Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) reported sharply lower net profits on lower revenue for the second quarter of 2012, but will nevertheless distribute a dividend of NIS 160 million, 60% of its net profit for the first half of the year.
Revenue fell 24% to NIS 1.43 billion ($364 million) for the second quarter from NIS 1.89 billion for the corresponding quarter of 2011. Net profit fell 41% to NIS 120 million ($ 31 million (NIS 0.77 or $0.21 per share) for the second quarter from NIS 205 million for the corresponding quarter.
Equipment sales fell 59% to NIS 215 million for the second quarter from NIS 527 million for the corresponding quarter, due to lower smartphone sales and more stringent payment terms. Service revenue fell 11% to NIS 1.21 billion (including NIS 949 million mobile services revenue) from NIS 1.36 billion, due to the entry of new carriers and lower tariffs.
Mobile revenue fell 27% to NIS 1.16 billion for the second quarter from NIS 1.59 billion for the corresponding quarter, and fixed-line revenue fell 7% to NIS 308 million from NIS 332 million. Partner, including 012 Smile Telecom Ltd., lost a net 9,000 fixed-line subscribers over the preceding year to 281,000 at the end of June, and lost 23,000 ISP subscribers over the same period to 609,000
Cash flow from operations rose 69% to NIS 417 million for the second quarter from NIS 247 million for the corresponding quarter.
Partner lost a net 49,000 subscribers during the second quarter to 3.1 million subscribers at the end of June, and the churn rate rose to 8.9% during the second quarter from 6.5% during the corresponding quarter, due to the entry of two new mobile carriers and mobile virtual network operators (MVNO)
Average revenue per user (ARPU) fell 10% to NIS 101 per month during the second quarter from NIS 112 during the corresponding quarter, despite a 10% increase in average minutes of use per user to 437 minutes per month from 396 minutes per month during the corresponding quarter.
Partner CEO Haim Romano noted the launch of its 012 Mobile brand and the carrier's planned Internet television (IPTV) services. He also pointed to NIS 100 million in operating expenses savings over the preceding nine months from streamlining measures, including the elimination of 2,100 jobs.
Partner's share price rose 5.3% in morning trading on the TASE today to NIS 14,20, despite falling 4.6% on Nasdaq yesterday to $3.36, giving a market cap of $523 million.
Published by Globes [online], Israel business news - www.globes-online.com - on August 14, 2012
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