Israeli telco Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) yesterday expressed optimism about its financial state. Today, the company reported a tough quarter with a NIS 35 million loss, following a NIS 15 million loss in the preceding quarter and a NIS 35 million loss in the fourth quarter of 2018.
The Cellcom group's revenue totaled NIS 920 million in the second quarter, compared with NIS 928 million in the preceding quarter and NIS 927 million in the fourth quarter of last year. The group's second quarter cash flow was NIS 55 million, up from NIS 46 million in the preceding quarter, indicating a substantial slow-down in the group's investments.
Revenue in the mobile telephone sector grew from NIS 404 million in the first quarter to NIS 420 million in the second quarter, but this was less than the NIS 434 million in the second quarter of last year. Revenue in the landline sector totaled NIS 312 million in the second quarter, surprisingly NIS 4 million less than in the preceding quarter, but NIS 12 million more than in the second quarter of 2018. Cellcom reported that it gained 12,000 television subscribers in the quarter, giving it a total of 239,000 subscribers.
Cellcom CEO Nir Sztern said, "The second quarter financial report has several encouraging figures: revenue has been stable for several quarters in a row, EBITDA is higher than in the corresponding quarter last year, and free cash flow in the first half of 2019 was strong at NIS 101 million.
"At the same time, financing costs, which grew as a result of the high Consumer Price Index in the quarter, also weighed the company down in this quarter, resulting in a loss for the quarter."
"Cellcom's financial state is stable and sound," Sztern added. "Although the company's credit rating was downgraded to A, this is still a high rating. The company is generating positive cash flow and had a NIS 1.3 billion cash balance at the end of the quarter, very high liquidity, and access to the capital market and debt market in Israel."
Published by Globes, Israel business news - en.globes.co.il - on August 15, 2019
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