Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) reported its fourth quarter and full year 2015 results this morning, with an 8.5% drop in revenue to NIS 4.18 billion from NIS 4.57 billion in 2014. Revenue from services declined 12.1% to NIS 3.132 billion.
EBITDA (earnings before interest, tax, depreciation and amortization) totaled NIS 872 million, 32% down on 2014, while EBITDA as a proportion of revenue was 9%, which compares with 28% in 2014.
Net profit plummeted 72.6% to NIS 97 million versus NIS 354 million in 2014. Free cash flow also fell sharply, by 59%, to NIS 494 million.
Cellcom had 2.835 million mobile subscribers at the end of 2015, representing a 4.4% decline from the 2.967 million subscribers at the end of 2014. The company did manage to reduce its churn rate. ARPU (average revenue per user) fell 9.8% to NIS 65 monthly.
In the fourth quarter, revenue totaled NIS 1,046 million, compared with NIS 1,140 million in the same quarter of 2014, representing a 8.2% decrease. EBITDA totaled was NIS 225 million, compared with NIS 282 million in the same quarter of 2014, representing a 20.2% decrease, while the EBITDA margin declined from 24.7% to 21.5%.
Net profit in the fourth quarter was NIS 19 million, compared with NIS 55 million in the same quarter of 2014, representing a 65.5% decrease.
The company said that it would not distribute a dividend.
Cellcom CEO Nir Sztern said, "2015 reflects the full strength of the competition effects in recent years. Alongside dealing with the competition arena and the decline in the financial indices, 2015 was a significant year in the establishment of the group's strategy for the coming years. This was a year of breakthrough, of significant steps for our future as a communications group, offering a total value proposition to the customer.
"This was the year of Cellcom tv's successful launch, which revolutionized and offers an alternative to the consumer in the TV market, with over 70,000 households enjoying, as of today, the Cellcom tv experience. In 2015, the Group also began operating in the wholesale market with attractive offers to customers both in the triple play and the internet infrastructure and provider worlds. Despite the many challenges in the implementation of the reform, we are leading customer recruitment in the wholesale market with approximately 100,000 households, as of today.
"Entering into the Golan Telecom acquisition agreement is another step in turning Cellcom into a leading communications group. We hope that, as was the case in many markets around the world, the transaction will be reviewed in Israel also based on relevant considerations. As we previously announced, we intend to maintain Golan Telecom as an independent company and we assure all Golan Telecom's customers that all their existing agreements will be honored."
Published by Globes [online], Israel business news - www.globes-online.com - on March 15, 2016
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