Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) reported its third quarter 2011 results today, which showed a 44% fall in profit, but a rise in revenue.
The cellular provider and Orange brand franchisee reported NIS 1.75 billion in revenue, up 6% from the corresponding quarter last year. Equipment revenue, mainly mobile phones, "saved" the company by rising 99% from the corresponding quarter to NIS 385 million. Service revenue fell 6% compared with the corresponding quarter to NIS 1.36 billion.
Partner's bottom line was also not encouraging: net profit fell 44% to NIS 172 million (NIS 1.1 per share). The company's EBITDA was NIS 529 million, down 17% from the corresponding quarter.
The average revenue per user (ARPU) fell 11% to NIS 111 from NIS 125 in the corresponding quarter.
Partner's results were below Psagot Investment House Ltd. and "Globes'" analysts' consensus of NIS 1.4 per share and revenue of NIS 1.8 billion.
With respect to revenue, if the NIS 301 million contribution from 012 Smile Telecom Ltd. is removed from the third quarter report, then revenue fell only 11% from the corresponding quarter.
With respect to service revenue, the fall mainly reflects the 77% drop in call interconnect fees, and the 94% drop in SMS fees, which came into effect on January 1, 2011. The rise in equipment revenue mainly reflects the average increase in revenue per mobile phone due to the higher prices of smartphones.
Partner's operating income was NIS 541 million for the third quarter, and the operating profit was NIS 314 million.
After the third quarter results were announced, Partner's board approved the distribution of dividends worth NIS 0.9 per share (NIS 140 million total worth).
Partner CEO Haim Romano said, "The financial results for the third quarter of 2011 reflect both the impact of the regulatory changes, as well as the increased competition in the cellular market. The challenging market conditions, the intensification in competition, and our commitment to the highest level of customer service in the telecommunications market, requires Partner to prepare and act accordingly, while maintaining the company's assets and enhancing operational processes."
Published by Globes [online], Israel business news - www.globes-online.com - on November 23, 2011
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