Cellcom publishes second quarter financials

16 Aug 2019

Israel’s Cellcom has published its financial results for the three months ended 30 June 2019, reporting a minor drop in revenue and another net loss, again citing the impact of competition in the cellular market.

For the three-month period under review, Cellcom generated a total turnover of ILS920 million (USD258 million), down from ILS927 million in 2Q18, with service revenue broadly flat at ILS695 million (2Q18: ILS694 million), while equipment revenue dropped 3.4% year-on-year to ILS225 million. Cellular sector service revenue was down 3.2% on an annualised basis, at ILS420 million, with Cellcom saying the fall was mainly the result of ‘the ongoing erosion in the prices of these services as a result of the competition in the cellular market, which was partially offset by growth in revenues from the network sharing agreement’. By comparison, fixed line sector service revenue increased by 4% y-o-y, to ILS312 million, with an increase in turnover from internet and pay-TV services helping offset lower international calling service revenue.

Cellcom reported an adjusted EBITDA of ILS233 million for 2Q19, meanwhile, with this representing an increase of 66.4% against the corresponding period a year earlier, while the company saw a marginally narrower net loss for the period of ILS35 million, compared to a loss of ILS37 million in 2Q18.

In operational terms, at the end of June 2019 Cellcom’s mobile subscriber base totalled 2.745 million, down from 2.809 million a year earlier, though it noted the decline was in part attributable to its deletion of 153,000 subscribers from its total at the end of 1Q19, due to a change in its counting method. Cellular churn was reported at 11.3% for the second quarter of 2019 (2Q18: 12.6%), while monthly ARPU was almost unchanged at ILS51.9 (2Q18: ILS51.9). Meanwhile, Cellcom reported that it had 278,000 ‘internet infrastructure’ customers at mid-2019, up from 248,000 a year earlier, while the number of pay-TV accesses on its books rose from 195,000 to 239,000.

Commenting on the company’s performance, Cellcom CEO Nir Sztern said: ‘The financial report for the second quarter of 2019 reflects several encouraging results, including: stability of revenues during several consecutive quarters; increase in adjusted EBITDA compared to previous and corresponding quarters; strong free cash flow of ILS101 million for the first 6 months of 2019. Nonetheless, financing expenses weighed down on the company in this quarter too, which concluded in a loss. We believe that Cellcom’s strategy, alongside developing new and strong growth engines will assist the company’s financial situation.’

Israel, Cellcom