Partner posts higher net profit in 2Q14 on lower finance costs

14 Aug 2014

Amid continued intense competition in the Israeli mobile market, Partner Communications has reported a 4% year-on-year decline in turnover in the second quarter of 2014.

In the three-month period under review the operator generated a total turnover of ILS1.087 billion (USD316 million), down from ILS1.130 million in the corresponding quarter of 2013. Total service revenues in 2Q 2014 were ILS862 million, down by 9% against the same quarter a year earlier, with service revenues in the mobile sector falling by 8% to ILS667 million, a decline the company said was ‘mainly the result of the continued price erosion of post-paid and pre-paid cellular services due to the intense competition, partially offset by an increase in revenues from national roaming services’. In the fixed line sector, service revenues also fell, standing at ILS248 million in 2Q14, down from ILS277 million a year earlier, with this drop reflecting price erosion of local and international calls and internet services, as well as lower interconnect revenues after a reduction in the fixed line interconnect tariff in December 2013.

Adjusted EBITDA the second quarter of 2014 was ILS291 million, a 4% y-o-y increase from ILS280 million, while operating profit totalled ILS118 million, up 16% from ILS102 million over the same period. Net profit for the quarter under review was ILS46 million, more than double the ILS20 million reported a year earlier, with Partner saying the increase reflected both the increase in adjusted EBITDA and lower finance costs.

As at end-June 2014 Partner’s mobile subscriber base numbered 2.914 million, down marginally from the 2.921 million on its books a year earlier, of which the bulk – 2.14 million – were post-paid. Quarterly churn for cellular subscribers was 11.4% in 2Q 2014, compared with 9.4% a year earlier, while average revenue per user was ILS76 per month in the latest reporting period, down from ILS83 in 2Q13.

Haim Romano, Partner’s CEO, said of the operator’s quarterly performance: ‘The results of the second quarter of 2014 reflect the company’s strength and its ability to cope with the continued and intense competition in the telecom market. Adherence to the company’s strategy – which is based on creating a competitive advantage with an emphasis on technological innovation and quality of service – was reflected this quarter.’

Israel, Partner Communications Company