Pele-Phone Communications can't seem to stop the bleeding. Although it insists it will revert to operating profits this year, for the first quarter it reported a net loss of $13.8 million, almost 14% more than in the previous quarter.
The main factor behind the leap in its losses is its outlay on financing, which soared 65% from the fourth quarter of 2000. Financing costs came to $9.3 million in the first quarter of 2001, up from $5.6 million in the fourth quarter of 2000.
Pele-Phone explains that most of its loans are in dollars, while its income is in shekels. Its results were hurt by the weakening of the dollar against the shekel in the first quarter.
Revenues continued to climb. First-quarter revenue reached $207 million, up 2.7% from the fourth quarter. New subscribers, 107,000 in the first quarter, were responsible for much of that increase.
The company says its revenues would have been $15 million higher if it hadn't lowered rates of incoming calls. The Communications Ministry pushed through a regulation requiring all the cellular carriers to set equal rates for incoming calls.
Before that amendment, Pele-Phone charged 71 agorot per minute for incoming calls, far above the price charged by its rivals. Now they all charge 50 agorot per minute. The company estimates that therate change will cost it $60 million in 2001.
Pele-Phone reported a 15.8% drop in its operating loss from the previous quarter to $8.8 million. Although its general expenses rose a little, its revenues rose by a lot, hence the drop in operating loss. Marketing, sales, management and general expenses came to $43 million in the first quarter.