Electra Consumer Products (TASE: ELEK) today reported results for the first time since selling its water bar business and its holdings in the Ace Office Depot chain and acquiring Alpha, the franchise holder for Huawei in Israel, and cellular communications company Golan Telecom Ltd..
Electra Consumer, managed by CEO Zeev Kalimi, reported a NIS 37.7 million net profit, the same as in the second quarter of 2016, which also included the net profit from the activity of the Ace chain (since sold, as mentioned). Net profit from continuing activities rose from NIS 27.1 million in the corresponding quarter last year to NIS 37.7 million in the second quarter of 2017.
Electra Consumer's revenue grew 13.3% to NIS 782.1 million, mainly as a result of the consolidation of Golan Telecom's results. The company's results were also affected by the timing of the Passover holiday, which began in the first half of April, meaning that the effect of orders made in advance of the the holiday was felt in the first quarter of 2017, while the holiday fell in the second half of April in 2016, meaning that its effect was felt in the second quarter of that year.
Operating profit rose 53.6% to NIS 63.8 million, and EBITDA grew 86.4% to NIS 90.5 million.
Electra Consumer's shareholders' equity rose 28% to NIS 638.9 million as of the end of the second quarter, after the company distributed a NIS 55 million dividend. When the latest results were announced, the company's board of directors approved a NIS 31 million dividend.
Results of Golan Telecom revealed
In the framework of the consolidation of Golan Telecom's results in Electra Consumer's financial statements, the company announced that the mobile telephony company made a profit of NIS 21.4 million on NIS 133.5 million in revenue. Golan Telecom had 892,000 subscribers as of the end of the second quarter, compared with 900,000 as of the end of 2016.
Golan Telecom's average monthly revenue per user (ARPU) was NIS 50. The company estimates that it has a 16% share of the private market and an 8.5% share of the overall market. Golan Telecom had 252 employees at the end of the second quarter, compared with 236 at the end of 2016.
Several factors are liable to have a negative impact on Golan Telecom's activity, including a continued loss of subscribers and further erosion in ARPU. Another risk factor is the anticipated entry of Xfone into the mobile telephony market.
Published by Globes [online], Israel Business News - www.globes-online.com - on August 20, 2017
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