Cellcom reports net loss for Q2 2018 on increased expenses

17 Aug 2018

Israeli multi-service operator Cellcom recorded a net loss in the second quarter of 2018, citing ‘several specific events which burdened [its] expenses, primarily a retirement of approximately 200 employees’. In the three months to 30 June 2018 Cellcom generated a total turnover of ILS927 million (USD254 million), down from ILS962 million in the corresponding period a year earlier. Service revenues, meanwhile, totalled ILS694 million, down 5.1% year-on-year, with service revenues in the cellular segment falling by almost 10% to ILS434 million, which the company attributed to ‘the ongoing erosion in the prices of these services as a result of the competition in the cellular market’. Fixed service revenues were up, however, at ILS300 million (2Q17: ILS292 million), with an increase in turnover from internet and pay-TV services offsetting lower revenues from international calling services.

Cellcom reported an operating loss of ILS12 million for Q2 2018, compared to an operating income of ILS102 million in the year-ago period, with EBITDA slumping to ILS133 million, down almost 44% y-o-y, in part due to the expense of a new employee voluntary retirement plan in the amount of ILS26 million. Meanwhile, the company reported a net loss of ILS37 million for the period under review, down from a net income of ILS45 million in 2Q17.

In operational terms, at the end of June 2018 Cellcom had 2.809 million mobile subscribers on its books, a 1.1% increase against the 2.779 million it reported a year earlier. Churn was up, however, standing at 12.6%, compared to 10.8% in the corresponding period of 2017, while monthly ARPU dropped from ILS57.0 to ILS51.8. Internet infrastructure subscriber numbers saw a significant uptick, meanwhile, climbing to 248,000 at end-June 2018, from 189,000 a year earlier, with pay-TV accesses also up, reaching 195,000 (2Q17: 137,000).

Israel, Cellcom