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August 16, 2009

Cellcom Israel Q2 profit up 15% to NIS277m

Boosted by growing demand for its content, value added and fixed line services

By CBR Staff Writer

Cellcom Israel has posted a 15% increase in its net profit in the second quarter of 2009, due to growing demand for its content, value added and fixed line services.

The company posted a net profit of NIS277m, up from NIS241m reported in the second quarter of 2008. EBITDA for the second quarter of 2009 totalled NIS637m, up 3% from NIS619m in the same period a year-ago.

For the second quarter of 2009, the company reported revenue of NIS1.61 billion, up 0.5% compared to revenue of NIS1.6 billion in the second quarter of 2008.

Amos Shapira, chief executive officer of Cellcom Israel, said, These results are especially noteworthy as we are operating in a challenging competitive environment, highly regulated and turbulent macro-economic environment. This macro-economic environment mainly affected our roaming revenues, as inbound and outbound tourism continued to be impacted by the global economic slowdown.”

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The company said that the increase in revenue from content and value added services has helped it to offset the effect of decrease in roaming revenue from inbound and outbound tourism.

During the quarter, Cellcom Israel has launched the Android by Samsung with Google’s operating system and said that it would launch iPhone by Apple in near future.

Tal Raz, chief financial officer of Cellcom Israel, said: Moreover, our very tight rein on expenses further contributed to profitability as marketing, sales, general and administrative expenses, as a percent of revenues, decreased from 21.9% in second quarter last year to 21.3% in second quarter this year.

“In terms of cash generation, we continued to generate a very healthy free cash flow, increasing 33% from last year to NIS400m, enabling us to once again distribute a dividend totalling approximately NIS300m, representing 108% of net income, to our shareholders.

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