Partner Communications returns to profit in 2016

31 Mar 2017

Israel-based Partner Communications has reported a 14% year-on-year decline in revenue for the twelve months ended 31 December 2016, with consolidated turnover falling to ILS3.544 billion (USD922 million). Annual service revenues, meanwhile, were down by 8% against the previous fiscal year, at ILS2.752 billion, and with cellular service revenues falling 9% to ILS2.099 billion, Partner attributed the decline to ‘continued fierce competition’ in the wireless sector. Service revenues from the company’s fixed line segment were also lower in 2016, falling to ILS866 million from ILS906 million, mainly due to reduced revenues from international calls (including in the market for wholesale international traffic).

Partner’s total operating expenses in the year under review totalled ILS2.324 billion, 6% lower y-o-y, in part reflecting reduced expenses related to the company’s cellular network following the implementation of the cost-sharing mechanism under a network sharing agreement with rival HOT Mobile. Also of note, Partner said it had seen a reduction in payroll and related expenses, having reduced the size of its workforce by around 14% on an average basis over the year. FY 2016 operating profit stood at ILS193 million, up 80% y-o-y, while adjusted EBITDA was ILS834 million, compared to ILS876 million in FY 2015. As a percentage of total revenues, adjusted EBITDA in 2016 was 24%, against 21% the previous year. Having recorded a net loss of ILS40 million in 2015, Partner returned to profit in its latest financial year, reporting a net income of ILS52 million.

In terms of operational indicators, at the end of 2016 Partner had 2.686 million mobile subscribers on its books, down from 2.718 million a year earlier. Monthly blended ARPU was also lower, standing at ILS65 per month in 2016 and ILS62 in the last quarter of that year, compared to ILS69 and ILS67 in FY 2015 and 4Q15, respectively. Churn, however, was improved, with annual cellular churn at 40% in the twelve months under review, down from 46% in 2015, while the churn rate was 9.4% in the last quarter of 2016, against 11.1% in the corresponding period a year earlier.

Israel, Partner Communications Company