Blue Label Writes Back R1.6bn as Cell C Returns to Profitability
That impairment had partially been written back in 2022 (R962.5 million), but this year’s full reversal effectively restores the investment on Blue Label’s books.
Blue Label Telecoms has taken a decisive step in reshaping its long-standing relationship with Cell C , reporting that the mobile operator has transformed from a persistent drag on its results into a major contributor to earnings. For the year ended 31 May 2025, Blue Label booked R1.51 billion in profits from Cell C, marking a sharp reversal after recognising R1.61 billion in accumulated net losses from the operator over the past five years.
A key driver of the turnaround was the recognition of a portion of Cell C’s deferred tax asset, alongside a stronger equity valuation that allowed Blue Label to fully reverse a R1.56 billion impairment recorded against its investment in the operator back in 2019. That impairment had partially been written back in 2022 (R962.5 million), but this year’s full reversal effectively restores the investment on Blue Label’s books.
The impact on Blue Label’s overall performance was profound. Headline earnings soared more than sixfold to R4.1 billion, while core headline earnings — excluding the once-off Cell C-related adjustments — surged 258% to R2.43 billion. Earnings per share rose to 276.52 cents, compared with just 72.49 cents a year earlier, while core headline EPS climbed from 76.08 cents to 270.95 cents, underscoring a strong underlying performance. Net profit after tax jumped nearly fourfold to R2.5 billion.
At a group level, Blue Label’s revenue came in at R14.1 billion, or R96 billion when including gross revenue from “PINless top-ups”, prepaid electricity, ticketing, and universal vouchers — a 7% year-on-year increase. Gross profit expanded modestly by 2% to R3.38 billion, with margins improving from 22.57% to 24.02%, supported by growth in high-margin services. EBITDA climbed 31% to R1.60 billion.
The results mark the first time in years that Blue Label has fully recognised all historical losses tied to Cell C, drawing a line under a turbulent chapter that saw repeated impairments and restructuring. With Cell C’s financial recovery now taking shape, speculation has intensified about a potential public listing of the operator as early as 2026, a move that could unlock further value for Blue Label and its shareholders.
The reversal of impairments, combined with Cell C’s return to profitability, has buoyed investor sentiment and lifted Blue Label’s share price significantly in 2025. The group, long criticised for its exposure to Cell C’s troubles, now appears to be reaping the benefits of sticking with the turnaround strategy.
