Cell C appoints new CFO 

Cell C announced the appointment of El Kope as its chief financial officer (CFO) as part of CEO Jorge Mendes’ plan to stabilise leadership at the company and attract talent. 

Kope, a chartered accountant, joined Cell C in September 2022 as the Executive Head for Financial Planning & Analysis. 

She stepped up to acting CFO following the departure of the previous incumbent in August 2023. 

Kope has vast experience from her tenure at large multinational corporations such as DHL, Coca-Cola Africa, and South African Breweries (SAB). 

Of particular importance to Cell C is her experience in managing the turnaround of various businesses. She does, however, lack experience in the telecommunications field.  

Cell C said Kope, as acting CFO, has improved Cell C’s governance and stabilised the company’s financial reporting. 

As CFO, Kope will oversee the transition to align Cell C’s financial year with Blue Label’s, which is Cell C’s largest shareholder. 

However, Kope’s main task will be to support Mendes’ plan to turn the company’s fortunes around and reclaim its position as South Africa’s third largest telecoms operator. 

The size of this task is shown by the company’s loss of R337 million for the six months to the end of November 2023.

This was revealed in Blue Label Telecoms’ results for the six months ending 30 November 2023. 

The results paint a stark picture of Cell C’s deteriorating financial performance and the urgent need for a turnaround. 

The mobile operator’s revenue declined by 6.7% compared to the same period last year to R5.96 billion. 

Acting chief financial officer at Cell C, El Kope, said that this decline was due to an accounting treatment change for some parts of the business.

Cell C is now regarded as an agent rather than a principal for certain sales. When normalising for this, Cell C’s like-for-like revenue became R6.74 billion and grew by 5.49%.

Despite this, Cell C swung from a profit of R5.8 billion to a loss of R336.7 million. This is due to the previous period’s financials being skewed by Blue Label’s recapitalisation of the operator. 

The latest recapitalisation included a R1.46 billion loan from Blue Label to Cell C, which was used to repay Cell C lenders. The lenders received only 20% of their claimed loans.

The recapitalisation provided temporary relief, but Cell C’s long-term viability remains uncertain, especially considering its poor balance sheet.

Cell C’s balance sheet for its full-year 2022 shows that it has assets of R5.79 billion and liabilities of R15.09 billion. It translates into negative equity of R9.294 billion.

Simply put, it shows Cell C cannot honour its current liabilities, including its short-term borrowings, with its assets. This means Cell C is technically insolvent.

To turn this situation around will be extremely difficult.