Israeli telecommunications carrier Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) posted a net profit of NIS 51 million ($14 million) for the first quarter of 2017, which compares with a loss of NIS 7 million in the previous quarter, and a profit of NIS 14 million in the first quarter of 2016. Total revenue in the first quarter of 2017 was NIS 803 million ($221 million), representing a decline of 18% from NIS 977 million in the first quarter of 2016.
Partner's share price is currently up 4.59% on the Tel Aviv Stock exchange.
The company cut its operating expenses by 19% to NIS 496 million ($137 million) in the first quarter of 2017 in comparison with expenses of NIS 612 million in the first quarter of 2016. Partner said that the decrease mainly reflected a decline in expenses related to the cellular network following the implementation of the Network Sharing Agreement with HOT Mobile, a decrease in rebranding related expenses, as well as decreases in other expenses reflecting the impact of various efficiency measures undertaken.
Service revenue fell 10% to NIS 640 million ($176 million) in the first quarter of 2017 from NIS 710 million in the corresponding quarter of 2016.
Adjusted EBITDA in the first quarter of 2017 totaled NIS 233 million ($64 million), representing an increase of 5% from NIS 222 million in the corresponding quarter. As a percentage of total revenue, adjusted EBITDA was 29%, compared with 23% in the corresponding quarter.
At the end of the first quarter of 2017, the company's cellular subscriber base (including mobile data and 012 Mobile subscribers) was approximately 2.66 million, comprising approximately 2.26 million Post-Paid subscribers or 85% of the base, and approximately 399 thousand Pre-Paid subscribers, or 15% of the subscriber base.
During the first quarter of 2017, the cellular subscriber base declined by approximately 28 thousand subscribers. The Post-Paid subscriber base increased by approximately 18 thousand subscribers, while the Pre-Paid subscriber base declined by approximately 46 thousand subscribers. Total cellular market share (based on the number of subscribers) at the end of the first quarter of 2017 was estimated to be approximately 26%, unchanged from the first quarter of 2016.
The monthly Average Revenue per User (ARPU) for cellular subscribers in the first quarter of 2017 was NIS 61 ($17), representing a decrease of 9% from NIS 67 in the corresponding quarter. Partner said that the decrease mainly reflected "the decrease in revenue as a result of termination of the Right of Use Agreement with HOT Mobile from the second quarter of 2016, as well as the continued price erosion in key cellular services due to the persistent competition in the cellular market."
Cash generated from operations increased by 20% to NIS 194 million ($53 million) in the first quarter of 2017 from NIS 162 million in the corresponding quarter.
Partner announced that it had entered into a long term agreement with R.G.E. Group Ltd. for broadcasting rights of a broad variety of content for which RGE holds exclusive broadcasting privileges. The agreement is for a period of five years.
Partner CEO Isaac Benbenisti said, "We began 2017 under continued momentum, with the significant measures we took over the last few quarters to streamline and improve processes, and unify the company's operations, beginning to bear fruit.
"In the cellular segment, we are continuing to expand our Post-Paid subscriber base. This rising trend in Post-Paid subscribers, that has continued for seven consecutive quarters, results from the continued development of a quality service force while enhancing the platforms available to our subscribers in the service centers throughout the country. We continue to invest in our cellular network, as well as develop capabilities available only on Partner's network, in order to maintain our leading edge network. In the first quarter we began the deployment of the 4.5G network (LTE-Advanced) and expanded the Wi-Fi Calling technology that enables cellular calls over a wireless internet network so that today the majority of our customers can use this unique feature of Partner's network. We also launched the "IoT Pro" network, the first "Internet of Things" (IoT) network in Israel that can recognize IoT devices and manage them in a unique and efficient manner.
"In the fixed-line segment, in the first quarter we proceeded with the deployment of the fiber-optic network that will enable us to supply private customers with internet speeds of up to 1Gb using the most advanced technologies.
"Partner's TV project, that will be launched as planned in the coming weeks, will be based on the Android TV operating system, with an advanced interface that has been adapted to the needs of Israeli viewers. Our TV subscribers will be able to enjoy linear channels and VOD content, and as part of the same interface, due to the inherent advantage of Android TV, will also be able to benefit from internet content through external applications."
Published by Globes [online], Israel business news - www.globes-online.com - on May 22, 2017
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