UPDATE 2-Partner Comms Q1 profit flat as recession bites
* Revenue falls 10.7 pct to 1.412 billion shekels
* To pay dividend of 1.54 shekels a share
* Relying on VoB, ISP services to offset mobile weakness
(Adds details, comments from CEO and analyst, shares)
JERUSALEM, May 21 (Reuters) - Partner Communications (PTNR.O) (PTNR.TA), Israel's second-largest mobile phone operator, reported flat quarterly net profit and said non-cellular activities would help the company in 2009.
"In this quarter we have succeeded in mitigating the recession impact on our cellular business profitability," said David Avner, Partner's chief executive.
He said the business environment had stabilised since February and now had "better clarity."
But the company, which operates under the Orange brand name, reiterated its February outlook, saying profitability for 2009 remains the same, with capital expenditures on fixed assets expected below 600 million shekels.
Partner's Nasdaq-listed shares were down 2.9 percent at $16.86 in morning trade.
Gilad Alper, an analyst at the Nessuah Excellence brokerage, said Partner has succumbed to the effects of a recession.
"The overall picture does not look good, though neither is it catastrophic," he wrote in a client note.
First-quarter net profit amounted to 296.4 million shekels ($71 million), or 1.93 shekels per share, compared with 296.3 million shekels, or 1.88 shekels a share, a year earlier. [ID:nBw215395a].
Revenue slipped to 1.412 billion shekels from 1.581 billion shekels, with service revenues down 2.9 percent to 1.336 billion shekels. Partner cited lower roaming revenues as a result of the recession as well as government mandates that reduced intrerconnect fees and billing intervals to one second from 12.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 2.6 percent to 552 million, with its EBITDA margin reaching 39.1 percent of total revenues. Continued...
