net profit after taxation, it could not immediately explain the number.
Instead, Cell C told Daily Investor that it was “seeking clarity” on the profit Blue Label reported.
It should be noted that Cell C is not a subsidiary of Blue Label and has its own board and finance department.
Therefore, Blue Label’s financial reporting on Cell C should come from the mobile operator. It is surprising that it would have to seek clarity on its own finances.
Cell C finally told Daily Investor that the R7.4 billion jump in profit was “mainly due to the recapitalisation entry below the EBITDA line and the audit sums and balance sheet clean-up”.
This did not explain much, and Daily Investor asked for a more detailed explanation about the accounting behind the profit with specific numbers.
However, Cell C did not provide any further information regarding the profit despite the request for information.
Cell C revenue and profit reports (from Cell C)
Date | Revenue (billion) | Net profit (billion) |
31-Dec-13 | R11.502 | -R3.539 |
31-Dec-14 | R11.634 | -R4.867 |
31-Dec-15 | R13.228 | -R5.644 |
31-Dec-16 | R14.646 | +R0.541 |
31-Dec-17 | R15.715 | +R4.112 |
31-Dec-18 | R15.667 | -R7.337 |
31-Dec-19 | R15.084 | -R4.088 |
31-Dec-20 | R14.135 | -R5.506 |
31-Dec-21 | R13.381 | +R2.453 |
31-Dec-22 | Not reported | Not reported |
Cell C revenue and profit reports (from Blue Label Telecoms)
Date | Revenue | Net profit |
31-May-19 | R15.405 | -R8.021 |
31-May-20 | R14.593 | -R10.687 |
31-May-21 | R13.955 | +R2.453 |
31-May-22 | R13.303 | -R2.449 |
31-May-23 | R11.854 | +R4.631 |
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