Cellcom reports bigger net loss for FY 2019

24 Mar 2020

Israel’s Cellcom has published its financial results for the year ended 31 December 2019, revealing that net losses had widened against the previous twelve-month period, to ILS107 million (USD31 million) from ILS64 million. For the year under review Cellcom recorded a total turnover of ILS3.708 billion, broadly unchanged from ILS3.688 million in FY 2018, with a 4.4% increase in revenues from fixed line services – ILS1.529 billion up from ILS1.464 billion – failing to fully offset a 1.9% year-on-year drop in cellular revenues to ILS2.340 billion (FY18: ILS2.385 billion). Services revenues, meanwhile, totalled ILS2.776 billion, compared to ILS2.784 billion in 2018, with cellular service revenue dropping 2.9% to ILS1.679 billion and fixed line service revenues rising 3.5% to ILS1.258 billion. Full year operating income totalled ILS24 million, down significantly from ILS101 million in the previous fiscal year, though adjusted EBITDA increased by 36.8% y-o-y, to ILS940 million, mainly the result of a drop in rent expenses, which was partially offset by an expense for employee voluntary retirement plan in the fourth quarter of 2019.

In operational terms, Cellcom had a mobile subscriber base of 2.744 million as at 31 December 2019, down 3.8% from 2.851 million a year earlier, while monthly ARPU dropped to ILS50.7 in 2019, from ILS51.3 in 2018. In the fixed line sector, the telco reported a total of 278,000 ‘internet infrastructure’ subscribers at end-2019, up from 269,000 a year earlier, while pay-TV accesses numbered 258,000 (Dec-18: 219,000).

Commenting on the company’s performance, Cellcom’s chief financial officer Shlomi Fruhling said: ‘2019 was characterised by continued increased competition in the cellular segment, while we saw growth in the fixed line segment. During the year and thereafter, we made significant strategic moves such as completing the IBC acquisition and selling of the fibre-optic network in residential neighbourhoods, signing a Memorandum of Understanding to acquire Golan Telecom shares (in February 2020), ongoing execution of a comprehensive restructuring plan that included a voluntary 450-employee retirement agreement, a move for reducing vendor payments and raising equity of over ILS300 million which is intended to strengthen the Company’s financial stability.’

Israel, Cellcom