Cellcom’s net loss widens in 2Q20

17 Aug 2020

Israeli communications provider Cellcom recorded a total turnover of ILS855 million (USD247 million) in the second quarter of 2020, representing a 7.1% decline against the corresponding period of 2019. With the company reporting an almost 24% year-on-year drop in equipment revenue, to ILS172 million, service revenues were down 1.7% on an annualised basis at ILS683 million. Service revenues in the cellular sector totalled ILS385 million, down 8.3% y-o-y, which Cellcom attributed mainly to the decrease of its roaming services activities as a result of the COVID-19 pandemic. In the fixed line sector, service revenues were, however, up 8.7% y-o-y at ILS339 million, which the company said was due to increased turnover from internet and TV services.

Cellcom’s adjusted EBITDA for the second quarter of 2020 totalled ILS222 million, representing a 4.7% decline from 2Q19, while the company posted an operating loss of ILS22 million in 2Q20, compared to an operating profit of ILS6 million a year earlier. Cellcom also reported a net loss of ILS46 million for the quarter ended 30 June 2020, compared to a loss of ILS35 million in the corresponding period a year earlier.

At 30 June 2020 Cellcom’s wireless subscriber base stood at 2.734 million, down marginally from the 2.745 million it reported a year earlier, with monthly cellular ARPU falling to ILS46.9 in 2Q20, compared to ILS51.9 in 2Q19. Meanwhile, the company reported a total of 283,000 ‘internet infrastructure’ subscribers as of mid-2020, up from 278,000 a year earlier, with pay-TV accesses having increased to 245,000 by the end of the latest reporting period, from 239,000 at end-June 2019.

Areli Beker, Cellcom’s replacement CFO, commented: ‘The results of the second quarter were adversely affected by the [COVID-19] crisis which mainly caused a decrease in roaming service revenues from the company’s customers abroad and from tourists arriving in Israel. In addition, there was a decrease in revenues from end-user equipment as a result of the temporary closure of service centres and points of sale during the quarter. The company management has taken steps to reduce operating expenses during the closure period in order to mitigate the effect of the decrease in revenues. We expect that also the remaining quarters of this year will be adversely affected by [the pandemic].’

Israel, Cellcom