Partner Reports Robust Q3 2023 Performance Despite Revenue Dip - 10% growth in net profit

In the third quarter of 2023, Partner, one of Israel's leading telecommunications companies, demonstrated a resilient financial performance, boasting a 10% growth in net profit, reaching NIS 56 million. Under the leadership of Avi Gabai, the company continues to make strategic moves, achieving its lowest-ever financial debt of NIS 468 million.

The recent agreement with IBC solidified Partner's position as the leader in fiber subscribers in Israel, with an impressive 353 thousand subscribers, constituting 81% of the company's internet user base.

Despite the positive net profit growth, Partner's overall revenues for Q3 stood at NIS 829 million, reflecting a 7% decline from the same period last year. This reduction is attributed to the phased elimination of connectivity fees, initiated in June and slated for complete cessation by 2025.

While the drop in connectivity fees did impact the top line, Partner managed to offset the effect through diligent expense management. Excluding connectivity fees, the company's Q3 revenues were NIS 749 million, a slight increase from NIS 747 million in the corresponding quarter of the previous year.

The quarter's commendable results are credited to the profitability gap between services and end equipment. Partner's service revenues, excluding connectivity fees, saw a 2% increase, amounting to NIS 630 million, while equipment revenues experienced a 27% decrease, totaling NIS 119 million. Partner's EBITDA reached a nine-year high at NIS 276 million, reflecting a 3% increase compared to Q3 of the previous year.

In the mobile sector, Partner reported a significant jump in the average monthly income per customer (ARPU minus KSH), rising to NIS 45 from NIS 39 at the end of Q3 2022. The abandonment rate among the company's mobile customers decreased to 5.5%, a notable improvement from 8.9% in the same period last year. This positive trend in ARPU and customer retention is attributed, in part, to Partner's strategic focus on premium service subscribers while minimizing less profitable subscriptions.

Despite a slight decrease of 283 thousand subscribers in the cellular segment, totaling 2.655 million, Partner clarified that this adjustment stems from a change in the company's subscriber counting methodology.

Additionally, the company's television subscribers amounted to 210,000, showing a modest decrease of 3,000 subscribers compared to the previous quarter.

Partner's solid performance in the face of revenue challenges underscores its adaptability and strategic prowess in navigating the evolving landscape of the telecommunications industry.