Cell C says that different reporting standards explain the R10 billion difference in the assets on its balance sheet between its financial statements and those of Blue Label Telecoms.<\/p>\n\n\n\n
Cell C\u2019s unaudited financial results for the 12 months ended 31 May 2025 showed that its assets increased by 22% to R5.072 billion.<\/p>\n\n\n\n
This was partly because the company recognised deferred tax assets in the current year as it returned to profitability.<\/p>\n\n\n\n
Total liabilities increased by 8% to R13.379 billion. It said the reduction in the trade and other payables was offset by the increase in non-current shareholder debt.<\/p>\n\n\n\n
Cell C explained that related party debt transactions account for approximately 60% of the total liabilities.<\/p>\n\n\n\n
Blue Label Telecoms (now known as Blu Label Unlimited) also reported on Cell C\u2019s balance sheet, which looked completely different from the mobile operator\u2019s.<\/p>\n\n\n\n
According to Blue Label, Cell C had R15.020 billion in assets and R16.065 billion in liabilities, a huge difference from what Cell C reported.<\/p>\n\n\n\n
This means Cell C showed negative equity of R8.305 billion, while Blue Label showed negative equity of R1.044 billion.<\/p>\n\n\n\n
This R7.261 billion difference is significant as it shows the market how difficult it would be for Cell C to reverse its technically insolvent status.<\/p>\n\n\n\n
Since 2019, the Cell C total liabilities reported by Blue Label have consistently been higher than those reported by the mobile operator by at least R1.5 billion.<\/p>\n\n\n\n
In the 2024 financial year, the difference between these two figures was R2.8 billion, and in the 2025 financial year, it was R2.7 billion.<\/p>\n\n\n\n
The table below shows the difference between Cell C and Blue Label Telecoms\u2019 financial reporting for the 2025 financial year.<\/p>\n\n\n\n Cell C explained that the variance in its reporting and that of Blue Label primarily arises from IFRS 3 (business combinations) purchase price allocation (PPA).<\/p>\n\n\n\n These were independently valued at the time when Blue Label Telecoms acquired its initial 45% stake in Cell C in 2017.<\/p>\n\n\n\n The PPA recognised intangible assets, principally spectrum and brand, of R9.946 billion and related deferred tax liabilities of R2.68 billion on Blue Label\u2019s books.<\/p>\n\n\n\n These adjustments reflect the fair value accounting treatment required under International Financial Reporting Standards (IFRS) for business combinations.<\/p>\n\n\n\n These fair value adjustments appear in Blue Label\u2019s consolidated view as required for IFRS but not in Cell C\u2019s standalone legal entity financials.<\/p>\n\n\n\n Cell C added that any valuation assumptions underpinning the fair value allocation were determined by Blue Label and its independent valuation processes.<\/p>\n\n\n\nMeasure<\/strong><\/td> Cell C\u2019s financial report<\/strong><\/td> Blue Label\u2019s financial report<\/strong><\/td> Difference<\/strong><\/td><\/tr> Total Assets<\/td> R5.074 billion<\/td> R15.020 billion<\/td> R9.946 billion<\/mark><\/strong><\/td><\/tr> Total Liabilities<\/td> R13.379 billion<\/td> R16.065 billion<\/td> R2.686 billion<\/mark><\/strong><\/td><\/tr> Equity<\/td> -R8.305 billion<\/td> -R1.044 billion<\/td> R7.261 billion<\/mark><\/strong><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n Cell C explains the difference<\/h2>\n\n\n\n