Cell C reports R8 billion loss with impairments valued at a staggering R6.275bn
Cell C’s net loss after tax included impairments to the value of R6.275bn from an annual impairment test on the carrying value of the property, plant, equipment and intangible assets.
“The impairment was calculated at the higher end of fair value less cost to sell or the value in use. It should be noted that future impairment assessments may result in the reversal of impairments recognised in this period,” the group said.
Chief executive Douglas Craigie Stevenson on Thursday acknowledged that the results, which had been delayed, had hurt the company's shareholders while he laid out a plan that looked at operational and network efficiencies.
“Cell C has taken active steps to reduce its focus on pure revenue and subscriber growth to focus on profitable, long-term growth in prepaid and contract segments,” he said.
“Our commitment is absolute. I am fully confident that the company is a good one. The question I cannot answer for now is where it stands as a percentage of contribution to Blue Label, but we are restructuring and recapitalising.”
Cell C’s revenue grew 1 percent to R15.4bn helped by a 6 percent growth in contract subscriptions, a 20 percent increase in broadband revenue and a wholesale revenue increase of 14 percent. Service revenue rose by 4 percent to R14.2bn.
In August rating agency S&P Global Ratings lowered the company's rating to default.
The rating agency's move came after Cell C failed to make about R194 million, as the company battled to improve its liquidity, debt profile and long-term competitiveness.