Moshe Kahlon, who was the Minister of Communications, won the public’s sympathy thanks to one big and determined action – a war on the cell phone companies. He created great competition in the market and crushed the prices. He saved each user hundreds of shekels and each house thousands of shekels. It’s real and tested in case you forgot. So remind him of this, even at his current low point – the involvement in the Kikyon company Yount that provides non-bank credit in which irregularities were found and many millions disappeared from its coffers.
Kahlon, by the way, did not fight the dominant and strongest body – Bezeq. The weakness of the cellular companies only strengthened Bezeq (which, although it was hurt due to its holding in Pelephone, but relative to the field it only got stronger). The fall of the cellular companies brought Cellcom down and was the straw that broke the camel’s back, the straw that brought down Nochi Dankner’s Idibi group. That was a bit of history, and we will return to the present. The battered and depressed cellular companies are apparently embarking on a new path after 10 years of shuffling and shrinking profits.
Pelephone’s reports from today probably portend good reports for the entire field, which is benefiting from a certain decrease in competition, an improvement in subscriber income and revenues abroad (with high profitability; by the way, this probably means that the third quarter will be better). Pelephone’s representative profit reaches a rate of 200-250 million Shekel and it is growing, the respective margins are increasing and most importantly – the income from the subscription is increasing. It seems that the cellular companies can start to smile after many years of depression.
Pelephone reports record revenue from services for three years – which amounted to approximately NIS 446 million, an increase of approximately 9% compared to the corresponding quarter, as a result of an increase in revenue from roaming services and growth in 5G package subscribers and the status of subscribers.
The operating profit increased by about 247%, the net profit increased by about 130%, and the adjusted EBITDA index improved by about 18.4%. In the second quarter, about 53 thousand subscribers were added, alongside a consistent increase in the number of 5th generation package subscribers, which currently stands at about 702 thousand subscribers. The company’s subscriber base as of the end of June stands at approximately 2.636 million subscribers.
Free cash flow increased by NIS 95 million, to NIS 131 million, an increase of approximately 264%. And the most important figure – an increase in the average monthly income per customer (ARPU) which was about NIS 57, an increase of about NIS 3 compared to the corresponding quarter.
Daganit Kramer, CEO of Pelephone, yes and Bezeq International, said upon the publication of the results: “The subsidiaries continue to make progress in the implementation of the strategy with excellent financial results at Pelephone, growth in yes subscribers and the continued transition to IP alongside a focus on the cloud activity and server farms at Bezeq International, These are actually the fruits of the tight work that has been done in the companies in recent years. We see a significant increase in the profitability indicators in Pelephone.”
The revenues from end equipment amounted to approximately NIS 153 million, a decrease of approximately 8.4%, which was mainly due to the change in the launch dates of new model devices. The increase in total revenues was 4% to NIS 599 million. The company recorded a decrease in operating expenses that amounted to approximately NIS 548 million – a decrease of approximately 2.8%, which was mainly due to a decrease in the cost of selling end equipment at the same time as a decrease in income from end equipment.
The EBITDA amounted to approximately NIS 188 million, an increase of approximately 18.2%. The adjusted EBITDA amounted to about NIS 187 million (adjusted EBITDA rate – 31.2%), an increase of about 18.4%.
The net profit amounted to NIS 46 million, an increase of 130%. The net profit in the first half of 2022 amounted to approximately NIS 102 million, an increase of approximately 264.3%.
An increase in the free flow which amounted to about NIS 131 million, an improvement of about 263.9%. The increase in free flow was mainly due to an increase in profit and an improvement and timing differences in working capital. The free flow in the first half of 2022 amounted to approximately NIS 276 million, compared to a negative free flow of approximately NIS 23 million in the corresponding period.
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