Telecommunications

R4.9 billion loss for South African company backing Cell C

Luke Fraser

 ·26 Aug 2026

Blu Label has recorded a loss of close to R5 billion following the listing of Cell C on the Johannesburg Stock Exchange (JSE) in 2025.

In its results for the year ended 31 May 2026, the group said its performance was characterised by disciplined execution in a challenging consumer environment and progress in simplifying its operations.

The group said that its core platforms were cash-generated, supported by disciplined cost management, improved liquidity and a sharper focus on earnings quality and returns on invested capital.

It said that the main milestone was the restructuring and subsequent listing of Cell C Holdings Limited.

The group said that the IPO de-risked its exposure, reduced complexity, and enhanced earnings visibility following an incredibly turbulent decade.

The group still holds a 49.53% stake in Cell C, which Blu Label noted gives it some strategic optionality.

The group said that IPO also introduces transparent market valuation, strengthened governance and independent access to capital.

However, the group admitted that its reported results for the year were severely affected by IFRS Accounting Standards arising from the restructuring transactions and the listing.

Blu Label stressed that these effects are non-operational and do not reflect the group’s underlying trading performance.

“These transactions, while strategically important, introduce a degree of accounting complexity that created volatility in the underlying performance of the group,” it said.

“Although the related accounting treatments are required under IFRS Accounting Standards, they are not indicative of Blu Label’s core operational trajectory or earnings capacity.”

Looking at the financials, the group’s revenue declined by 7% to R13 billion, while its EBITDA fell by 397% to a negative R4.8 billion.

The group recorded a net loss of R4.88 billion, which was a 297% decline from the R2.5 billion it recorded in profit in FY25.

The group’s headline earnings also fell by 82% from R4.1 billion in FY25, but remained positive at R756 million over the year.

Signs of life

The group also included normalised financial information that excluded the financial results of Cell C and Comm Equipment Company (CEC), which was also affected by the restructuring.

Other elements excluded from normalised earnings included all extraneous items arising from the restructuring transactions and the listing of Cell C, as well as losses on disposal and impairments.

With its normalised earnings, the group’s revenue rose 7% to R99.9 billion due to the inclusion of the gross amount generated on ‘PINless top-ups’, prepaid electricity, ticketing and universal vouchers.

Its normalised net profit after tax also stood at R677 million, while its headline and core headline earnings stood at R681 million.

The group still declared a final dividend of 10 cents per share, taking its total dividend for the year to 53.56 cents per share. The group has also announced a share repurchase programme.