South Africa’s third-largest mobile operator Cell C on Tuesday posted a profit for the first time of R540-million for the year ended December 31, a reverse on the loss of R5.6-billion recorded in the prior financial year.

The growth was attributed in bulk to foreign exchange-related gains stemming from the group’s recapitalisation plan, which has seen a portion of and will ultimately see all foreign debt eliminated, opening room for growth, CEO Jose Dos Santos commented during a presentation of the financial performance.

The recapitalisation plan, which is expected to reach completion at the end of May or early in June, will see Cell C’s debt reduce from R20-billion in mixed currencies to R6-billion in local debt.

This will also result in Blue Label holding a 45% stake in Cell C, Net 1 Applied Technologies holding 15% and Cell C executives 5%, while empowerment partner CellSAf will maintain its shareholding through 3C Communications.

Staff will also participate and the company’s historically disadvantaged individual ownership credentials will increase from 25% to 30%.

Meanwhile, Cell C’s earnings before interest, taxes, depreciation and amortisation (Ebitda) for the 2016 financial year increased by 59% year-on-year to R3.1-billion.

The Ebitda margin increased from 15% in 2015 to 21% in 2016, through a combination of increased revenue and cost management initiatives.

Revenue was up 11% to R14.6-billion and service revenue increased 8% to R11.8-billion for the 12 months to December.

Cell C’s subscriber base grew 20% year-on-year from 12.8-million in 2015 to 15.3-million in 2016, with data growth up 67% and data revenue having increased by 35%.

Data revenue now makes up 37% of service revenue, up from 30% a year ago.

Voice revenue declined 2% and wholesale revenue increased 147% to R370-million during the year under review.

“We are in a healthy space,” Dos Santos commented.

Cell C invested R3.37-billion in capital expenditure (capex) during 2016, taking total capex invested since 2013 to R11.6-billion.

The operator now has around 5 000 sites – 2 500 of which are long-term evolution (LTE) sites and more than 2 000 that are LTE-Advanced.