Partner 3Q net profit slumps 20.3% as expenses rise

10 Nov 2009

Israel’s second largest mobile operator by subscribers, Partner Communications, has posted a larger-than-expected drop in net profit for the three months ended 30 September 2009. The cellco revealed that net profit in its third fiscal quarter had fallen 20.3% year-on-year to ILS263 million (USD86.27 million), a drop that Partner attributed to increased expenses related to its ISP and fixed line initiatives. Partner’s revenues for the three-month period also fell, down to ILS1.57 billion from ILS1.63 billion a year earlier, representing a 3.3% y-o-y decline. Service revenues accounted for ILS1.39 billion of the total, but also decreased from ILS1.45 billion in 3Q 2008; the operator said that this drop was primarily a result of lower outgoing voice revenues due to increased competition in the sector, the reduction in the billing interval in 2009 as mandated by the Ministry of Communications, and the impact of lower roaming activity. Earnings before interest, tax, depreciation and amortisation (EBITDA) followed the similar downward trend of the operator’s other key financial indicators, falling 10.9% y-o-y to ILS570 million.

One area where growth was reported was in subscriber numbers, and at end-September 2009 broke the three million barrier, reporting a total customer base of 3.008 million, of which 1.199 million were 3G subscribers.

David Avner, Partner CEO, commenting on the results, said: ‘We continue to experience a challenging competitive and regulatory environment, which is pushing tariffs downwards and pressuring margins. In such challenging times, the company needs to adjust its cost structure. We have already started an efficiency programme that should bear fruits during 2010 with the key aim to improve our profitability levels.’

Israel, Partner Communications Company