4.5 Inventories

Inventories comprise prepaid airtime (including physical prepaid airtime), handsets and other related products.

Inventories are stated at the lower of cost (net of rebates and discounts) or estimated net realisable value. Cost comprises direct materials and, where applicable, overheads that have been incurred in bringing the inventories to their present location and condition, excluding borrowing costs. The cost of inventory is determined by means of the weighted average cost basis. Net realisable value is the estimate of the selling price in the ordinary course of business, less selling expenses. Provisions are made for obsolete, unusable and unsaleable inventory and for latent damage first revealed when inventory items are taken into use or offered for sale. Where unused PINs have been recycled and included in inventory for resale, the Group recognises the stock at no value.

Finished goods    
Prepaid airtime 2 279 104 1 004 417
Handsets 396 472 56 117
Other* 159 338 82 838
  2 834 914 1 143 372
* Other inventory mainly consists of accessories, starter packs, consumables and gym equipment.

Inventories with a cost of R15.4 billion (2022: R14.9 billion) were sold during the year and have been charged to profit or loss.

Included in the above balances are provisions for obsolete, unusable and unsalable inventory and for latent damage to the value of R0.3 million (2022: R1.3 million).

There is no unrealised profit included in Cell C prepaid airtime inventory at year-end due to Cell C only recognising revenue from the sale of prepaid airtime on utilisation by the customer.

Restricted inventory

Refer to note 2.1.1 for the details on restricted stock.