Telecommunications company Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) saw its revenue rise in the third quarter, but operating profit declined, leading to a net loss. Quarterly revenue rose 3.1% in comparison with the third quarter of 2018 to NIS 938 million. Operating profit, on the other hand, fell 20% to NIS 32 million, and Cellcom posted a net loss of NIS 2 million, which compares with a net profit of NIS 1 million in the corresponding quarter of 2018. For the first nine months of 2019, Cellcom's loss totals NIS 53 million.
Implementation of the IFRS 16 accounting standard helped Cellcom present growth in EBITDA and cash flow from regular activity. EBITDA totaled NIS 271 million in the third quarter, up 42% in comparison with the corresponding quarter, with implementation of the standard contributing NIS 72 million to this item. Another contribution to EBITDA was NIS 8 million from the sale of Cellcom's fiber optic infrastructure to IBC. Cash flow from regular operations was NIS 273 million, NIS 71 million of which derived from implementation of the new standard. Cellcom reported, however, that the standard increased its net loss by NIS 1 million.
At the end of the third quarter, Cellcom had 2.76 million mobile subscribers, 2.1% fewer than at the end of the corresponding quarter. The churn rate in the quarter was 11.4%, higher than in the corresponding quarter. ARPU (average monthly revenue per user) grew from NIS 52.5 in the corresponding quarter to NIS 53.2 in the current quarter.
At the end of the third quarter, Cellcom had debt totaling NIS 3.5 billion. To deal with the debt, Cellcom plans to cut its annual expenses by NIS 150 million, to reduce investment, to raise capital by the end of the year, and other measures.
Published by Globes, Israel business news - en.globes.co.il - on November 27, 2019
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