Partner’s second quarter profit slumps on lower revenues, EBITDA

13 Aug 2015

Israel’s Partner Communications, which offers its services under the Orange banner, has published its financial results for the quarter ended 30 June 2015, revealing an 80% slump in net profit against the corresponding period a year earlier. With the company citing intense competition in the country’s mobile market, turnover for the quarter under review totalled ILS1.044 billion (USD277 million), down by 4% against the ILS1.087 billion recorded in 2Q14, while service revenues amounted to ILS757 million, representing a 12% year-on-year decline. Notably, in the cellular sector revenues fell by 13% y-o-y to ILS581 million, with this decline said to be mainly the result of continued price erosion in both the pre- and post-paid sectors. More positively, Partner noted that such decline had been partially offset by an increase in revenues from wholesale services provided to other operators hosted on its network, and in particular as a result of the Rights of Use agreement entered into with HOT Mobile.

Adjusted EBITDA in the second quarter of 2015 was ILS236 million, 19% lower than in the same period a year earlier. Meanwhile adjusted EBITDA for the cellular sector totalled ILS160 million, compared to ILS211 million in 2Q14, with the lower figure reflecting the decrease in service revenues, partially offset by lower operating expenses and higher gross profit from equipment sales. Operating profit in the three month period was ILS67 million (2Q14: ILS118 million), with profit for the period coming in at just ILS9 million, significantly lower than the ILS46 million reported a year earlier.

In operational terms, at the end of June 2015 Partner had 2.75 million mobile subscribers on its books, of which the bulk – 2.11 million – were post-paid, having shed around 27,000 accesses in the preceding three months. Quarterly churn for cellular subscribers was 10.9%, down from 11.4% in 2Q14, with average revenue per user (ARPU) standing at ILS70 per month, down from ILS76.

Commenting on the quarterly performance, Partner’s chief executive Isaac Benbenisti said: ‘The second quarter results reflect the continued competition in the telecommunications market in Israel, alongside seasonality effects and the positive impact of the company’s continued focus on equipment sales. We continue our strategy of becoming a full-service telecommunications group offering quality service and sustaining our technological excellence.’

Israel, Partner Communications Company