Cellcom Advances to Highest Level in 15 Months: Tel Aviv Mover
Cellcom Israel Ltd. (CEL), the country’s biggest mobile phone provider by subscribers, closed at a 15-month high as speculation competition is waning outweighed a decline in the company’s second-quarter profit.
The stock climbed 3.3 percent to 41.55 shekels, the highest level since May 2012, at the close in Tel Aviv. The number of shares traded was 1.1 times the company’s three-month daily average. Israel’s benchmark TA-25 Index added 0.1 percent, rising for a second day.
Cellcom’s average revenue per user increased 3.8 shekels in the three months through June, compared with the previous quarter, the first advance in three years, it said in a statement today. The company is the second-best performer on the TA-25 index (TA-25) this year, with a gain of 35 percent, even as new operators including Hot Telecommunication System Ltd. and Golan Telecom Ltd. entered the market last year, when Cellcom dropped 52 percent.
“The results show some slowing in the competition that has enabled the company to update the price of packages offered,” Ori Licht, the head of research at I.B.I-Israel Brokerage & Investments in Tel Aviv, said in an e-mailed note today. The company reported a loss of 15,000 subscribers in the second quarter, compared with 33,000 in the first three months, Licht said.
Net income slumped 45 percent to 66 million shekels ($18.4 million) as revenue dropped 18 percent to 1.24 billion shekels, Cellcom said in the statement.
“Although a significant slowdown can be seen in the scope of net portability between the cellular companies, competition is still strong and price erosion continues, although at a lower level than before,” Nir Sztern, chief executive officer of Cellcom, said in the statement.
Shares (CEL) of Partner Communications Co. (PTNR), Israel’s second-largest mobile carrier, increased 2.1 percent to 29.15 shekels, the highest level since March 2012. The shares have gained 30 percent this year. Bezeq Israeli Telecommunication Corp. (BEZQ), which provides wireless services via its unit Pelephone Communications Ltd., advanced 1.6 percent, bringing its year-to-date gain to 49 percent.
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