Cell C reports first ever annual profit

16 Apr 2008

South African mobile network operator Cell C has reported its results for the year ending 31 December 2007, which show the cellco has achieved an operating profit for the first time, of ZAR321 million (USD41 million). In the previous year the firm reported a loss of ZAR349 million. ‘With earnings before interest, tax, depreciation and amortisation (EBITDA) of over ZAR1 billion, which marks an increase of more that 230% in one year, I am pleased that the team’s efforts are being honoured by our customers,’ said CEO, Jeffrey Hedberg. ‘…We ended the year with a total active base of 4.8 million subscribers, an increase of 44% over the 3.3 million in the previous year.’ Cell C’s revenue of ZAR7.5 billion for the year to 31 December 2007 was up 17% year-on-year. However, CFO Fabrizio Mambrini warned that Cell C still has a way to go before it retains a net profit, refusing to say when it would finally cross that hurdle. The timing will depend on how much cash it spent expanding its network, he said, adding that over the next two years, CAPEX would reach ZAR2.4 billion, up from ZAR1.2 billion spent over the previous two years. Hedberg said 2007 was a ‘defining year’, one in which Cell C stopped trying to emulate its rivals MTN and Vodacom by being all things to everybody. Its new strategy is to create simple, affordable packages so that more consumers sign up and existing customers could afford to make more calls.

South Africa, Cell C