Cell C has swung hard into the black, reporting a R4.1bn net profit for the 2017 financial year ended 31 December. The mobile operator, however, reported a small, “normalised” loss of R26m — effectively break-even — once the once-off effects of the 2017 recapitalisation of the business are stripped out.
The full-year results are the first numbers to be published by Cell C following its recapitalisation and restructuring concluded in August 2017, in terms of which it reduced its interest-bearing debt from R17.7bn to R6.8bn, the company said at a media conference in Johannesburg on Tuesday.
Total revenue for the year was R15.7bn, up 7% from 2016. Earnings before interest, tax, depreciation and amortisation rose by 151% to R7.8bn. Active subscriber numbers rose by 6% to 16.3m.
The numbers were inflated by a once-off gain of R4.1bn arising from the recapitalisation transaction.
Cell C reported a 12% growth in service revenue to R13.1bn and a sharp reduction in capital expenditure, which fell 47% to R1.2bn.
“While our turnaround strategy was put in place in 2012, the recapitalisation of Cell C last year has really allowed us to create a strong foundation for the business. Our plans now are to build out this strategy and really accelerate our growth and investment,” said Cell C CEO Jose Dos Santos.
He said the company is on track with its business plan, and indicated that capital expenditure will rise in 2018 to about R3bn. He declined to say what impact this will have on the profitability of the business in 2018.
The increase in service revenue was largely the result of increased data volumes, which rose 90%. Data revenue rose by 29%. The effective cost per megabyte of data fell by 36% during the year. The number of smartphones on the Cell C network increased by 21% year on year to 9.2m devices. Cell C’s current active data customers increased to 12.6m.
Voice revenue fell by 4%, in line with a 4% reduction in the average cost of calls.
Average revenue per user (Arpu) was R73, down 4% from 2016, but contract Arpu showed signs of life, rising 7% to R209.
Cell C has also reported good growth in its fibre-to-the-home base, increasing customer numbers to almost 14 000 from 1 800 at the end of 2016. — © 2018 NewsCentral Media