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TheStreet Open House

Cellcom Israel Announces Third Quarter 2012 Results

Stocks in this article: CEL

We will continue to strengthen Cellcom Israel's position as a leading communications group, by leveraging future opportunities, such as the wireline wholesale market and entering new areas of activity, such as cellular credit card and the examination of entry into IPTV".

Yaacov Heen ,  Chief Financial Officer ,  commented: "As we anticipated in the previous quarter, we continue to see the Company's revenue erosion due to the transfer of subscribers to the new marketing plans, launched during the second and third quarters of 2012, in response to the heightened competition. Furthermore, we expect this erosion to continue in the fourth quarter as well. Yet, we continue the implementation of efficiency measures in order to continue the adjustment of our expense structure to revenue levels.

The focus on cost reduction and the reduction in inventory levels and handset sales, have led to an improvement in our free cash flow for the third quarter of 2012, which totaled NIS 414 million. The Company's cash balance and future cash generation, will enable us to serve our debt during 2013, without having to raise additional debt.

The Company's Board of Directors decided not to distribute a dividend for the third quarter of 2012, in order to strengthen the Company's balance sheet at this time of market uncertainty. The Board of directors will re-evaluate its decision in the coming quarters as market conditions develop, and taking into consideration the Company's needs".

Main  Consolidated   Financial  Results (financial data for Q3/2011, includes Netvision's results for September 2011 only) :

                            Q3/2012 Q3/2011 (*)   % Change   Q3/2012  Q3/2011
                                                               million US$
                                                               (convenience
                                      million NIS              translation)
    Total revenues            1,448            1,665 (13.0%)    370.1   425.6
    Operating profit            239              349 (31.5%)     61.1    89.2
    Net income                  124              199 (37.7%)     31.7    50.9
    Free cash flow              414              262   58.0%    105.8    67.0
    EBITDA                      430              537 (19.9%)    109.9   137.3
    EBITDA, as percent of
    total revenues            29.7%            32.3%  (8.0%)
 

(*) Since the merger transaction with Netvision was completed on August 31, 2011, Q3/2011 consolidated financial results include Netvision's results for September 2011 only.

Main Financial Data  by Companies:

                 Cellcom Israel without             Consolidation
                                                     adjustments  Consolidated
                       Netvision          Netvision      (*)        results
                                  Change
               Q3/2012  Q3/2011    (%)     Q3/2012                  Q3/2012
    Total
    revenues      1,187    1,567  (24.3%)       291          (30)        1,448
    Total
    service
    revenues
    [4]             902    1,101  (18.1%)       276          (30)        1,148
    Equipment
    revenues        285      466  (38.8%)        15             -          300
    Operating
    profit          220      350  (37.1%)        45          (26)          239
    EBITDA          355      517  (31.3%)        75             -          430
    EBITDA, as
    percent of
    total
    revenues      29.9%    33.0%   (9.4%)     25.8%             -        29.7%

(*)Include elimination of inter-company revenues between Cellcom Israel and Netvision, and amortization expenses attributable to the merger.

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