South African mobile operator Cell C reported a 57.4% increase in full-year headline earnings as prepaid and wholesale revenue grew and a balance-sheet restructuring cut its debt. Headline earnings per share rose to R23.37 for the year ended May 31 from R14.85 a year earlier.
Group revenue increased 14% to R12.64 billion, while service revenue rose 6% to R11.64 billion. Prepaid revenue gained 9.7% as Cell C rebuilt its customer base, while wholesale service revenue increased 20% on growth in its mobile virtual network operator business. The company added about 1.3 million subscribers during the year, taking its customer base to 8.9 million, excluding MVNO users.
Reported earnings before interest, tax, depreciation and amortisation rose 162% to R5.5 billion. Much of that increase came from one-off gains related to restructuring before Cell C's stock-market listing. Excluding those items, adjusted EBITDA increased 16.9% to R2.4 billion.
The restructuring also reduced Cell C's debt burden. Net debt fell 64% to R2.02 billion from R5.69 billion a year earlier, while the ratio of net debt to EBITDA improved to 1.56 times from 4.29 times. The changes give the company more room to invest while reducing the amount of cash needed to service debt.
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Cell C expects adjusted EBITDA of about R3 billion in fiscal 2027, compared with a restated R2.7 billion for 2026. The forecast includes a full-year contribution from Comm Equipment Company following its integration. Chief Executive Officer Jorge Mendes said the company has rebuilt its customer base, improved network performance and expanded its position in South Africa's wholesale mobile market.
Key Takeaways
Cell C's results show why the balance-sheet restructuring matters as much as the 57.4% rise in headline earnings. The company has spent years carrying debt while competing against larger South African operators with more customers and network infrastructure. Cutting net debt from R5.69 billion to R2.02 billion changes that position because less leverage reduces financial pressure and gives management more room to focus on operations.
The underlying numbers also show that the improvement is not only an accounting effect. Adjusted EBITDA, which removes the one-off restructuring gains that lifted reported EBITDA to R5.5 billion, still increased 16.9% to R2.4 billion. Prepaid revenue grew 9.7%, the subscriber base added 1.3 million users and wholesale revenue rose 20%. Wholesale is important because Cell C can generate revenue by providing services to MVNOs without having to match the infrastructure spending of larger rivals.
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The 2027 forecast will now test whether that model can deliver growth after the restructuring benefits fade. Adjusted EBITDA of R3 billion would represent another increase from the restated 2026 base of R2.7 billion. For investors, the question is whether Cell C can keep adding customers and wholesale volumes while maintaining its lower debt level.
