While the results included many positives, including a return to profit and subscriber growth, Cell C\u2019s current liabilities also exceeded its current assets by a substantial margin.<\/p>\n\n\n\n
Cell C\u2019s balance sheet showed that its current assets were nearly R3.22 billion, while current liabilities stood at over R5.55 billion, yielding a difference of R2.34 billion.<\/p>\n\n\n\n
Although this is a substantial improvement from last year\u2019s R8.05 billion excess of current liabilities over current assets, Cell C\u2019s current ratio is still 0.579:1 \u2014 much worse than its sector peers.<\/p>\n\n\n\n
A comparison of Vodacom, MTN, and Telkom\u2019s latest interim financial reports shows that their current ratios are close to 1.<\/p>\n\n\n\n
The current ratio, also called the working capital ratio, is a standard liquidity metric used to assess a company’s ability to pay its short-term obligations.<\/p>\n\n\n\n
If a company has a very high current ratio relative to its peer group, it suggests that management may not be using its assets efficiently.<\/p>\n\n\n\n
However, a current ratio below the industry average may indicate a higher risk of financial distress or default for the company. This is Cell C\u2019s situation.<\/p>\n\n\n\n
Cell C said it encountered liquidity constraints during the six-month period from 1 June to 30 November 2025, due to various factors.<\/p>\n\n\n\n
It highlighted the seasonal nature of working capital requirements and elevated cash outflows related to its technological modernisation drive, capacity rebasing, and capex investment payments as the primary drivers.<\/p>\n\n\n\n
\u201cIn response, management has prepared detailed cash flow forecasts extending at least twelve months beyond the approval date of these financial statements,\u201d it stated.<\/p>\n\n\n\n
\u201cThese incorporate rigorous downside scenario analyses that consider key variables such as revenue trends, customer churn, device financing recoveries, and the availability of funding.\u201d<\/p>\n\n\n\n
These forecasts include a range of in-progress mitigation strategies, including cost optimisation, the deferral of selected non-essential capital projects, and better utilisation of Cell C\u2019s debt facilities.<\/p>\n\n\n\n
\u201cBased on the outcomes of these assessments and the mitigatory actions undertaken, the directors are satisfied that Cell C will maintain adequate liquidity to meet its obligations for the foreseeable future,\u201d it said.<\/p>\n\n\n\n
\u201cAccordingly, the directors have not identified any material uncertainties that may cast significant doubt on the group\u2019s ability to continue as a going concern.\u201d<\/p>\n\n\n\n Cell C explained that its current assets comprise R1.7 billion in trade and other receivables, which is largely network operator costs and the net receivables from its postpaid book.<\/p>\n\n\n\n \u201cThe average net receivable days are roughly 10 due to the upfront nature of Cell C debtors\u2019 book,\u201d it stated.<\/p>\n\n\n\n Meanwhile, under its current liabilities, trade and other payables of R4.2 billion break down roughly as follows:<\/p>\n\n\n\n \u201cThe average creditors days are 75 days, and the core creditor terms remain 60 days,\u201d Cell C stated.<\/p>\n\n\n\n \u201cAlthough for the half year liquidity remained constrained, we continued to meet our obligations. The African Bank facility has reduced to R1.4 billion from R1.9 billion.\u201d<\/p>\n\n\n\n Asked for comment on its negative working capital position, Cell C said that focusing solely on its balance sheet was a mistake given the unique structure of these results.<\/p>\n\n\n\n \u201cThe income statement reflects Cell C on a standalone basis, while the balance sheet reflects the newly combined business. This creates an inherent mismatch in the interim period,\u201d it said.<\/p>\n\n\n\n \u201cFor a more representative view of operating performance, one can look at the adjusted EBITDA of R917 million for Cell C and add the CEC EBITDA contribution. This results in R1.444 million for the six months.\u201d<\/p>\n\n\n\n When annualised, EBITDA would be approximately R2.888 million. Using this annualised figure against net debt of R2.390 million results in a net debt to EBITDA ratio of 0.83.<\/p>\n\n\n\n \u201dWe believe this is a more meaningful indicator of the business\u2019s financial position,\u201d said Cell C.<\/p>\n\n\n\n \u201dCell C\u2019s reported net debt to EBITDA ratio reflects the specific dynamics of this reporting period, which includes once\u2011off gains.\u201d<\/p>\n\n\n\n As it moves toward its full\u2011year results, Cell C said investors will be able to rely on a 12\u2011month historical rolling EBITDA, which will provide a clearer and more comparable view of underlying performance.<\/p>\n\n\n\n Mendes said that these interim results marked a turning point for Cell C. \u201cThe structural actions we have taken are beginning to translate into operational momentum and a stronger financial foundation.\u201d<\/p>\n\n\n\n Cell C reported a return to profit, reversing its R149.2 million loss from the previous period to a R3.36 billion profit.<\/p>\n\n\n\n This was despite a 5.2% year-on-year decline in topline revenue from R5.68 billion to R5.99 billion.<\/p>\n\n\n\n Revenue in the prepaid segment grew 1.6% year-on-year, from R2.69 billion to R2.74 billion, while postpaid revenue increased by 2.3% year-on-year, from R1.14 billion to R1.16 billion.<\/p>\n\n\n\n Cell C\u2019s average revenue per user (ARPU) also increased in its postpaid segment. ARPU increased by 4.4% year-on-year from R220 to R230.<\/p>\n\n\n\n However, the same can\u2019t be said for its prepaid segment. ARPU in this segment declined by 8.4% year-on-year, from R78 to R71, which Cell C attributed to an effective 14% reduction in data tariffs.<\/p>\n\n\n\n The prepaid segment saw significant year-on-year subscriber growth, with Cell C\u2019s prepaid customers increasing from just under 6.92 million in the first half of 2025 to 7.83 million in the first half of 2026.<\/p>\n\n\n\n Meanwhile, Cell C\u2019s postpaid subscriber base declined year-on-year, from 847,900 in the first half of 2025 to 784,600 in the first half of 2026, representing a 7.5% reduction.<\/p>\n\n\n\n \u201cWhile the postpaid subscriber base declined by approximately 13,750 subscribers in the six-month period, this was largely impacted by the clean-up of the user base,\u201d it said.<\/p>\n\n\n\n Cell C explained that this included migrating roughly 40,000 subscribers from postpaid to prepaid over the six-month period.<\/p>\n","protected":false},"excerpt":{"rendered":" Cell C’s current liabilities far exceed its current assets, suggesting the company remains in some financial distress and has negative working capital.<\/p>\n","protected":false},"author":15,"featured_media":555696,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[80335],"tags":[355,58256],"class_list":["post-629231","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-cell-c","tag-jorge-mendes"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/629231"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=629231"}],"version-history":[{"count":3,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/629231\/revisions"}],"predecessor-version":[{"id":629492,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/629231\/revisions\/629492"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/555696"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=629231"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=629231"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=629231"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Listed network operator<\/th> Current Assets<\/th> Current Liabilities<\/th> Current Ratio<\/th><\/tr><\/thead> Cell C<\/td> R3.22 billion<\/td> R5.55 billion<\/td> 0.579:1<\/td><\/tr> MTN<\/td> R156.9 billion<\/td> R168.6 billion<\/td> 0.931:1<\/td><\/tr> Vodacom<\/td> R79.1 billion<\/td> R72.6 billion<\/td> 1.089:1<\/td><\/tr> Telkom<\/td> R17.6 billion<\/td> R15.8 billion<\/td> 1.117:1<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n Cell C meets obligations despite constrained liquidity<\/h2>\n\n\n\n
\n
Turning point for Cell C \u2014 CEO<\/h2>\n\n\n\n
![\"\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2025\/05\/Jorge-Mendes-Cell-C-business-update.jpg\")