Mobile operator Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) reported higher profit on lower revenue in its financial results for the second quarter of 2014.
Revenue for the second quarter of 2014 totaled NIS 1.158 billion ($337 million) down 6.3% from NIS 1.236 billion ($359.5 million) in the corresponding quarter of 2013. However, net profit for the second quarter of 2014 totaled NIS 79 million ($23 million) (NIS 0.79 or $0.23 per share) up 18% from NIS 67 million ($19.5 million) in the corresponding quarter of 2013. The company will not pay a dividend.
Cellcom CEO Nir Sztern, said, "This quarter was characterized by focusing on increasing equipment sales, including tablets, and the company presents a 15.8% increase in equipment revenues compared with the previous quarter."
He added, "As compared with the second quarter of last year, the company continues to present an improvement in net income and in profitability as a percent of revenues resulting from a successful implementation of its strategy to strengthen its position as a communications group while focusing on efficiency measures."
"Sztern continued, "As part of the efficiency measures this quarter, we launched, together with the employees representing labor union, a voluntary retirement plan for employees, in which approximately 380 employees have retired. The Group recorded a one-time expense in the amount of NIS 39 million for the cost of this plan. The savings in payroll expenses will be seen as early as the third quarter this year."
On 4G he said, "We are very pleased with the launch of the 4G network. Our LTE network is already operating in wide areas with hundreds of operational sites as part of the current operation approval provided by the Ministry of Communications and allows our customers a taste of the next generation surfing experience. Additionally, we continue with a fast deployment of our 4.5G network supporting LTE Advanced technology, which will provide Cellcom Israel's customers internet surfing with a very high speed, subject to receiving additional frequencies and regulatory approvals."
Along with the current operations, we are in the middle of extensive preparations towards the launch of television services over the internet, an alternative for the traditional television services through cable or satellite. The company has entered agreements for the procurement of equipment, content and ancillary services and is making preparations in the areas of customer service, sales and operating towards this launch."
Published by Globes [online], Israel business news - www.globes-online.com - on August 11, 2014
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