South Africa: Cell C Earnings Jump 57 Percent As Debt Falls After Restructuring

South African mobile operator Cell C reported a significant 57.4% increase in full-year headline earnings, reaching R23.37 per share. This growth was driven by a surge in prepaid and wholesale revenue, alongside the successful restructuring that reduced the company's debt by 64%. Group revenue climbed 14% to R12.64 billion, while service revenue grew 6% to R11.64 billion.

Prepaid revenue specifically rose 9.7% as Cell C continued to rebuild its customer base, adding approximately 1.3 million subscribers to reach a total of 8.9 million. Wholesale service revenue increased by a notable 20%, primarily due to growth in its mobile virtual network operator business. Adjusted EBITDA saw a substantial rise of 162% to R5.5 billion, with one-off gains from restructuring contributing significantly.

Excluding those one-off items, adjusted EBITDA still grew by 16.9% to R2.4 billion. This restructuring not only reduced net debt from R5.69 billion to R2.02 billion but also improved the ratio of net debt to EBITDA from 4.29 times to a more manageable 1.56 times. CEO Jorge Mendes highlighted the company's efforts to rebuild its customer base, enhance network performance, and expand its position in South Africa's wholesale mobile market.

The restructuring is seen as crucial for Cell C, as it reduces financial pressure and allows management more focus on operations. The forecast for fiscal 2027 anticipates adjusted EBITDA of about R3 billion, compared to a restated R2.7 billion for 2026.