Cellcom Israel Announces First Quarter 2012 Results

NETANYA, Israel, May 15, 2012 /PRNewswire/ --

Cellcom Israel implemented efficiency measures, which led to a decrease of approximately NIS 80 million in expenses and contributed to improved results in the first quarter 2012 compared with the fourth quarter 2011

Cellcom Israel declares a first quarter dividend of NIS 1.31 per share (totals approx. NIS 130 million), representing approximately 75% of net income

First Quarter 2012 Highlights ^[1]   (compared  to the first quarter 2011):

• Total Revenues totaled NIS 1,585 million ( $427 million), a 0.1% decrease
• Total Revenues from services totaled NIS 1,186 million ( $319 million), a 1.6% decrease
• Revenues from content and value added services (including SMS) increased 10.9%, representing approximately 33.4% of services revenues ^[2]
• EBITDA ^[3] totaled NIS 475 million ( $128 million), a 25.7% decrease
• EBITDA margin 30%, down from 40.3%
• Operating income totaled NIS 275 million ( $74 million), a 41.6% decrease
• Net income totaled NIS 173 million ( $47 million), a 43.5% decrease
• Free cash flow ^[3] to NIS 144 million ( $39 million), a 64.1% decrease
• Cellular Subscriber base totaled approx. 3.362 million at the end of March 2012
• 3G cellular subscribers reached approx. 1.388 million at the end of March 2012, representing 41.3% of total cellular subscriber base
• The Company declared first quarter dividend of NIS 1.31 per share

Cellcom Israel Ltd. (NYSE: CEL TASE: CEL) ("Cellcom Israel", the "Company"), announced today its financial results for the first quarter of 2012. Revenues for the first quarter 2012 totaled NIS 1,585 million ( $427 million); EBITDA for the first quarter 2012 totaled NIS 475 million ( $128 million), or 30% of total revenues; and net income for the first quarter 2012 totaled NIS 173 million ( $47 million). Basic earnings per share for the first quarter 2012 totaled NIS 1.74 ($0.47).

Commenting on the results, Nir Sztern, Chief Executive Officer, said: "I am pleased with the success of the Netvision merger, which already had a positive effect on costs and contributed to revenues, this quarter. Comparing the results of the first quarter of 2012 with the first quarter of 2011, we see a decline in profitability as a result of the regulatory changes and increased competition. However, if we compare the first quarter 2012 with the fourth quarter 2011, we can see a decrease in the Company's expenses of approximately NIS 80 million as a result of the efficiency measures we implemented.

"The intensified competition which characterized this past year, led to a continued reduction in service revenues. The decline in service revenues will continue in the following quarters and may even escalate as a result of the new competition, and so, we intend to implement additional efficiency measures regarding costs and merger synergies, but we estimate that these measures will only partly compensate for the decrease in revenues."

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