Israel's Partner Comms warns on outlook after Q4 profit drop

TEL AVIV, March 25 (Reuters) - Israeli telecoms group Partner Communications posted a 29% decline in fourth-quarter net profit on Thursday and said it expected the negative impact from the coronavirus pandemic to continue in the first quarter of 2021.

Partner, Israel’s second-largest mobile operator, earned 5 million shekels ($1.5 million) in the October-December period, down from 7 million a year earlier as strong growth in its internet and TV services only partly offset an overall revenue decline due to COVID-19.

Revenue dropped 3% to 808 million shekels, hurt by restrictions on international travel that curtailed roaming services.

“(Continued) subscriber growth in the cellular and fixed-line segments lessened the impact of COVID-19 on our results,” Chief Financial Officer Tamir Amar said.

Partner’s mobile subscriber base grew by 74,000 in the last three months of 2020 to 2.84 million, while customers for its TV service reached 232,000. Its ultra-fast internet service now reaches 760,000 households via a fibre optic network in Israel and Partner currently has more than 150,000 customers.

Amar said Partner would accelerate the rollout of its fibre optic services and expects to connect more of its customers to Israel’s nascent fifth generation (5G) mobile network.

Israel is preparing for a tender to allocate more 5G frequencies as soon as late 2021, aiming in part to give mobile operators a new revenue stream.

Although the almost complete cessation of air travel and closure of stores for part of the first quarter will continue to weigh, the magnitude of the impact is not expected to differ materially from that in the fourth quarter, Amar said.

Partner’s 2020 full-year profit slipped 11% to 17 million shekels.

Even before the pandemic, Partner and its peers had struggled to remain profitable after a shake up of Israel’s mobile phone industry in 2012. A host of new operators sparked a price war that led to steep drops in subscribers, revenue and profit for Partner and rival incumbents Cellcom Pelephone, a unit of Bezeq. ($1 = 3.3076 shekels) (Reporting by Rami Ayyub Editing by Steven Scheer, Kirsten Donovan)