Cell C CEO Jorge Mendes. (Photograph by Nicola Mawson)
Cell C’s maiden interim results for the period to end-November saw it deliver on its pre-listing statement, leading to a share price lift.
“Delivering our first interim results as a listed company is an important milestone for Cell C. Our focus has been on executing with discipline, strengthening the fundamentals of the business and restoring financial stability,” says Cell C CEO Jorge Mendes.
“These results reflect an intentional and sustainable strategy, positioning Cell C to deliver long-term value for shareholders, customers and partners.”
Peter Takaendesa, chief investment officer at Mergence Investment Managers, points out that while Mendes has communicated a clear strategy and has great industry operational experience, Cell C has one core business, which makes it more vulnerable to external factors than its larger competitors with diversified revenue streams.
Cell C reported headline earnings per share – a key measure of profitability – of 20 584c a share off the back of data being “the primary growth driver”.
Earnings per share, which does not strip out once-off or unusual items, came in at 20 652c a share off revenue of R5.68 billion, which it attributed to improved prepaid trends and continued strength in its wholesale unit.
Normalised earnings before interest, tax, depreciation and amortisation amounted to R917 million, representing a 16.1% margin, which it says reflects improving operational momentum and the benefits of a materially strengthened balance sheet.
This figure strips out one-off items, which came in at R3.3 billion, as the company works off the effects of being restructured just before being spun out of Blu Label Unlimited.
Financial and operational highlights in Cell C’s maiden interim results.
Given that Cell C is releasing its first set of results, the only comparable figures are those contained in its pro forma statement released ahead of its 27 November 2025 debut on the JSE, showing R3.5 billion in net profit from R13.7 billion in revenue – which was the first time it had been profitable in its existence.
Cell C, with 13.73 million subscribers overall, runs on what it calls a “capex-light” model, enabling it to roam on Vodacom and MTN networks, and rather invest in customer-facing offerings such as physical outlets. Vodacom and MTN spend billions each year on network infrastructure, such as 4G and 5G site deployments and upgrades.
As of an hour after the release of the results, the company’s share price had gained 0.17% to R30, an indication that shareholders were pleased with the numbers, which came in more or less as expected in its disclosed pre-listing figures.
Cell C shares are down almost 4% since it listed on 27 November last year.
Takaendesa notes that Cell C shares have done well for those who bought them at the listing price of R26.50 late November 2025, but those who bought a few days post the initial public offering have seen the stock significantly underperform compared to all other listed telcos.
Its share price has declined just shy of 4% since listing on the JSE.
“While the market remains highly-competitive, we are encouraged by the improved momentum across our core operations, particularly in prepaid and wholesale, alongside the considerable progress made in strengthening our balance sheet,” comments Mendes.
The virtual mobile network operator’s strategy, beyond being capex-light, includes leveraging network roaming agreements for wider coverage, expanding business-to-business and internet of things services, and focusing on the postpaid segment.
Takaendesa says: “Cell C’s interim results are in line with expectations of a tougher operating environment in the South African telecoms sector, particularly in the prepaid segment.”
Cell C, which turns 25 this year, says in a statement that prepaid net revenue increased 1.6% year-on-year, driven by the unwinding of historically elevated airtime discounts and a recovery in subscriber volumes.
Prepaid subscribers increased by just over one million during the period, positioning the business for an acceleration in revenue growth in the second half of the financial year, it says.
In its wholesale segment, it aims to capture high-value digital consumers through FNB and Capitec as a white label company through more agile, service-led offerings. In the half-year, wholesale continued to be a key growth engine for the group, with revenue increasing 22.5% year-on-year to R840 million.
For the second half of the financial year, Cell C expects prepaid revenues to accelerate, supported by strengthened network perceptions and value-led propositions. Postpaid revenues are expected to continue improving, it notes.
Mike Gresty, fund manager at Anchor Capital, says: “I think a lot of focus will be on anything management says about post-first half momentum. The comments on outlook appear confident and on track, I would say.”
“I can say it’s early days… We listed on the 27th [of November]; the half is four days after that,” says Mendes.
“We are in a healthy position when you look at our subscriber numbers and the momentum, the quality of our brand, the financial position. So, I’m really excited about the future. We have highlighted already that the second half cyclically looks better.”
