Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) today reported its results for the first quarter of 2017, showing a drop in revenue and profit, the number of subscribers, and average monthly revenue per user, combined with an increase in subscribers leaving the company. The board of directors has decided against announcing a cash dividend for the first quarter.
Managed by CEO Nir Sztern, Cellcom's first quarter profit amounted to NIS 26 million, compared with NIS 59 million in the first quarter of 2016, a 56% drop. Profit per share totaled NIS 0.25.
Revenue dipped 6% to NIS 959 million. The decrease in revenue is attributable to revenue from services, which declined 4.5% to NIS 739 million, and revenue from equipment, which fell from NIS 248 million in the first quarter of 2016 to NIS 220 million in the first quarter of this year, a 11.3% drop. Revenue from services in the mobile sector fell 9% to NIS 509 million.
Gross profit was down 16.5% to NIS 294 million, and the gross profit margin fell from 34.4% in the first quarter last year to 30.7% in the first quarter this year. Operating profit fell 33.7% to NIS 67 million, while EBITDA was down 15.5% to NIS 201 million. The ratio of EBITDA to total revenue reached 21% in the first quarter, down from 23.3% in the first quarter of 2016.
Cellcom had 2.792 million subscribers as of the end of the first quarter this year, 9,000 fewer subscribers than in the preceding quarter. The proportion of subscribers leaving the company was 12%, compared with 11.1% in the corresponding quarter last year.
Average monthly revenue per user (ARPU) totaled NIS 60.20 in the first quarter, compared with NIS 65.20 in the corresponding quarter last year.
Cellcom did grow in at least one category of business: the number of Cellcom TV customers grew 13,000 to 124,000, two years after the launch. The number of Cellcom's Internet infrastructure customers was up 17,000 to 173,000.
Published by Globes [online], Israel Business News - www.globes-online.com - on May 24, 2017
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