Cellcom reports revenue increase for 3Q20, but net loss widens

24 Nov 2020

Israel’s Cellcom has reported a 3% year-on-year increase in revenues for the third quarter of the year, but cited pointed to the coronavirus pandemic as continuing to ‘adversely affect [its results], as it reported a net loss for the period.

For the three months ended 30 September 2020 Cellcom generated a total turnover of ILS956 million (USD278 million), up from ILS928 million in the corresponding quarter of 2019. However, service revenues stood at ILS695 million Q3 2020, down from ILS709 million a year earlier, with service revenues in the mobile sector dropping by 5.7%, to ILS414 million; the operator attributed the decline in cellular revenue to a decrease in roaming services activities resulting from the COVID-19 pandemic, partially offset by revenues from Golan Telecom, which was consolidated as of September 2020. Service revenues in the fixed sector were up though, rising 5.1% on an annualised basis to ILS327 million, while equipment revenues saw a notable bump, climbing by 19% to ILS261 million.

In terms of other key financial metrics, Cellcom reported an adjusted EBITDA of ILS231 million for the quarter under review, representing a 14.8% decline against 3Q19, with cellular sector adjusted EBITDA falling by 38.4%, to ILS114 million, and fixed line adjusted EBITDA increasing to ILS117 million (3Q19: ILS86 million). Cellcom, meanwhile, reported a net loss of ILS37 million for 3Q20, compared to a loss of ILS2 million a year earlier.

With regards to operational indicators, Cellcom reported a sizeable hike in its mobile subscriber base, due to the consolidation of Golan Telecom, the acquisition of which it completed in August this year. As at 30 September 2020 Cellcom’s mobile subscriber base totalled 3.641 million, up from 2.767 million a year earlier, but it did not break out information about how many of those were signed up to it directly, and how many were Golan customers. In the fixed line sector, meanwhile, Cellcom reported a total of 289,000 ‘internet infrastructure field’ subscribers as of end-September 2020, up from 278,000 a year earlier, while pay-TV accesses reached 251,000 (Sep-19: 247,000).

Commenting on the company’s quarterly performance, Shai Amsalem, Cellcom’s CFO, said: ‘The results of the third quarter, reflect the continued impact of the coronavirus pandemic which caused a sharp decline in roaming revenues from our customers travelling abroad and tourists arriving in Israel.’

Israel, Cellcom, Golan Telecom