It marks an improvement on the first half of the year, when it turned in a R7.6-billion loss. Total revenue for the 12-month period was down by 8% to R13.8-billion (2019: R15.1-billion), with the largest part of the revenue contribution from its prepaid base at R6.2-billion (R6.9-billion). The company’s strategy of focusing on more profitable customers is bearing fruit as the average revenue per prepaid customer (Arpu) has increased by 28% on a year-on-year basis, despite a decline in its prepaid subscriber base by 15% to 9.2-million customers.
Earnings before interest and tax improved from a loss of R5.3-billion in the first six months of 2020 to a profit of R1.8-billion in the second half. A net profit of R2.1-billion was declared for the last six months of the annual period. However, because of an impairment and once-off expenses in the first half of the year the net loss before tax was R5.5-billion (2019: loss of R4.1-billion). Cell C’s gross margin declined by 7% and cost optimization resulted in overall direct expenses being 9% lower at R7-billion (2019: R7.7-billion). Cell C is now generating cash and the performance shows that the business is operationally stronger. The fit-for-purpose entity can effectively implement its business strategy and with a recapitalization will benefit from a revised capital structure with manageable debt to ensure long-term sustainability.