Cell C has reported a significant improvement in its financial position after completing a major restructuring, with the South African mobile operator moving from negative equity of R8.30 billion in 2025 to positive equity of R3.35 billion for the year ended 31 May 2026.
The results, reported by BusinessTech and detailed in Cell C’s financial disclosure show a business that has substantially reduced its debt while continuing to grow in several parts of its operations.
From billions in negative equity to positive
Cell C’s balance sheet has undergone a marked change over the past financial year. At the end of its 2025 financial year, the company had total liabilities of R13.38 billion against assets of R5.07 billion, leaving it with negative equity of R8.30 billion.
By May 2026, total assets had increased to R10.24 billion, while liabilities had fallen to R6.89 billion. This left the group with positive equity of R3.35 billion.
The shift followed a series of restructuring and pre-listing transactions, including Cell C’s listing on the Johannesburg Stock Exchange in November 2025, according to Cell C.
One of the most significant balance-sheet adjustments came when TPC, a subsidiary of Blue Label Telecoms, waived R4.1 billion of debt owed by Cell C. A further R0.5 million was converted into Cell C shares.
The transactions resulted in a non-cash gain of R3.53 billion from the derecognition of loans.
Cell C’s financial restructuring has also substantially reduced its debt burden, as net debt declined by 64.5%, from R5.69 billion in 2025 to R2.02 billion in 2026. Its net debt-to-adjusted EBITDA ratio improved from 4.29 times to 1.56 times.
Adjusted EBITDA, excluding listing and restructuring costs, rose by 16.9% to R2.38 billion.
The company has previously moved towards an asset-light model, including shutting down its own radio access network and using infrastructure provided by MTN and Vodacom.
That approach has reduced infrastructure costs while allowing Cell C to continue providing mobile services without maintaining its own nationwide radio network.
The improved balance sheet was accompanied by growth across several operating areas. Cell C reported total IFRS revenue of R12.64 billion for the year, up 13.5% from R11.14 billion.
Its prepaid business was a notable contributor, with net revenue increasing by 9.7% to about R5.8 billion.
Prepaid subscribers increased by 1.3 million to 8.1 million, while wholesale revenue climbed 20% to R1.76 billion.
Data traffic also increased sharply, rising by 131%, while mobile virtual network operator subscribers grew by 27.3%.
Postpaid service revenue was more subdued, increasing 1.2% to R2.3 billion. Cell C said this reflected the clean-up of its subscriber base and changes to how churn is reported.
Cell C also completed the acquisition of 100% of Comm Equipment Company for R2.02 billion.
The deal returned control of postpaid device financing and procurement to Cell C.
CEC contributed R907 million in revenue and R273 million in adjusted EBITDA during the second half of the financial year.
The company’s reported net profit came in at R4.16 billion, an 87.6% increase from R2.22 billion in the previous year.
However, the profit figure includes substantial once-off, non-cash gains linked to the restructuring, including the R3.53 billion loan derecognition gain and R474 million from lease termination gains.
Cell C still faces liquidity pressure
Despite the improvement, the latest figures do not mean Cell C has completely moved beyond its financial challenges.
The company ended the year with a working capital deficit of R1.39 billion, with current liabilities of R4.78 billion exceeding current assets of R3.40 billion.
Cell C acknowledged that it continues to face liquidity pressures, although its overall financial position has improved significantly.
The company also faces changes in the regulatory environment, including new data rollover regulations expected to take effect in January 2027.
Operating expenses increased by 17% during the year, partly due to listing and restructuring costs, supplier debt cancellation fees, the CEC acquisition and higher IT costs linked to the transition
Cell C shareholders will not receive a dividend for the year ended 31 May 2026.
The board did not declare a dividend, in line with previous guidance, with the company retaining cash to support liquidity and its ongoing financial restructuring.
Meanwhile, Cell C group CEO Jorge Mendes described the financial year as ‘a year of two halves.’
‘The first half was defined by the successful completion of our restructuring and initial public offering, leaving the group with a significantly stronger balance sheet and positioning us to execute our strategy as a newly listed company,’ Mendes said.
‘The second half was about execution, integrating Comm Equipment Company (CEC), operating as a single business, and demonstrating the growth potential of our asset-light, partnership-led platform.’
Mendes said the company remains focused on operational momentum despite constrained consumer spending, intense competition in the telecommunications market and an evolving regulatory environment.
‘We expect prepaid to remain a key contributor to growth, supported by further market gains, while postpaid is anticipated to show encouraging year on year improvement,’ he said.
Be the first to know – Join our WhatsApp Channel for content worth tapping into! Click here to join!
Also read:
Picture: Getty Images
