Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) has notified the Tel Aviv Stock Exchange that it expects to report a loss of NIS 42-46 million for the first quarter of this year. The company is the first Israeli telecommunications company to acknowledge the effect of the coronavirus pandemic on its results. It is due to release its first quarter financials on May 21. Cellcom also announced that it is raising NIS 200 million debt in Israel.
The loss is due to lower revenue on Cellcom's roaming services because of the Covid-19 pandemic, and also to a NIS 37 million loss "on paper" on the company's investment portfolio. The company says that since the end of the first quarter, the return on the portfolio has risen. These losses are partially offset by an approximately NIS 28 million reduced expense to Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) following the retrospect reduction of Bezeq's wholesale services tariffs.
As for the rest of the year, Cellcom's announcement states: "The Company expects its roaming services to continue to be materially adversely affected by the Corona virus pandemic throughout 2020 and its end-user equipment sales to continue to be materially adversely affected by the Corona virus pandemic during the second quarter of 2020 and thereafter in correlation to the Corona virus limitations applied, to the extent applied and affecting such sales."
Cellcom is preparing for a potential offering of additional debentures from its existing Series L Debentures of approximately NIS 200 million and additional Series 4 options to purchase ordinary shares of the company amounting to NIS 2 million. Standard & Poor's Maalot has reaffirmed a rating for the offering of n ilA with a negative outlook.
Published by Globes, Israel business news - en.globes.co.il - on May 6, 2020
© Copyright of Globes Publisher Itonut (1983) Ltd. 2020