Cellcom, Israel's biggest mobile communications operator, today reported netting NIS 153 million for the second quarter of 2002, up 5% from the corresponding quarter of last year. Until the second quarter, Cellcom had been the only one of Israel's three mobile operators that made money. But rival Partner Communications (Nasdaq, TASE:PTNR, LSE:PCCD) also reported reaching the black in the second quarter. Cellcom said its second-quarter revenues climbed 3% from the parallel to NIS 1.3 billion. During the first half, Cellcom invested some NIS 300 million in its GSM/GRPS and TDMA networks. The company has the resources, and credit, to continue investing in both networks. Cellcom's Ebitda (earnings before interest, taxes, depreciation and amortization) remained high at NIS 414 million, about a third of its revenues. Cellcom's chief financial officer, Ytzhak Edelman, commented that at an Ebitda ratio of 1:4 to its debt, the company could meet all its commitments from its operating profits within a year and a half. The company is exploiting only a small part of its potential financial leverage, which gives it a considerable edge, Edelman added. "This is the first quarter that the company's shareholders equity has exceeded NIS 2 billion and comprises 33% of the company's balance," he said. He also noted austerity measures Cellcom had adopted during the second quarter, which were evident in its operating results. Management and general costs decreased by 18% from the previous quarter to NIS 153 million. Sales and marketing expenses grew 5% from the prior quarter to NIS 188 million, mainly due to the aggressiveness of the competition in Israel's practically saturated cellular market. Cellcom also presented financing income despite its debts to the banks, deriving mainly from the company's currency hedging positions. During the second quarter Cellcom inaugurated its GSM/GPRS network, a key milestone for the company, as its president Jacob Perry noted. He said the company has 2.4 million active subscribers.