Partner swings to Q4 profit
Haim Saban’s newly acquired mobile carrier posted a profit of NIS 102 million for the fourth quarter, compared with a loss of NIS 188 million for the corresponding quarter.
Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), recently acquired by Haim Saban, today published its financial statements for the fourth quarter and full year of 2012. Full year revenue fell 20% from 2011 to NIS 5.57 billion, and fourth quarter revenue also fell 21% to NIS 1.26 billion.
Net profit rose 8% to NIS 478 million (NIS 3.07 per share) in 2012 from NIS 443 million in 2011. Fourth quarter net profit was NIS 102 million (NIS 0.65 per share), compared with a net loss of NIS 188 million for the corresponding quarter of 2011.
Partner CFO Ziv Leitman said, “The competition and material price erosion that adversely affected our financial results for the fourth quarter of 2012 are continuing in the first quarter of 2013 and may continue further into the year, which could have a material adverse effect on our financial results in the first quarter of 2013 and going forward.”
Average revenue per user (ARPU) fell 18% to NIS 87 per month in 2012, and fell 13% to NIS 97 per month in the fourth quarter. Partner said, “The decrease was partially explained by the seasonal decline, mainly in roaming revenues, and by the continued price erosion and transition of customers to unlimited packages.”
The churn rate rose to 10.9% during the fourth quarter from 10.4% during the preceding quarter.
Partner CEO Haim Romano said, “In 2012, the level of competition in the Israeli telecommunications market greatly intensified and as a result, the significant price erosion in the market impacted the company’s business results as reflected in our financial statements. These trends have continued into the first months of 2013. Nevertheless we have maintained robust free cash flow, whilst continuing to invest in and develop the cellular market’s most technologically advanced infrastructure.”
Cash flow from operations was NIS 1.23 billion in 2012 and NIS 323 million in the fourth quarter. Streamlining measures reduced fourth quarter operating expenses by NIS 50 million compared with the preceding quarter. Partner cut 700 positions during the fourth quarter, and 2,500 positions during the year – 32% of its workforce. The company had 5,396 employees at the end of 2012.
Partner has a market cap of $879.4 million. On January 29, Haim Saban acquired control of Partner from Ilan Ben-Dov’s Scailex Corporation (TASE: SCIX; Pink Sheets:SCIXF). Saban acquired 31% of Partner for NIS 250 million through Saban Capital Group Inc., and assumed Scailex’s $300 million debt to Hutchison Whampoa Ltd. (HKSE: 0013). Scailex still owns 14% of Partner, and Saban will acquire an additional 2% of the carrier from Bank Leumi (TASE: LUMI) unit Leumi Partners Ltd. for NIS 83 million.
Published by Globes [online], Israel business news – www.globes-online.com – on February 27, 2013