Cellcom Financial Results Still Hurt by Intense Competition
Published on: 6th Mar 2014
By: Ian Mansfield
Israel's Cellcom has posted another decline in fourth quarter revenues and profits as competition continues to eat into the local mobile market.
The company recorded revenues that fell by 14.1% to NIS 1.21 billion (US$348 million), while net profit was down by 9.7% to NIS 102 million (USD29 million).
At the end of 2013 the Company had approximately 3.092 million cellular subscribers. During the fourth quarter of 2013 the Company removed approximately 64,000 pre-paid subscribers from its cellular subscriber base, following a change to its subscribers counting mechanism.
The company's CEO, Nir Sztern said: "Again in this year of aggressive competition, Cellcom Group continues to present good financial results, which are reflected in a free cash flow (after investments) of approximately NIS 1.2 billion."
Following the merger with Netvision, savings are now running at an annual run rate of approximately NIS 640 million. In 2013 the company presented actual savings of over NIS 200 million in selling, marketing, general and administrative expenses, compared to last year.
Sztern warned though that the competition and consequently price erosion in the cellular market will continue in the coming year.
The company also decided not to distribute a dividend for the fourth quarter of 2013, given the intensified competition and its adverse effect on the company's results and in order to further strengthen the balance sheet.