Roundup / Cellcom halts dividend flow
Partner Communications shedding users while Elbit's operating profit is on the rise.
Cellcom profit halved as competition rises: Cellcom's results for the second quarter of 2012, filed on Tuesday, clearly show the strains and scars of competition, leading the mobile operator to halt the dividend flow to shareholders. Revenues fell nearly 6% year over year to just under NIS 1.5 billion, and net profit shrank by half to NIS 121 million, compared with NIS 244 million in the corresponding period of the year before. Operating profit fell by almost 30% to NIS 282 million. CEO Nir Stern said the results showed the "success" of the company's strategy, and stressed that the merger with 013 Netvision had gone smoothly. He also said that aggressive efficiency measures had saved Cellcom NIS 300 million in annualized terms. Now you know. Israel's three cellular giants, Cellcom, Partner and Pelephone, have all seen their bottom lines drop hard as newcomers enter the market – both full-scale operators and mobile virtual network operators.
Partner paying dividend despite fall in profit: Apropos of the cellular pack, Partner Communications also took a hit, but it's going to hand out dividends anyway after two quarters of forgoing that pleasure. The company said on Tuesday that its second-quarter net profit shrank 41% year over year to NIS 120 million, and that operating profits contracted 33% compared with the corresponding period of the year before, to NIS 231 million. It, too was the casualty of competition. Partner, which operates under the Orange brand name, said revenues fell 24% in the second quarter compared with the year before to NIS 1.4 billion. It also admitted to shedding 49,000 users during the quarter, reducing its subscriber base to 3.1 million; and added that its net debt totals NIS 4.2 billion.
Operating profit rises at Elbit Systems: Two days after its chief executive Yakov Ackerman revealed that he's moving on, Elbit Systems reported unchanged second-quarter non-GAAP net profit of $38 million, and a decision to pay shareholders a dividend of 30 cents per share on September 10, costing it $13 million. Sales for the quarter were down 2% to $676 million as Elbit Systems, which makes electronic systems for surveillance, warfare and the like, and is feeling the pinch of the West cutting back on defense budgets. Elbit Systems took its own measures by shaving back management and general costs, and has been shifting its center of attention – read, marketing efforts – to countries where sales are still growing in Asia and Latin America.
Verint in reverse takeover of parent Comverse: Technology company Verint Systems is acquiring its parent, Comverse Technology Holding Company, in a reverse takeover. Verint will issue 27.5 million of its common shares to Comverse – an amount equal to what Comverse is now holding in Verint, to give it a 42% stake – as well as additional stock valued at $25 million. No cash will change hands. Later Comverse Technology Holding will spin off its shares in its core business, Comverse Technology.
With reporting by Vadim Sviderski