Cellcom reports net profit increase in 2Q 2010

31 Aug 2010

Israeli mobile operator Cellcom has released its financial results for the three months ended 30 June 2010, posting a better-than-expected increase in quarterly net profit. For the three-month period Cellcom reported net profit of ILS326 million (USD84 million), up 17.7% year-on-year from the ILS277 million it posted in 2Q 2009, while revenues for the second fiscal quarter of 2010 stood at ILS1.49 billion, up from ILS1.42 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) meanwhile stood at ILS682 million in 2Q10, representing a 7.1% y-o-y increase. Wireless subscriber numbers at the end of June 2010 stood at 3.34 million, up from 3.29 million. Commenting on the results the company noted: ‘These positive results are a testament to our strategy of focusing on cellular communications while being committed to delivering quality customer service. Despite continued competition and many challenges in our industry, we have maintained our position as market leader. We will continue to work according to our strategy so that we can maximise our performance. So far, we have succeeded in generating growth and entering into areas, such as landline services to the business segment, which led to higher revenues and increased profitability.’

The release of the company’s results was delayed, with Cellcom citing the delay by the Israeli Ministry of Communications in releasing its final decision on the reduction in mobile termination rates (MTRs), with the mobile operator claiming that it prevented management from assessing the potential future material impact on the company’s business results. The MoC has said it plans to reduce MTRs from the current level of ILS0.25 per minute first to ILS0.10-ILS0.12 per minute at the beginning of 2011 and then to ILS0.05 per minute in 2012 or 2013.

Israel, Cellcom