Partner profit plummets
Second quarter net profit fell 83% from the corresponding quarter to NIS 180 million as market competition continues to take its toll.
Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) reported sharply lower revenue and profits for the second quarter of 2013, but CEO Haim Romano promises to continue investment in an advanced network, quality customer service and advanced technology.
Revenue fell 21% to NIS 1.13 billion ($312 million) for the second quarter from $1.43 billion for the corresponding quarter of 2012. Service revenue fell 22% to NIS 950 million for the second quarter from NIS 1.21 billion for the corresponding quarter, which includes a 23% drop in mobile service revenue to NIS 726 million from NIS 949 million, and an 8% drop in fixed line service revenue to NIS 277 million from NIS 300 million. Partner attributes most of the drop in revenue to the price erosion of cellular services, including voice and data services, as well as fewer mobile and Internet service subscribers.
Equipment revenue fell 16% to NIS 180 million for the second quarter from NIS 215 million for the corresponding quarter, due to lower sales of mobile devices and lower profit margins for them.
Net profit fell 83% to NIS 20 million ($6 million) (NIS 0.13 or $0.04 per share) for the second quarter from NIS 120 million for the corresponding quarter.
Cash flow from operations dipped 0.5% to NIS 415 million for the second quarter from NIS 417 million for the corresponding quarter.
Although Partner slowed its churn rate to 9.4% during the second quarter from 10.4% in the preceding quarter, it continued to shed mobile subscribers, losing a net 11,000 subscribers during the second quarter to 2.92 million subscribers at the end of June.
Average revenue per user (ARPU) fell 18% to NIS 83 per month in the second quarter from NIS 101 per month in the corresponding quarter, due to increased market competition, but average minutes of use (MOU) per customer rose 22% to 532 minutes per month from 437 minutes.
Partner said that, due to the continued increase in the proportion of mobile subscribers with bundled packages that include large or unlimited quantities of minutes, it believes that reporting MOU is no longer useful to understanding operating results, and it may end reporting MOU from the end of 2013.
Published by Globes [online], Israel business news – www.globes-online.com – on August 28, 2013