Cellcom reveals annual declines in revenues, net profit

16 Mar 2016

In the year ended 31 December 2015 Israel’s Cellcom generated a total turnover of ILS4.180 billion (USD1.071 billion), a figure representing a year-on-year decline of 8.5%, while service revenues fell by 12.1% against FY 2014 to ILS3.132 billion. With regards to the drop in service revenues, Cellcom attributed the decline in part to lower cellular service turnover, which it said was the result of ‘the ongoing price erosion of these services and a decrease in subscriber base, resulting from the intensified competition in the cellular market’. In addition, Cellcom noted that it had recorded lower turnover from both internet and international calling services due to increased competition. Meanwhile, the contribution of the company’s fixed line unit, Netvision, to service revenues (excluding intra-company turnover) was ILS691 million in 2015, down from ILS781 million a year earlier.

EBITDA in 2015 slumped by 32.0% y-o-y to ILS872 million from ILS1.282 billion twelve months previously, with Cellcom noting that EBITDA in the fiscal year under review excluded a one-time expense of approximately ILS30 million, which resulted from entering a collective employment agreement and an expense regarding an employee voluntary retirement plan in the amount of approximately ILS25 million. As a percent of revenues, EBITDA in 2015 totaled 20.9%, down from 28.0% in 2014. Net Income in 2015 meanwhile tumbled by 72.6% to ILS97 million.

In operational terms, at the end of 2015 Cellcom’s mobile subscriber base totalled 2.835 million, down by around 132,000 over the twelve-month period, though notably the company did actually record an increase of 3,000 subscribers in the final quarter of the year. According to Cellcom, the cellular Churn Rate for 2015 stood at 42.0%, down from 44.0% a year earlier, while monthly average revenue per user (ARPU) in FY15 was ILS65, compared to ILS72.1 in 2014.

Israel, Cellcom, NetVision