Telecommunications company Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) reported a decline in most of its financial measures for the third quarter in comparison with the third quarter of 2015, mainly because of the debt owed to it by Golan Telecom, which has not been paid.
The company's third quarter revenue totaled NIS 992 million ($264 million), 4% less than in the corresponding quarter of 2015. The decline is attributed to a 3.9% decline in revenue from services and a 3.7% decline in revenue from equipment sales.
Services revenue totaled NIS 758 million ($202 million) compared to NIS 789 million ($210 million) in the third quarter last year. Mobile services revenue totaled NIS 534 million, 6.6% less than in the corresponding quarter. Fixed-line services revenue rose 3.4% to NIS 276 million. Equipment sales totaled NIS 234 million, representing a 3.7% decline, as mentioned.
EBITDA totaled NIS 209 million ($55 million) in the third quarter of 2016, down 11.1% compared with NIS 235 million ($63 million) in the third quarter last year. EBITDA margin was 21.1%, down from 22.8%.
Cellcom posted a net profit of NIS 33 million ($9 million) in the third quarter of 2016, compared with NIS 40 million ($11 million) in the third quarter last year, a decrease of 17.5%. Free cash flow totaled NIS 81 million ($22 million) compared with NIS 127 million ($34 million) in the third quarter last year, a decrease of 36.2%
Cellcom reports a net additional 10,000 mobile subscribers in the third quarter of 2016, bringing its subscriber base to approximately 2.822 million at the end of September 2016.
Cellcom decided not to declare a dividend "in the light of the heavy competition and its continuing negative impact on the company's results, and with the aim of strengthening the company's balance sheet," the company said, adding that the board would review its decision in the coming quarters.
Cellcom CEO Nir Sztern said, "The third quarter was characterized by continued growth in the fixed-line segment in an environment of aggressive competition. The results of the quarter were affected, among others, by a decrease in revenues recognized in relation to national roaming services, due to Golan not paying the full agreed monthly consideration. Other than this adverse effect, the company's results in this quarter, both in the financial parameters and in the operational parameters, were good, similar to the previous quarter.
"The efforts invested in strengthening our position as a telecommunications group bear fruit afresh in each quarter. Cellcom tv is a success. Over 100 thousand customers chose quality and advanced TV, rich and diverse content, dozens of channels and all for the best price in Israel."
Published by Globes [online], Israel business news - www.globes-online.com - on November 14, 2016
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