Cellcom reported a 3.8% drop in first quarter to revenue to NIS 1,022 million ($271 million), compared with NIS 1,062 million ($282 million) in the first quarter last year. Service revenues totaled NIS 774 million ($206 million), compared with NIS 800 million ($212 million) in the first quarter last year, representing a decrease of 3.3%.
Revenue from mobile telephony services totaled NIS 559 million ($148 million), 4% less than in the corresponding quarter of 2015. The company said that the decline was due to continued erosion in prices and to subscribers leaving because of the greater competition in this area. Revenue from fixed-line services fell 1.9% to NIS 264 million ($70 million), mainly because of a fall in revenue from international calls, partly offset by revenue from television services. Revenue from sales of equipment fell 5.3% to NIS 248 million ($66 million).
Cellcom's mobile telephony subscriber base declined by 2.5% to a total of 2.81 million at the end of the first quarter this year. The churn rate fell however by 6.7% to 11.1% in the quarter. ARPU (average monthly revenue per user) was NIS 65.2, 0.55 less than in the corresponding quarter.
EBITDA in the first quarter of 2016 totaled NIS 238 million ($63 million) compared with NIS 196 million ($52 million) in the first quarter of 2015, representing a rise of 21.4%. Excluding a one-time expense of NIS 226 million ($60 million) in the first quarter last year, the increase was 5.3%.
Cellcom's net profit totaled NIS 59 million ($16 million) in the first quarter of 2016, compared with NIS 26 million ($7 million) in the corresponding quarter, representing a rise of 126.9%. Excluding the one-time expense, the rise was 15.7%. Basic earnings per share for the first quarter of 2016 totaled NIS 0.59 ($0.16).
Free cash flow totaled NIS 149 million ($40 million) in the first quarter of 2016, which compares with NIS 127 million ($34 million) in the first quarter last year, giving an increase of 17.3%
Cellcom CEO Nir Sztern said, "Despite the challenging competitive environment, in the first quarter of 2016 the group succeeded in strengthening its financial stability and recorded an improvement in the financial indicators alongside a decrease in expenses. In this quarter compared to the first quarter last year, the net income was doubled, EBITDA increased by 21.4% and Free Cash Flow increased by 17.3%.
"We continue to see the fruits of our work as a communications group, providing the customer a complete value offer. Despite many challenges in the landline wholesale market, we are leading landline customer acquisition, with, as at March 31, 2016, over 120,000 households in the landline wholesale market and approximately 75,000 households in Cellcom tv, an addition of approximately 11,000 Cellcom tv households in the first quarter 2016.
"We continue our efforts to strengthen our position as a leading communications group. Over the last year we have substantially enlarged Cellcom tv's content offering and we have recently announced the addition of sports channels to Cellcom tv. Since the successful launch of these sport channels, the daily pace of customers joining Cellcom tv has doubled."
Cellcom's board of directors decided not to distribute a dividend for the first quarter of 2016.
Published by Globes [online], Israel business news - www.globes-online.com - on May 23, 2016
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