Business in Brief: Cellcom’s Fourth-quarter Profits Plunge 26% Amid Intense Competition

MirLand turns in $183 million quarterly profit thanks to bailout | Tel Aviv shares trade quietly ahead of U.S. Fed rate decision

Cellcom shop photographed in January 2014.
Baz Ratner/Reuters

Cellcom’s fourth-quarter profits plunge 26% amid intense competition

Cellcom Israel, the country’s largest mobile operator, on Wednesday reported a 26% drop in fourth-quarter profit it ascribed to intense competition. Cellcom earned 14 million shekels ($3.8 million), down from 19 million a year earlier as revenue slipped 5.9% to 984 million shekels. The company, the first telecom operator to report results, had been forecast to earn 17 million shekels on revenue of 984 million, according to a Reuters poll of analysts. Cellcom said its mobile subscriber base dipped 1.2% in 2016 to 2.801 million, but the company said the internet-TV service it launched in 2015, continued to grow and now counted 122,000 subscribers.”We continue to work actively in the landline market and to date, more than 180,000 households have subscribed to our internet infrastructure service,” said CEO Nir Sztern The board voted not to distribute a fourth-quarter dividend, citing the continued intense competition. Shares of Cellcom finished down 2.75% at 38.21 shekels. (TheMarker Staff)

MirLand turns in $183 million quarterly profit thanks to bailout

The fruits of MirLand’s 2016 bailout reached its bottom line in the fourth quarter as the property developer on Wednesday reported a $183 million profit, compared with a $33 million year-earlier loss. The company, a developer of Russian real estate that had been controlled by Eliezer Fishman, attributed the turnaround mainly to $222 million in financial income due to the debt-for-equity swap that was part of the bailout. The nearly $500 million bailout with banks and bondholders erased about 80% of the company’s debt.  Revenue rose 102% from $58 million in sales of apartments in its flagship St. Petersburg housing development. Although the Russian economy remains depressed, a stronger ruble boosted revenues from rentals 2.2%. However, MirLand had to write down $37 million from the value of its Russian property portfolio. Shares of MirLand, which have soared 69% so far this year, ended down 3.1% at 3.09 shekels (85 cents). (Yoram Gabison)

Tel Aviv shares trade quietly ahead of U.S. Fed rate decision

Tel Aviv shares traded quietly on Wednesday as world markets awaited the U.S. Federal Reserve’s interest rate decision. The blue chip TA-35 index finished ahead 0.2% at 1,438.12 points, while the TA-125 eked out an 0.04% gain to 1,279.83, on turnover of 1.1 billion shekels ($300 million). Ormat Technologies led TA-125 shares higher on a 4.7% advance to 215.60 shekels. Amot rose 3.6% to a close of 17.85 after its net operating income rose 10% last year and that it was declaring an aggregate 173 million shekels in dividends. Avgol sank 3.8% to 4.68 after it reported that operating profit had fallen 13% to $12.1 million in the fourth quarter. Insurance stocks were mostly lower, paced by drops of 2.4% to 180.10 by IDI and 1.6% to 3.92 in Migdal. Foresight extended the rally set off by rival self-driving tech company Mobileye’s sale to Intel for a third day. It closed 10.8% higher at 2.91, bringing its gain since Monday to more than 32%. The dollar and euro eased lower against the shekel.  (Guy Erez)