Partner: more subscribers, less profits; But the company is still profitable – the capital market

The communications company

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Today, it submitted its reports for the 4th quarter of 2020 and for the entire year, when, like most of the sector, it also experienced changes. But while the company is showing an increase in the number of subscribers throughout the length and breadth of its services – revenues and profits have declined, mainly due to the decline in roaming services.

Revenues in the fourth quarter fell from NIS 834 million to NIS 808, or 3%. The cost of sales dropped from 693 million to 679 million. Gross profit decreased by 9%, from NIS 141 million to NIS 129 million and operating profit decreased by 33%, from NIS 30 million to NIS 20 million. Financing expenses decreased by 35%, from NIS 20 million to NIS 13 million. Net income for the fourth quarter decreased by 295, from NIS 7 million to NIS 5 million and earnings per share decreased by 40%, from 5 agorot per share to 3 agorot per share.

Although EBITDA decreased by 6%, the adjusted EBITDA rate remained at 26%. However, in a year probably due to the decline in roaming services, the average customer revenue (ARPU) fell by about 12%, from NIS 57 to NIS 51.

However, the company can take comfort in the fact that there is an increase in the number of subscribers to its services. Fiber subscriptions increased by about 90%, from 76,000 subscribers to 139,000. The number of households connected to fiber has risen by almost 50%, from 324,000 buildings to 465,000 homes. The number of TV subscribers grew by 23%, from 188,000 to 232,000.

For the entire year, the net profit amounted to NIS 17 million, compared to NIS 19 million in 2019 – a decrease of 11% in total in this challenging year.

Referring to the results of the fourth quarter of 2020 and the entire year, Noted Partner CEO Itzik Benvenisti “In summing up the corona year, and its operational complexity, Partner has managed to maintain revenue stability and profit. In 2020, Partner added hundreds of thousands of subscribers who joined the company’s cellular, Internet and television services. In the past year Partner has expanded mobile growth engines ‘Partner 5G’, on the Internet with the expansion of the independent fiber infrastructure ‘Partner Faber’, and in the growing television service in Israel ‘Partner TV’ with the deepening of cooperation with Netflix in a unique bundle.

“In cellular, Partner’s subscription base grew by 179,000 subscribers in 2020, reaching 2.84 million subscribers, along with a continued increase in customer loyalty with the lowest abandonment rates for more than a decade.

“In 2020, we made the Partner Group’s big leap in the Internet market, with a 23% jump in the number of Internet infrastructure-based subscribers – which amounted to 329,000 subscribers at the end of the year, as a result of tens of thousands of new subscribers to Partner Fiber, the fiber optic infrastructure. The company’s independent infrastructure Partner’s fiber infrastructure currently reaches more than 760,000 households, with more than 500,000 of them in buildings actively connected to the infrastructure and more than 150,000 of them already subscribed to the Internet service on Partner’s fiber optics.

“Partner TV’s service is the fastest growing of all TV services in Israel in 2020, with an addition of 44,000 net subscribers during the year. Currently, Partner TV has about 234,000 subscribers, most of whom are also subscribers to the company’s Internet services .

“At the beginning of 2021, Partner is in an excellent starting position for growth in all areas of activity, thanks to the long-term preparations we have made in recent years, which included both a significant reduction in debt and investment in independent communications infrastructure that allows us to increase profitability.”