Cell C remains upbeat, despite the news on Friday that ratings agency Standard & Poor’s has downgraded its credit rating for the second time this year.
Standard & Poor's lowered Cell C's long-term corporate credit rating from B to B- from B, giving the cellular network operator a negative outlook.
Earlier in the year, it had dropped the company from a B+ to a B, while Moody's also came in with a downgraded rating.
However, Cell C remains upbeat about its improving performance and prospects in spite of last week's bad rating.
CEO Jeffrey Hedberg says the view expressed by Standard & Poor’s about Cell C‘s ability to grow into its capital structure is unfortunate because the company continues to make significant progress.
“Year-on-year growth in EBITDA rose by 47% and for the quarter to end-September by 71%. We’ve seen strong growth during the first nine months of the year. This trend continues and we look forward to sharing our full results with the market in April 2008," he says.
“Naturally, rating agencies need to apply independent standards to their assessments. However, cash flow is strong and we have the continued commitment of our major shareholder. We therefore remain very confident in the future of Cell C and our ability to continue on an upward trajectory."
During the three months to 30 September 2007, Cell C connected 1,345-million prepaid subscribers – categorised as 48 000 post-paid, 36 000
ControlChat (84 000 combined) and 13 000 CSTs, bringing the total number of subscribers to 4,2-million.
Total revenue rose by 17% while EBITDA, excluding Virgin Mobile South Africa and gains from mobile number portability, increased by 71% over the third quarter of 2006.
The improvement in the company’s performance was underpinned by growth in the subscriber base and consequent increases in airtime sales, access and interconnect revenues, says Hedberg.
Zeona Motshabi, Cell C’s chief corporate officer, says the turnaround strategy implemented over the past year is paying off.
“We remain confident about developments in the regulatory environment which we believe are starting to level the playing field for a late entrant to the market such as ourselves.
“With market share, performance and the regulatory environment all improving, we are confident and positive about prospects in 2008,” Motshabi adds.