04:59 AM 03/07/12
UPDATE 1-Cellcom sees better 2012 after Q4 profit sinks
* Q4 net profit falls 76 pct to 76 mln shekels
* Co had forecast outcome of 70-80 mln
* Revenue up 0.2 pct to 1.67 bln shekels
* To pay dividend of 0.72 shekels a share
(Adds details, CEO comment)
JERUSALEM, March 7 (Reuters) - Cellcom , Israel's largest mobile phone operator, reported a 76 percent drop in quarterly profit on Wednesday but predicted an improvement in 2012 due to its acquisition of internet service provider Netvision.
Cellcom posted fourth-quarter net income of 76 million shekels ($20 million), down from 319 million a year earlier. It had warned in January that net profit in the final three months of 2011 would be between 70 million shekels and 80 million.
Cellcom and rivals Partner and Bezeq unit Pelephone were hit in 2011 by a steep reduction in the fees mobile operators charge each other to connect calls and the elimination of exit fines for customers.
A lawsuit by customers and a deferred tax expense also weighed on Cellcom's results in the quarter. Cellcom is appealing against the court order that it should repay customers charges it implemented for providing call detail records, having previously provided them free.
Revenue increased by 0.2 percent to 1.67 billion shekels, while earnings before interest, taxes, depreciation and amortisation slid 32.6 percent to 425 million.
Cellcom said it had consolidated Netvision's results starting in the fourth quarter.
Nir Sztern, Cellcom's chief executive, said the company's main goals in 2012 were to cut costs by creating efficiencies and to continue upgrading its network to allow for surfing speeds of up to 84 megabits per second.
"We estimate that we will see the synergies of the merger (with Netvision) both in terms of income and expenses during 2012 and the following years," Sztern said.
"In 2012 and the upcoming years we will deepen our focus on cellular internet growth by continuing to introduce data devices, such as (for) tablets and smartphones," Sztern said.
Its subscriber base fell by 1.3 percent in 2011 to 3.349 million. Some 40 percent were customers of its third-generation (3G) network.
Cellcom said it would pay a quarterly dividend of 72 million shekels, or 0.72 shekels a share. Dividends in 2011 totaled 785 million shekels.
(Reporting by Steven Scheer; Editing by David Holmes)
((steven.scheer@thomsonreuters.com)(+972 2 632 2210)(Reuters Messaging: steven.scheer.thomsonreuters.com@reuters.net))
