Cell C shareholder, JSE-listed Net1, has announced it’s delaying the publication of its results as it awaits “clarifications” on the transactions at the troubled mobile operator.
The move comes after Blue Label Telecoms, which holds a 45% stake in Cell C, last month pushed back its results for the same reason.
Announcing its preliminary financial and operating highlights for the fourth quarter of 2019 this afternoon, Net1 said it is rescheduling the release of its audited results in order to “allow more time for clarification on various developments in respect of the proposed transactions at Cell C, as this information is expected to significantly impact the carrying value of its Cell C investment as of 30 June 2019”.
The company will now release fourth quarter and year-end 2019 results after the market close on 26 September, the same day Blue Label is expected to put out its results.
In August 2017, Blue Label completed Cell C's recapitalisation through a R5.5 billion investment, as well as a further subscription of shares from Net1 UEPS Technologies for R2 billion.
Blue Label holds a 45% stake in Cell C, Net1 owns 15%, and 10% is held on behalf of Cell C management and staff. 3C Telecommunications' shareholding is 30%.
Cell C has been under pressure for some time, facing myriad problems, including job stoppages, declining revenue and debt management challenges.
In February, Blue Label announced Cell C’s unaudited results for the year ended 31 December 2018, reflecting a R638 million loss.
Net1’s consolidated revenue is expected to be approximately $70 million, the company says. In Q3 2019, the company reported revenue of $87 million, which included an $18 million contribution from prepaid airtime service provider DNI.
The company expects an adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) loss for Q4 2019, though it expects the loss to be lower than was guided on the Q3 2019 earnings call, says Net1.
It adds that South African operations are expected to achieve EBITDA breakeven in the month of July 2019.
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