[November 12, 2014] |
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Partner Communications Reports Third Quarter 2014 Results1
ROSH HA'AYIN, Israel --(Business Wire)--
Partner
Communications Company Ltd. ("Partner" or the "Company") (NASDAQ
and TASE:PTNR), a leading Israeli communications operator, announced
today its results for the quarter ended September 30, 2014.
Commenting on the third quarter results, Mr. Haim Romano, CEO of
Partner noted:
"Similar to recent quarters, this quarter was characterized by the
continued intense competition in the telecoms market which impacts on
service revenues. The Company is taking a variety of measures to cope
with the changing market reality and to mitigate its impact. Partner
continues to implement its strategy which is based on technological
leadership and an innovative product offering, a strategy which proved
itself again this quarter.
The Company's success in implementing its strategy is expressed through
the loyalty of our customers and by an increase in our Post-Paid
subscriber base for the sixth consecutive quarter, which grew this
quarter by approximately 7,000 subscribers.
In the reported quarter, the Company continued to invest in technology
and the deployment of 4G sites and was the first mobile operator to
launch a 4G network with the broadest coverage in Israel within the band
permitted by the Ministry of Communications. Currently, Partner has
approximately 1,000 4G sites transmitting from Kiryat Shmona (the most
Northern city in Israel) to Eilat (the most Southern city in Israel). In
addition, Partner leads with the fastest cellular browsing speeds in
Israel by a significant gap compared to its competitors, based on
independent testing carried out by Ookla - a company specialized in
measuring and comparing Internet speed and performance worldwide. We are
making preparations to provide our customers with the full potential
embodied in the 4G network which will be made available after the
completion of the 4G frequencies tender, expected to be held in December
2014.
At the end of 2013, we established the retail division which focuses on
selling telecom devices and complementary accessories. In this quarter,
we recorded a 44% increase in revenues from device sales compared to the
comparable quarter last year, while improving profitability levels. Our
retail approach calls for making the Company's device sales, products
and services accessible to the consumers of all the cellular operators,
while exposing them to the quality and variety of our offering as well
as excellence in service.
We recently launched innovative applications in the fields of medicine
and automotive location-based services which provide alerts for distress
or loss, and cloud-based services using advanced 4G technology, in which
internet speed is part of the product quality. These applications and
services are offered to customers of all the cellular operators.
We are reviewing entrance to the television market in order to provide a
quality alternative service at an attractive price to the Israeli
public. Our entrance to this market depends on the removal of regulatory
entrance barriers.
Mr. Issac Benbenisti joined Partner's senior management team as deputy
CEO in early November. Mr. Benbenisti's rich experience in the telecoms
market and his proven achievements over the years will significantly
reinforce Partner's group activities and will emphasize its advantage in
the ability to offer a broad range of advanced telecom solutions to the
benefit of our customers.
We recently began initial discussions with employee representatives on a
collective agreement, following the recognition of the Histadrut as the
representative employees' labor organization by Partner's management. We
believe that the eventual collective bargaining agreement will continue
to reflect Partner's unique organizational culture which has contributed
to our designation as "the best company to work for" among the cellular
companies.
We continued to act to reduce the Company debt which totaled
approximately NIS 2.6 billion at the end of the third quarter, down NIS
571 million compared to the end of the third quarter last year."
In conclusion, Mr. Romano noted: "I believe that the resiliency of the
Company and adherence to our vision to lead in technology, quality of
service and human capital, while expanding our offering to the customer,
will continue to contribute to the Company's leading position in the
Israeli telecoms market."
Mr. Ziv Leitman, Partner's Chief Financial Officer commented on
the quarterly results as compared to the previous quarter:
"During the third quarter of 2014, the intense competition in the
cellular market remained unchanged, which was expressed by the continued
erosion in cellular service revenues.
The churn rate for cellular subscribers during the third quarter of 2014
increased to 12.0% compared to 11.4% in the previous quarter, as a
result of the increase in churn of Pre-Paid subscribers, while the churn
of Post-Paid subscribers remained stable.
Cellular ARPU in the third quarter of 2014 totaled NIS 76, similar to
the previous quarter. The stability in ARPU resulted primarily from the
offsetting of the continued price erosion of cellular services, a result
of the intense competition, by a seasonal increase in roaming revenues
as well as an increase in revenues from national roaming services. The
Company estimates that, as a result of the outlook for continued price
erosion and the negative seasonal impact typical of the last quarter of
the year, cellular ARPU in the fourth quarter is expected to be lower
than in the third quarter by a few NIS.
Revenues from equipment sales in the third quarter of 2014 increased by
NIS 15 million compared to the previous quarter; while the gross profit
from equipment sales increased by NIS 6 million compared to the previous
quarter, primarily due to a change in the product mix.
Operating expenses increased by NIS 15 million, largely a result of
seasonal increases in direct revenue-related expenses such as payments
to communication providers.
Adjusted EBITDA in the third quarter of 2014 decreased by NIS 9 million
compared with the previous quarter, resulting primarily from the
continued erosion in cellular service revenues, together with an
increase in operating expenses. This decline was partially offset by the
increase in gross profit from equipment sales.
For the fixed line segment alone, Adjusted EBITDA in the third quarter
of 2014 increased by NIS 11 million, mainly reflecting an increase in
gross profit from equipment sales following the launch of sales of
tablets to fixed line customers, and other one-time items.
Finance costs, net, totaled NIS 50 million this quarter, a level similar
to the previous quarter. This quarter the Company recorded higher losses
from foreign exchange movements as a result of the strengthening of the
USD and the weakening of the Euro which were offset by lower CPI linkage
expenses and no one-time repayment fee for bank loans which was recorded
in the second quarter of 2014.
Profit in the third quarter of 2014 totaled NIS 40 million compared with
NIS 46 million in the previous quarter, as a result of the decline in
Adjusted EBITDA.
Free cash flow (after interest payments) in the third quarter totaled
NIS 106 million, compared with NIS 123 million in the second quarter of
2014. Free cash flow was impacted by an increase in payments to
equipment suppliers and a one-time payment in connection with site
leasing which was mostly offset by a one-time increase in receipts and
the absence of the semi-annual interest payments.
As of September 30, 2014, net debt amounted to approximately NIS
2.6 billion, which represents a decline of NIS 2.2 billion since the
Company began the process of reducing its debt level in mid-2011."
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Key Financial Results6
(unaudited)
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NIS MILLION (except EPS)
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Q3'14
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Q3'13
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% Change
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Revenues
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1,102
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1,118
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-1
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%
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Cost of revenues
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850
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861
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-1
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%
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Gross profit
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252
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257
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-2
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%
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Operating profit
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110
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109
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+1
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%
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Profit for the period
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40
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38
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+5
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%
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Earnings per share (basic, NIS)
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0.26
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0.24
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+8
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%
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Free cash flow (before interest)
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112
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273
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-59
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%
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Key Operating Indicators:
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Q3'14
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Q3'13
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Change
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Adjusted EBITDA (NIS million)
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282
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284
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-1
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%
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Adjusted EBITDA as a percentage of total revenues
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26
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%
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25
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%
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+1
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Cellular Subscribers (end of period, thousands)
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2,894
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2,950
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-56
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Quarterly Cellular Churn Rate (%)
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12.0
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%
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8.8
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%
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+3.2
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Monthly Average Revenue per Cellular User (ARPU) (NIS)
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76
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84
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-10
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%
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Partner Consolidated Results (unaudited)
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Cellular Segment
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Fixed Line Segment
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Elimination
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Consolidated
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NIS Million
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Q3'14
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Q3'13
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Change
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%
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Q3'14
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Q3'13
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Change
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%
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Q3'14
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Q3'13
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Q3'14
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Q3'13
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Change
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%
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Total Revenues
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876
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898
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-2
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%
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281
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274
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+3
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%
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(55
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(54
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1,102
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1,118
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-1
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%
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Service Revenues
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658
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738
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-11
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%
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259
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267
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-3
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%
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(55
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(54
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862
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951
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-9
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%
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Equipment Revenues
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218
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160
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+36
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%
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22
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7
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+214
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%
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-
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-
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240
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167
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+44
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%
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Operating Profit
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57
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64
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-11
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%
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53
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45
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+18
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%
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-
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-
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110
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109
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+1
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%
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Adjusted EBITDA
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191
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201
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-5
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%
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91
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83
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+10
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%
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-
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-
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282
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284
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-1
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%
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Financial Review (Consolidated)
In Q3 2014, total revenues were NIS 1,102 million (US$ 298
million), a decrease of 1% from NIS 1,118 million in Q3 2013.
Service revenues in Q3 2014 totaled NIS 862 million (US$ 233
million), a decrease of 9% from NIS 951 million in Q3 2013.
Service revenues for the cellular segment in Q3 2014 were NIS 658
million (US$ 178 million), a decrease of 11% from NIS 738 million in Q3
2013. The decrease was mainly the result of the continued price erosion
of Post-Paid and Pre-Paid cellular services due to the intense
competition, partially offset by an increase in revenues from national
roaming services.
Service revenues for the fixed line segment in Q3 2014 totaled
NIS 259 million (US$ 70 million), a decrease of 3% compared with NIS 267
million in Q3 2013. The decrease mainly reflected price erosion in fixed
line services, as well as a decrease in interconnect revenues following
a reduction in the fixed line interconnect tariff in December 2013.
Equipment revenues in Q3 2014 totaled NIS 240 million (US$ 65
million), an increase of 44% compared with NIS 167 million in Q3 2013.
The growth was due primarily to an increase in the number of devices
sold.
Gross profit from equipment sales in Q3 2014 was NIS 64
million (US$ 17 million), compared with NIS 10 million in Q3 2013, an
increase of NIS 54 million. The increase resulted primarily from
improved profit margins, in addition to the increase in the number of
devices sold.
Operating expenses ('OPEX', including cost of service revenues,
selling, marketing and administrative expenses and excluding
depreciation and amortization) totaled NIS 657 million (US$ 178 million)
in Q3 2014, a decrease of 6% or NIS 39 million from Q3 2013. The
decrease largely reflected the impact of the efficiency measures
undertaken in the last twelve months as well as lower interconnect
expenses partially due to the reduction in the fixed line interconnect
tariff by approximately 60% in December 2013. Operating expenses
including depreciation and amortization expenses in Q3 2014 decreased by
5% compared with Q3 2013.
Adjusted EBITDA in Q3 2014 totaled NIS 282 million (US$ 76
million), a decrease of 1% from NIS 284 million in Q3 2013.
Adjusted EBITDA for the cellular segment was NIS 191 million (US$ 52
million) in Q3 2014, a decrease of 5% from NIS 201 million in Q3 2013,
reflecting the decrease in service revenues, partially offset by the
higher gross profit from equipment sales and lower operating expenses.
As a percentage of total cellular revenues, Adjusted EBITDA for the
cellular segment in Q3 2014 was 22%, unchanged from Q3 2013.
Adjusted EBITDA for the fixed line segment increased by 10% from NIS 83
million in Q3 2013 to NIS 91 million (US$ 25 million) in Q3 2014, mainly
reflecting an increase in gross profit from equipment revenues following
the launch of sales of tablets to fixed line customers, together with
lower operating costs, partially offset by a decline in service
revenues. As a percentage of total fixed line revenues, Adjusted EBITDA
for the fixed line segment in Q3 2014 was 32%, compared with 30% in Q3
2013.
Operating profit for Q3 2014 was NIS 110 million (US$ 30
million), an increase of 1% compared with operating profit in Q3 2013 of
NIS 109 million.
Finance costs, net in Q3 2014 were NIS 50 million (US$ 14
million), a decrease of 6%, compared with NIS 53 million in Q3 2013. The
decrease was mainly a result of lower linkage expenses due to a smaller
increase in the CPI (Consumer Price Index) during Q3 2014, as well as a
decrease in interest expenses resulting from the lower level of average
debt (see Funding and Investing Review below), which were partially
offset by the impact of losses from foreign exchange movements in Q3
2014 compared with foreign exchange gains in Q3 2013.
Profit in Q3 2014 was NIS 40 million (US$ 11 million), an
increase of 5% compared with profit in Q3 2013 of NIS 38 million. The
increase in profit reflects both the increase in operating profit and
lower finance costs, net, partially offset by higher income tax expenses.
Based on the weighted average number of shares outstanding during Q3
2014, basic earnings per share or ADS, was NIS 0.26 (US$ 0.07),
an increase of 8% compared to NIS 0.24 in Q3 2013.
The effective tax rate for Q3 2014 was 33%, similar to the
comparable quarter last year.
Cellular Segment Operational Review
At the end of the third quarter 2014, the Company's cellular
subscriber base (including mobile data and 012 Mobile subscribers)
was approximately 2.89 million, including approximately 2.15 million
Post-Paid subscribers or 74% of the base, and approximately 749 thousand
Pre-Paid subscribers, or 26% of the subscriber base.
During the third quarter of 2014, the cellular subscriber base declined
by approximately 20,000 subscribers. While the Pre-Paid subscriber base
decreased by approximately 27,000 subscribers, the Post-Paid subscriber
base increased by approximately 7,000 subscribers.
The quarterly churn rate for cellular subscribers in Q3 2014 was
12.0%, compared with 8.8% in Q3 2013 (and 11.4% in Q2 2014), with the
increase compared with Q3 2013 reflecting the greater intensity in
competition in the cellular market.
Total cellular market share (based on the number of subscribers)
at the end of Q3 2014 was estimated to be approximately 29%, unchanged
from the end of Q2 2014.
The monthly Average Revenue per User ("ARPU") for cellular
subscribers in Q3 2014 was NIS 76 (US$ 21), a decrease of 10% from NIS
84 in Q3 2013 and unchanged from Q2 2014. The decrease in ARPU compared
to the comparable quarter last year mainly reflects the continued price
erosion due to the intense competition in the market, as described above.
Funding and Investing Review
In Q3 2014, cash flow generated from operating activities before
interest payments, net of cash flow used for investing activities ("Free
Cash Flow"), totaled NIS 112 million (US$ 30 million), a decrease of
59% from NIS 273 million in Q3 2013.
Cash generated from operations decreased by 39% to NIS 242
million (US$ 65 million) in Q3 2014 from NIS 399 million in Q3 2013.
This was mainly explained by changes in operating working capital,
partially offset by the increase in profit. The decrease in operating
working capital in Q3 2014 was NIS 9 million, compared with a decrease
of NIS 143 million in Q3 2013.
The level of cash capital expenditures in fixed assets ('CAPEX')
including intangible assets but excluding capitalized subscriber
acquisition and retention costs, net, was NIS 128 million
(US$ 35 million) in Q3 2014, an increase of 10% from NIS 116 million in
Q3 2013.
Net debt at the end of Q3 2014 amounted to NIS 2,637 million (US$
714 million), compared with NIS 3,208 million at the end of Q3 2013, a
decrease of NIS 571 million.
Business and Regulatory Developments
Business Developments
Allocation of Options and Restricted Shares to
the Company's Office Holders and Employees
On November 11, 2014, the Company approved the allocation of 754,600
options and 320,430 restricted shares for the Company's office holders
(excluding the CEO) and other employees, all in accordance with the
Company's Equity Incentive Plan, as amended.
The vesting of the options and the earning of the restricted shares are
subject to vesting / restriction period of four years from the grant
date (one third of the options / restricted shares granted will be
vested / earned after two years, one third after three years and one
third after four years). The vesting of the options and the earning of
the restricted shares are also subject to performance conditions set by
the Company's organs.
The options were granted at an exercise price of NIS 25.95 per share
(the average closing price of the Company's share during the thirty
trading days on the Tel-Aviv Stock Exchange preceding the grant date).
For further information regarding the amendments to the Company's Equity
Incentive Plan, please see the Company's press release and immediate
report (on Form 6-K) dated August 13, 2014 under "Business and
Regulatory Developments" at: http://maya.tase.co.il/bursa/report.asp?report_cd=914271
or at: https://www.sec.gov/Archives/edgar/data/1096691/000117891314002651/0001178913-14-002651-index.htm.
Regulatory Developments
1.
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Postponement of the 4G Tender Submission Date by the Tender
Committee
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As previously communicated by Partner in its press release dated
October 22, 2014, the tender committee appointed in connection
with the 4G frequencies tender (the "Tender"), postponed the date
for submitting basic proposals to participate in the Tender to
November 13, 2014. Partner believes that the tender committee's
decision was motivated in part by regulatory issues that may be
raised regarding cross-ownership within the Israeli
telecommunications industry, including among Partner's "Israeli
Entities".
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In the same press release, Partner also announced that the Israel
Securities Authority (the "ISA") notified the Company, in reply to
a preliminary application by the Company to the ISA, that it is
not expressing a position regarding the validity of the agreement
between the Israeli Entities in Partner ("the Agreement") and/or
with respect to its application to any of the current Israeli
Entities, however its position is that the arrangement to appoint
a director on behalf of the Israeli Entities that is included in
the Agreement constitutes a joint holding of the Company's shares
by the parties to the Agreement between themselves. As noted in
the said press release, the Company's position is that the
arrangement (included in the Agreement) is not valid and the
Company does not give effect to the arrangement regarding the
appointment of the Israeli director.
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For the reasons presented in the Company's press release dated
October 22, 2014, and in light of the recent developments according
to which, among others, the Israeli Entities are taking action to
remove Hot Net Internet Services Ltd. and additional Israeli
Entities from the Agreement and the convening of a general meeting
by Partner to update the procedure for appointment of the director
on behalf of the Israeli Entities set forth in Partner's Articles of
Association, the Company does not expect that any of these
developments will have a material adverse impact on the Company's
business.
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2.
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Ministry of Communications Hearings and Decisions
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a)
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Hearing regarding Filtering of Offensive Websites and Content
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On August 6, 2014, the Ministry of Communications (the "MOC")
published a hearing regarding proposed amendments to
telecommunications licenses granted to various operators, including
the Company and its subsidiaries.
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According to the Communications Law (Telecommunications and
Broadcasting, 1982) (the "Law"), ISP and cellular licensees are
required to provide a service for filtering of offensive websites
and content at no additional cost to the subscriber. The Law also
includes provisions which oblige said licensees to inform their
subscribers of the dangers of internet use (including offensive
websites and content).
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As part of the hearing, it is proposed to amend the ISP and cellular
licenses to include additional requirements to the existing
requirements described above.
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The proposed amendments include, among others, the following
matters: (1) detailed specifications of the filtering service; (2)
requirements regarding the informational leaflet to be provided to
the subscriber; and (3) an obligation to offer filtering software to
be installed on any type of terminal equipment.
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On October 18, 2014, Partner filed its written position seeking to
limit the impact of the proposed amendments. At this stage, the
Company is unable to evaluate the scope of investments and expenses
required in order to comply with the proposed amendments.
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b)
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Secondary Hearing - Schejter Committee
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As previously reported by the Company, the Minister of
Communications appointed Prof. Amit Schejter to head a committee
tasked with drafting recommendations regarding the regulation of
audio visual content transmitted over the internet and the
introduction of new service providers. Partner filed its written
position with the committee on April 24, 2014.
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On August 13, 2014, the committee published an interim report and a
questionnaire.
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In its interim report the committee proposed, among others things,
that new audio visual services (provided over the Internet) would
not be subject to the regulatory regime applicable to multi-channel
television licensees, for an unspecified interim period. After such
(unspecified) interim period, regulatory provisions would be
gradually applied to audio visual services (provided over the
Internet) in accordance with their level of income or number of
subscribers.
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In its questionnaire the committee raised various questions,
including: (1) the level of income or number of subscribers which
would warrant regulation of new audio visual services (provided over
the Internet); (2) whether the broadcasting licensees should be
obligated to sell the channels that they broadcast to the new
service providers (Must Sell).
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In addition, the committee is examining the application of certain
"new entrant" protections to new audio visual service suppliers
(provided over the Internet). If the committee decides not to
recommend such protections, then Partner may not be able to
penetrate this market and to successfully launch its TV services.
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c)
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Secondary Hearing - International Calls Market
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As previously reported by the Company, in October 2013, the MOC
published a hearing regarding new regulation of the international
call market. In this hearing, it was proposed by the MOC to allow
all general licensees (including MVNOs) to provide international
call services to their subscribers, with respect to the
international destinations which are included in the subscriber's
tariff plan and to international destinations for which the tariff
is lower or equal to the tariff of a call on the licensee's network
("Included Destinations"). In this hearing, the MOC also proposed
that the general licensees (such as cellular operators) would not be
allowed to collect an interconnect fee for outgoing international
calls.
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On October 20, 2014, the MOC published a secondary hearing on this
matter, in which it proposed that all outgoing international calls
which are not to Included Destinations, shall be preceded with a
voice message stating the tariff of such call and allowing the
subscriber to disconnect without being charged. The revenues of the
Company may be adversely affected if the proposals made at these
hearings are adopted.
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Conference Call Details
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Partner will hold a conference call on Wednesday, November 12, 2014
at 10.00 a.m. Eastern Time / 5.00 p.m. Israel Time.
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To join the call, please dial the following numbers (at least 10
minutes before the scheduled time):
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International: +972.3.918.0609
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North America toll-free: +1.888.668.9141
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A live webcast of the call will also be available on Partner's
Investors Relations website at: www.orange.co.il/en/Investors-Relations/lobby/
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If you are unavailable to join live, the replay of the call will be
available from November 12, 2014 until November 19, 2014, at the
following numbers:
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International: +972.3.925.5927
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North America toll-free: +1.888.326.9310
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In addition, the archived webcast of the call will be available on
Partner's Investor Relations website at the above address for
approximately three months.
|
Forward-looking statements
This press release includes forward-looking statements within the
meaning of Section 27A of the US Securities Act of 1933, as amended,
Section 21E of the US Securities Exchange Act of 1934, as amended, and
the safe harbor provisions of the US Private Securities Litigation
Reform Act of 1995. Words such as "believe", "anticipate", "expect",
"intend", "seek", "will", "plan", "could", "may", "project", "goal",
"target" and similar expressions often identify forward-looking
statements but are not the only way we identify these statements. In
particular, this press release contains forward-looking statements
regarding the anticipated offering by the Company of 4G services, and
expected changes in the regulatory environment. In addition, all
statements other than statements of historical fact included in this
press release regarding our future performance, plans to increase
revenues or margins or preserve or expand market share in existing or
new markets, plans to reduce expenses, and any statements regarding
other future events or our future prospects, are forward-looking
statements.
We have based these forward-looking statements on our current
knowledge and our present beliefs and expectations regarding possible
future events. These forward-looking statements are subject to risks,
uncertainties and assumptions about recent and future regulatory actions
(specifically, whether the regulatory changes will occur and what their
impact on Partner will be), as well as consumer habits and preferences
in cellular telephone usage, trends in the Israeli telecommunications
industry in general, and the impact of global economic conditions.
Future results may differ materially from those anticipated herein. For
further information regarding risks, uncertainties and assumptions about
Partner, trends in the Israeli telecommunications industry in general,
the impact of current global economic conditions and possible regulatory
and legal developments, and other risks we face, see "Item 3. Key
Information - 3D. Risk Factors", "Item 4. Information
on the Company", "Item 5. Operating and
Financial Review and Prospects", "Item 8.
Financial Information - 8A. Consolidated Financial Statements and Other
Financial Information - 8A.1 Legal and Administrative Proceedings" and
"Item 11. Quantitative and Qualitative Disclosures about Market Risk" in
the Company's Annual Reports on Form 20-F filed with the SEC, as well as
its current reports on Form 6-K furnished to the SEC. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
The financial results presented in this press release are
unaudited financial results.
|
The results were prepared in accordance with IFRS, other than
Adjusted EBITDA and free cash flow, which are non-GAAP financial
measures.
|
The financial information is presented in NIS millions (unless
otherwise stated) and the figures presented are rounded
accordingly.
|
|
The convenience translations of the New Israeli Shekel (NIS)
figures into US Dollars were made at the rate of exchange
prevailing at September 30, 2014: US $1.00 equals NIS 3.695. The
translations were made purely for the convenience of the reader.
|
Use of Non-GAAP Financial Measures
'Adjusted EBITDA' represents earnings before interest (finance costs,
net), taxes, depreciation, amortization (including amortization of
intangible assets, deferred expenses-right of use, and share based
compensation expenses) and impairment charges, as a measure of operating
profit. Adjusted EBITDA is not a financial measure under IFRS and may
not be comparable to other similarly titled measures provided by other
companies. Adjusted EBITDA may not be indicative of the Company's
historic operating results nor is it meant to be predictive of potential
future results. Adjusted EBITDA is presented solely to enhance the
understanding of our operating results. We use the term "Adjusted
EBITDA" to highlight the fact that amortization includes amortization of
deferred expenses - right of use and employee share-based compensation
expenses, but Adjusted EBITDA is fully comparable to EBITDA information
which has been previously provided by Partner for prior periods.
Reconciliation between our net cash flow from operating activities and
Adjusted EBITDA on a consolidated basis is presented in the attached
summary financial results.
About Partner Communications
Partner Communications Company Ltd. ("Partner") is a leading Israeli
provider of telecommunications services (cellular, fixed-line telephony
and internet services) under the orange™ brand and the 012 Smile brand.
Partner's ADSs are quoted on the NASDAQ Global Select Market™ and its
shares are traded on the Tel Aviv Stock Exchange (NASDAQ and TASE:PTNR).
For more information about Partner, see: www.orange.co.il/en/Investors-Relations/lobby/
|
|
|
|
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
|
|
|
New Israeli shekels
|
|
|
Convenience translation into U.S.
dollars
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
September 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
(Unaudited)
|
|
|
|
|
In millions
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
749
|
|
|
481
|
|
|
203
|
|
|
Trade receivables
|
|
856
|
|
|
1,051
|
|
|
232
|
|
|
Other receivables and prepaid expenses
|
|
46
|
|
|
45
|
|
|
12
|
|
|
Deferred expenses- right of use
|
|
32
|
|
|
28
|
|
|
8
|
|
|
Inventories
|
|
110
|
|
|
93
|
|
|
30
|
|
|
Income tax receivable
|
|
4
|
|
|
3
|
|
|
1
|
|
|
Derivative financial instruments
|
|
|
|
|
2
|
|
|
|
|
|
|
|
1,797
|
|
|
1,703
|
|
|
486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
Trade Receivables
|
|
373
|
|
|
289
|
|
|
101
|
|
|
Deferred expenses- right of use
|
|
100
|
|
|
118
|
|
|
27
|
|
|
Property and equipment
|
|
1,655
|
|
|
1,791
|
|
|
448
|
|
|
Licenses and other intangible assets
|
|
1,103
|
|
|
1,167
|
|
|
298
|
|
|
Goodwill
|
|
407
|
|
|
407
|
|
|
110
|
|
|
Prepaid expenses
|
|
3
|
|
|
|
|
|
1
|
|
|
Deferred income tax asset
|
|
15
|
|
|
12
|
|
|
4
|
|
|
|
|
3,656
|
|
|
3,784
|
|
|
989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
5,453
|
|
|
5,487
|
|
|
1,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
|
|
|
New Israeli shekels
|
|
|
Convenience translation into U.S.
dollars
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
September 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
(Unaudited)
|
|
|
|
|
In millions
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
Current maturities of notes payable and bank borrowings
|
|
309
|
|
|
334
|
|
|
84
|
|
|
Trade payables
|
|
682
|
|
|
761
|
|
|
185
|
|
|
Payables in respect of employees
|
|
81
|
|
|
98
|
|
|
22
|
|
|
Other payables (mainly institutions)
|
|
54
|
|
|
45
|
|
|
14
|
|
|
Deferred revenue
|
|
35
|
|
|
37
|
|
|
9
|
|
|
Provisions
|
|
63
|
|
|
67
|
|
|
17
|
|
|
Income tax payable
|
|
38
|
|
|
31
|
|
|
10
|
|
|
Derivative financial instruments
|
|
3
|
|
|
1
|
|
|
1
|
|
|
|
|
1,265
|
|
|
1,374
|
|
|
342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
Notes payable
|
|
2,042
|
|
|
2,038
|
|
|
553
|
|
|
Bank borrowings
|
|
1,035
|
|
|
1,109
|
|
|
280
|
|
|
Liability for employee rights upon retirement, net
|
|
43
|
|
|
45
|
|
|
12
|
|
|
Dismantling and restoring sites obligation
|
|
34
|
|
|
31
|
|
|
8
|
|
|
Other non-current liabilities
|
|
16
|
|
|
16
|
|
|
4
|
|
|
Deferred tax liability
|
|
2
|
|
|
*
|
|
|
1
|
|
|
|
|
3,172
|
|
|
3,239
|
|
|
858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
4,437
|
|
|
4,613
|
|
|
1,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
|
Share capital - ordinary shares of NIS 0.01
|
|
|
|
|
|
|
|
|
|
par value: authorized - December 31, 2013,
|
|
|
|
|
|
|
|
|
|
and September 30, 2014 - 235,000,000 shares;
|
|
|
|
|
|
|
|
|
|
issued and outstanding -
|
2
|
|
|
2
|
|
|
1
|
|
|
December 31, 2013 - **155,687,002 shares
|
|
|
|
|
|
|
|
|
|
|
September 30, 2014 - **155,958,859 shares
|
|
|
|
|
|
|
|
|
|
|
Capital surplus
|
|
1,100
|
|
|
1,100
|
|
|
297
|
|
|
Accumulated retained earnings
|
|
265
|
|
|
123
|
|
|
72
|
|
|
Treasury shares, at cost - December
|
|
|
|
|
|
|
|
|
|
|
31, 2013 and September 30, 2014 - 4,467,990
|
|
|
|
|
|
|
|
|
|
|
shares
|
|
(351)
|
|
|
(351)
|
|
|
(95)
|
|
|
TOTAL EQUITY
|
|
1,016
|
|
|
874
|
|
|
275
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
5,453
|
|
|
5,487
|
|
|
1,475
|
|
|
|
|
|
|
|
|
|
|
|
|
* Representing an amount less than 1 million
** Net of treasury shares
|
|
|
|
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
New Israeli shekels
|
|
|
Convenience translation into U.S. dollars
|
|
|
|
9 month period ended September 30
|
|
|
3 month period ended September 30
|
|
|
9 month period ended September 30,
|
|
|
3 month period ended September 30,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2014
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
In millions (except per share data)
|
|
|
Revenues, net
|
3,292
|
|
|
3,392
|
|
|
1,102
|
|
|
1,118
|
|
|
891
|
|
|
254
|
|
|
Cost of revenues
|
2,523
|
|
|
2,640
|
|
|
850
|
|
|
861
|
|
|
683
|
|
|
196
|
|
|
Gross profit
|
769
|
|
|
752
|
|
|
252
|
|
|
257
|
|
|
208
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing expenses
|
335
|
|
|
348
|
|
|
108
|
|
|
113
|
|
|
91
|
|
|
25
|
|
|
General and administrative
expenses
|
147
|
|
|
161
|
|
|
47
|
|
|
54
|
|
|
40
|
|
|
11
|
|
|
Other income, net
|
40
|
|
|
63
|
|
|
13
|
|
|
19
|
|
|
11
|
|
|
3
|
|
|
Operating profit
|
327
|
|
|
306
|
|
|
110
|
|
|
109
|
|
|
88
|
|
|
25
|
|
|
Finance income
|
2
|
|
|
23
|
|
|
1
|
|
|
17
|
|
|
1
|
|
|
*
|
|
|
Finance expenses
|
125
|
|
|
196
|
|
|
51
|
|
|
70
|
|
|
34
|
|
|
12
|
|
|
Finance costs, net
|
123
|
|
|
173
|
|
|
50
|
|
|
53
|
|
|
33
|
|
|
12
|
|
|
Profit before income tax
|
204
|
|
|
133
|
|
|
60
|
|
|
56
|
|
|
55
|
|
|
13
|
|
|
Income tax expenses
|
66
|
|
|
44
|
|
|
20
|
|
|
18
|
|
|
18
|
|
|
5
|
|
|
Profit for the period
|
138
|
|
|
89
|
|
|
40
|
|
|
38
|
|
|
37
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
0.89
|
|
|
0.57
|
|
|
0.26
|
|
|
0.24
|
|
|
0.24
|
|
|
0.07
|
|
|
Diluted
|
0.88
|
|
|
0.57
|
|
|
0.26
|
|
|
0.24
|
|
|
0.24
|
|
|
0.07
|
|
|
Weighted average number of shares outstanding (in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
155,726
|
|
|
155,651
|
|
|
155,794
|
|
|
155,659
|
|
|
155,726
|
|
|
155,794
|
|
|
Diluted
|
156,349
|
|
|
156,120
|
|
|
156,362
|
|
|
156,213
|
|
|
156,349
|
|
|
156,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
|
|
|
|
|
|
New Israeli shekels
|
|
|
Convenience translation into U.S. dollars
|
|
|
|
|
|
9 month period ended September 30,
|
|
|
3 month period ended September 30,
|
|
|
9 month period ended September 30,
|
|
|
3 month period ended September 30,
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2014
|
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
In millions
|
|
|
Profit for the period
|
|
|
138
|
|
|
89
|
|
|
40
|
|
|
38
|
|
|
37
|
|
|
8
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for the period, net of income tax
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FOR THE PERIOD
|
|
|
138
|
|
|
89
|
|
|
40
|
|
|
38
|
|
|
37
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
SEGMENT INFORMATION
|
|
|
|
|
|
|
New Israeli Shekels
|
|
|
New Israeli Shekels
|
|
|
|
Nine month period ended September 30, 2014
|
|
|
Nine month period ended September 30, 2013
|
|
|
|
In millions (Unaudited)
|
|
|
In millions (Unaudited)
|
|
|
|
Cellular segment
|
|
Fixed line segment
|
|
Reconciliation
for
consolidation
|
|
Consolidated
|
|
|
Cellular segment
|
|
Fixed line segment
|
|
Reconciliation
for
consolidation
|
|
Consolidated
|
|
|
Segment revenue - Services
|
1,985
|
|
615
|
|
|
|
2,600
|
|
|
2,165
|
|
697
|
|
|
|
2,862
|
|
|
Inter-segment revenue - Services
|
20
|
|
139
|
|
(159)
|
|
|
|
|
23
|
|
130
|
|
(153)
|
|
|
|
|
Segment revenue - Equipment
|
656
|
|
36
|
|
|
|
692
|
|
|
507
|
|
23
|
|
|
|
530
|
|
|
Total revenues
|
2,661
|
|
790
|
|
(159)
|
|
3,292
|
|
|
2,695
|
|
850
|
|
(153)
|
|
3,392
|
|
|
Segment cost of revenues - Services
|
1,475
|
|
523
|
|
|
|
1,998
|
|
|
1,564
|
|
569
|
|
|
|
2,133
|
|
|
Inter-segment cost of revenues - Services
|
137
|
|
22
|
|
(159)
|
|
|
|
|
127
|
|
26
|
|
(153)
|
|
|
|
|
Segment cost of revenues - Equipment
|
500
|
|
25
|
|
|
|
525
|
|
|
485
|
|
22
|
|
|
|
507
|
|
|
Cost of revenues
|
2,112
|
|
570
|
|
(159)
|
|
2,523
|
|
|
2,176
|
|
617
|
|
(153)
|
|
2,640
|
|
|
Gross profit
|
549
|
|
220
|
|
|
|
769
|
|
|
519
|
|
233
|
|
|
|
752
|
|
|
Operating expenses
|
389
|
|
93
|
|
|
|
482
|
|
|
406
|
|
103
|
|
|
|
509
|
|
|
Other income, net
|
38
|
|
2
|
|
|
|
40
|
|
|
62
|
|
1
|
|
|
|
63
|
|
|
Operating profit
|
198
|
|
129
|
|
|
|
327
|
|
|
175
|
|
131
|
|
|
|
306
|
|
|
Adjustments to presentation of Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Depreciation and amortization
|
400
|
|
117
|
|
|
|
517
|
|
|
405
|
|
116
|
|
|
|
521
|
|
|
-Other (1)
|
3
|
|
|
|
|
|
3
|
|
|
5
|
|
|
|
|
|
5
|
|
|
Adjusted EBITDA (2)
|
601
|
|
246
|
|
|
|
847
|
|
|
585
|
|
247
|
|
|
|
832
|
|
|
Reconciliation of Adjusted EBITDA to profit before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Depreciation and amortization
|
|
|
|
|
|
|
517
|
|
|
|
|
|
|
|
|
521
|
|
|
-Finance costs, net
|
|
|
|
|
|
|
123
|
|
|
|
|
|
|
|
|
173
|
|
|
-Other (1)
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
5
|
|
|
Profit before income tax
|
|
|
|
|
|
|
204
|
|
|
|
|
|
|
|
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
SEGMENT INFORMATION
|
|
|
|
|
|
|
|
|
|
|
New Israeli Shekels
|
|
|
New Israeli Shekels
|
|
|
|
Three month period ended September 30, 2014
|
|
|
Three month period ended September 30, 2013
|
|
|
|
In millions (Unaudited)
|
|
|
In millions (Unaudited)
|
|
|
|
Cellular segment
|
|
Fixed line segment
|
|
Reconciliation
for
consolidation
|
|
Consolidated
|
|
|
Cellular segment
|
|
Fixed line segment
|
|
Reconciliation
for
consolidation
|
|
Consolidated
|
|
|
Segment revenue - Services
|
652
|
|
210
|
|
|
|
862
|
|
|
730
|
|
221
|
|
|
|
951
|
|
|
Inter-segment revenue - Services
|
6
|
|
49
|
|
(55)
|
|
|
|
|
8
|
|
46
|
|
(54)
|
|
|
|
|
Segment revenue - Equipment
|
218
|
|
22
|
|
|
|
240
|
|
|
160
|
|
7
|
|
|
|
167
|
|
|
Total revenues
|
876
|
|
281
|
|
(55)
|
|
1,102
|
|
|
898
|
|
274
|
|
(54)
|
|
1,118
|
|
|
Segment cost of revenues - Services
|
495
|
|
179
|
|
|
|
674
|
|
|
522
|
|
182
|
|
|
|
704
|
|
|
Inter-segment cost of revenues - Services
|
48
|
|
7
|
|
(55)
|
|
|
|
|
45
|
|
9
|
|
(54)
|
|
|
|
|
Segment cost of revenues - Equipment
|
161
|
|
15
|
|
|
|
176
|
|
|
151
|
|
6
|
|
|
|
157
|
|
|
Cost of revenues
|
704
|
|
201
|
|
(55)
|
|
850
|
|
|
718
|
|
197
|
|
(54)
|
|
861
|
|
|
Gross profit
|
172
|
|
80
|
|
|
|
252
|
|
|
180
|
|
77
|
|
|
|
257
|
|
|
Operating expenses
|
127
|
|
28
|
|
|
|
155
|
|
|
135
|
|
32
|
|
|
|
167
|
|
|
Other income, net
|
12
|
|
1
|
|
|
|
13
|
|
|
19
|
|
|
|
|
|
19
|
|
|
Operating profit
|
57
|
|
53
|
|
|
|
110
|
|
|
64
|
|
45
|
|
|
|
109
|
|
|
Adjustments to presentation of Adjusted BITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Depreciation and amortization
|
133
|
|
38
|
|
|
|
171
|
|
|
136
|
|
38
|
|
|
|
174
|
|
|
-Other (1)
|
1
|
|
*
|
|
|
|
1
|
|
|
1
|
|
|
|
|
|
1
|
|
|
Adjusted EBITDA (2)
|
191
|
|
91
|
|
|
|
282
|
|
|
201
|
|
83
|
|
|
|
284
|
|
|
Reconciliation of Adjusted EBITDA to profit before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Depreciation and amortization
|
|
|
|
|
|
|
171
|
|
|
|
|
|
|
|
|
174
|
|
|
-Finance costs, net
|
|
|
|
|
|
|
50
|
|
|
|
|
|
|
|
|
53
|
|
|
-Other (1)
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
1
|
|
|
Profit before income tax
|
|
|
|
|
|
|
60
|
|
|
|
|
|
|
|
|
56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Representing an amount less than 1 million.
|
|
(1)
|
|
Mainly employee share based compensation expenses.
|
|
(2)
|
|
Adjusted EBITDA as reviewed by the CODM, represents Earnings Before
Interest (finance costs, net), Taxes, Depreciation, Amortization
(including amortization of intangible assets, deferred
expenses-right of use, and share based compensation expenses) and
impairment charges, as a measure of segment profit. Adjusted EBITDA
is not a financial measure under IFRS and may not be comparable to
other similarly titled measures in other companies. Adjusted EBITDA
may not be indicative of the Group's historic operating results nor
is it meant to be predictive of potential future results. The usage
of the term "Adjusted EBITDA" is to highlight the fact that the
Amortization includes amortization of deferred expenses - right of
use and employee share based compensation expenses; it is fully
comparable to EBITDA information which has been previously provided
for prior periods.
|
|
|
|
|
|
|
|
|
|
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
New Israeli shekels
|
|
|
Convenience translation into U.S. dollars
|
|
|
|
9 month period ended September 30,
|
|
|
3 month period ended September 30,
|
|
|
9 month period ended September 30,
|
|
|
3 month period ended September 30,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2014
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
In millions
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations (Appendix A)
|
851
|
|
|
1,152
|
|
|
262
|
|
|
407
|
|
|
231
|
|
|
70
|
|
|
Income tax paid
|
(61)
|
|
|
(2)
|
|
|
(20)
|
|
|
(8)
|
|
|
(17)
|
|
|
(5)
|
|
|
Net cash provided by operating activities
|
790
|
|
|
1,150
|
|
|
242
|
|
|
399
|
|
|
214
|
|
|
65
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment
|
(228)
|
|
|
(256)
|
|
|
(90)
|
|
|
(76)
|
|
|
(61)
|
|
|
(24)
|
|
|
Acquisition of intangible assets
|
(114)
|
|
|
(117)
|
|
|
(39)
|
|
|
(41)
|
|
|
(31)
|
|
|
(11)
|
|
|
Interest received
|
3
|
|
|
7
|
|
|
|
|
|
2
|
|
|
1
|
|
|
|
|
|
Consideration received from sales of property and equipment
|
*
|
|
|
1
|
|
|
*
|
|
|
1
|
|
|
*
|
|
|
*
|
|
|
Payments for derivative financial instruments, net
|
(2)
|
|
|
(22)
|
|
|
(1)
|
|
|
(12)
|
|
|
(1)
|
|
|
*
|
|
|
Net cash used in investing activities
|
(341)
|
|
|
(387)
|
|
|
(130)
|
|
|
(126)
|
|
|
(92)
|
|
|
(35)
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of finance lease
|
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
(81)
|
|
|
(112)
|
|
|
(6)
|
|
|
(7)
|
|
|
(22)
|
|
|
(2)
|
|
|
Repayment of non-current bank borrowings
|
(100)
|
|
|
(419)
|
|
|
|
|
|
|
|
|
(27)
|
|
|
|
|
|
Net cash used in financing activities
|
(181)
|
|
|
(532)
|
|
|
(6)
|
|
|
(7)
|
|
|
(49)
|
|
|
(2)
|
|
|
INCREASE IN CASH AND CASH EQUIVALENTS
|
268
|
|
|
231
|
|
|
106
|
|
|
266
|
|
|
73
|
|
|
28
|
|
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
481
|
|
|
548
|
|
|
643
|
|
|
513
|
|
|
130
|
|
|
175
|
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
749
|
|
|
779
|
|
|
749
|
|
|
779
|
|
|
203
|
|
|
203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTNER COMMUNICATIONS COMPANY LTD.
|
|
|
(An Israeli Corporation)
|
|
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Appendix A - Cash generated from operations and supplemental
information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Israeli shekels
|
|
|
Convenience translation into U.S. dollars
|
|
|
|
|
|
9 month period ended September 30,
|
|
|
3 month period ended September 30,
|
|
|
9 month period ended September 30,
|
|
|
3 month period ended September 30,
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2014
|
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
In millions
|
|
|
Cash generated from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
138
|
|
|
89
|
|
|
40
|
|
|
38
|
|
|
37
|
|
|
11
|
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
489
|
|
|
499
|
|
|
161
|
|
|
166
|
|
|
132
|
|
|
44
|
|
|
Amortization of deferred expenses - Right of use
|
|
|
28
|
|
|
23
|
|
|
10
|
|
|
8
|
|
|
8
|
|
|
3
|
|
|
Employee share based compensation expenses
|
|
|
4
|
|
|
5
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
Liability for employee rights upon retirement, net
|
|
|
(2)
|
|
|
(3)
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
|
|
Finance costs, net
|
|
|
6
|
|
|
46
|
|
|
7
|
|
|
28
|
|
|
2
|
|
|
2
|
|
|
Gain (loss) from change in fair value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
derivative financial instruments
|
|
|
5
|
|
|
14
|
|
|
5
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
Interest paid
|
|
|
81
|
|
|
112
|
|
|
6
|
|
|
7
|
|
|
22
|
|
|
2
|
|
|
Interest received
|
|
|
(3)
|
|
|
(7)
|
|
|
|
|
|
(2)
|
|
|
(1)
|
|
|
|
|
|
Deferred income taxes
|
|
|
(1)
|
|
|
15
|
|
|
2
|
|
|
10
|
|
|
*
|
|
|
1
|
|
|
Income tax paid
|
|
|
61
|
|
|
2
|
|
|
20
|
|
|
8
|
|
|
17
|
|
|
5
|
|
|
Capital loss from property and equipment
|
|
|
*
|
|
|
(1)
|
|
|
*
|
|
|
(1)
|
|
|
*
|
|
|
*
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in accounts receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
|
111
|
|
|
430
|
|
|
53
|
|
|
130
|
|
|
30
|
|
|
13
|
|
|
Other
|
|
|
(4)
|
|
|
(3)
|
|
|
6
|
|
|
5
|
|
|
(1)
|
|
|
2
|
|
|
Increase (decrease) in accounts payable and accruals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
|
(25)
|
|
|
(93)
|
|
|
(38)
|
|
|
(24)
|
|
|
(7)
|
|
|
(10)
|
|
|
Other payables
|
|
|
(7)
|
|
|
(6)
|
|
|
15
|
|
|
17
|
|
|
(2)
|
|
|
4
|
|
|
Provisions
|
|
|
(4)
|
|
|
5
|
|
|
(2)
|
|
|
|
|
|
(1)
|
|
|
(1)
|
|
|
Deferred revenue
|
|
|
(2)
|
|
|
(2)
|
|
|
(6)
|
|
|
(2)
|
|
|
(1)
|
|
|
(2)
|
|
|
Increase in deferred expenses - Right of use
|
|
|
(14)
|
|
|
(13)
|
|
|
(6)
|
|
|
(4)
|
|
|
(4)
|
|
|
(2)
|
|
|
Current income tax liability
|
|
|
7
|
|
|
27
|
|
|
(2)
|
|
|
|
|
|
2
|
|
|
(1)
|
|
|
Decrease (increase) in inventories
|
|
|
(17)
|
|
|
13
|
|
|
(11)
|
|
|
21
|
|
|
(4)
|
|
|
(3)
|
|
|
Cash generated from operations
|
|
|
851
|
|
|
1,152
|
|
|
262
|
|
|
407
|
|
|
231
|
|
|
70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Representing an amount of less than 1 million.
At September 30, 2014 and 2013, trade and other payables include NIS 160
million ($43 million) and NIS 177 million, respectively, in respect of
acquisition of intangible assets and property and equipment.
|
|
|
|
|
|
|
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
RECONCILIATION BETWEEN OPERATING CASH FLOWS AND ADJUSTED EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
New Israeli shekels
|
|
Convenience translation into U.S. dollars**
|
|
|
|
|
9 month period ended September 30,
|
|
3 month period ended September 30,
|
|
9 month period ended September 30,
|
|
3 month period ended September 30,
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2014
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
In millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
790
|
|
1,150
|
|
242
|
|
399
|
|
214
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liability for employee rights upon retirement
|
|
|
2
|
|
3
|
|
|
|
|
|
1
|
|
|
|
Accrued interest and exchange and linkage differences on long-term
liabilities
|
|
|
(79)
|
|
(147)
|
|
(11)
|
|
(32)
|
|
(22)
|
|
(3)
|
|
Increase (decrease) in accounts receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
|
(111)
|
|
(430)
|
|
(53)
|
|
(130)
|
|
(30)
|
|
(14)
|
|
Other, including derivative financial instruments
|
|
|
14
|
|
3
|
|
(4)
|
|
|
|
3
|
|
(1)
|
|
Decrease (increase) in accounts payable and accruals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
|
25
|
|
93
|
|
38
|
|
24
|
|
7
|
|
10
|
|
Other
|
|
|
10
|
|
3
|
|
(9)
|
|
(16)
|
|
3
|
|
(2)
|
|
Income tax paid
|
|
|
61
|
|
2
|
|
20
|
|
8
|
|
17
|
|
5
|
|
Increase (decrease) in inventories
|
|
|
17
|
|
(13)
|
|
11
|
|
(21)
|
|
4
|
|
3
|
|
Increase (decrease) in assets retirement obligation
|
|
|
(1)
|
|
(1)
|
|
|
|
|
|
*
|
|
|
|
Financial expenses***
|
|
|
119
|
|
169
|
|
48
|
|
52
|
|
32
|
|
13
|
|
Adjusted EBITDA
|
|
|
847
|
|
832
|
|
282
|
|
284
|
|
229
|
|
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Representing an amount of less than 1 million.
** The convenience translation of the New Israeli Shekel (NIS) figures
into US dollars was made at the exchange prevailing at September 30,
2014: US $1.00 equals 3.695 NIS.
*** Financial expenses excluding any charge for the amortization of
pre-launch financial costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Financial and Operating Indicators
(unaudited)7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NIS M unless otherwise stated
|
|
Q3' 12
|
|
|
Q4' 12
|
|
|
Q1' 13
|
|
|
Q2' 13
|
|
|
Q3' 13
|
|
|
Q4' 13
|
|
|
Q1' 14
|
|
|
Q2' 14
|
|
|
Q3' 14
|
|
|
|
2012
|
|
2013
|
|
|
Cellular Segment Service Revenues
|
|
892
|
|
|
788
|
|
|
724
|
|
|
726
|
|
|
738
|
|
|
719
|
|
|
680
|
|
|
667
|
|
|
658
|
|
|
|
3,592
|
|
2,907
|
|
|
Cellular Segment Equipment Revenues
|
|
157
|
|
|
209
|
|
|
176
|
|
|
171
|
|
|
160
|
|
|
196
|
|
|
220
|
|
|
218
|
|
|
218
|
|
|
|
896
|
|
703
|
|
|
Fixed Line Segment Service Revenues
|
|
296
|
|
|
294
|
|
|
283
|
|
|
277
|
|
|
267
|
|
|
258
|
|
|
247
|
|
|
248
|
|
|
259
|
|
|
|
1,210
|
|
1,085
|
|
|
Fixed Line Segment Equipment Revenues
|
|
8
|
|
|
13
|
|
|
7
|
|
|
9
|
|
|
7
|
|
|
9
|
|
|
7
|
|
|
7
|
|
|
22
|
|
|
|
36
|
|
32
|
|
|
Reconciliation for consolidation
|
|
-38
|
|
|
-46
|
|
|
-46
|
|
|
-53
|
|
|
-54
|
|
|
-55
|
|
|
-51
|
|
|
-53
|
|
|
-55
|
|
|
|
-162
|
|
-208
|
|
|
Total Revenues
|
|
1,315
|
|
|
1,258
|
|
|
1,144
|
|
|
1,130
|
|
|
1,118
|
|
|
1,127
|
|
|
1,103
|
|
|
1,087
|
|
|
1,102
|
|
|
|
5,572
|
|
4,519
|
|
|
Gross Profit from Equipment Sales
|
|
16
|
|
|
22
|
|
|
4
|
|
|
9
|
|
|
10
|
|
|
19
|
|
|
45
|
|
|
58
|
|
|
64
|
|
|
|
113
|
|
42
|
|
|
Operating Profit
|
|
217
|
|
|
155
|
|
|
95
|
|
|
102
|
|
|
109
|
|
|
103
|
|
|
99
|
|
|
118
|
|
|
110
|
|
|
|
865
|
|
409
|
|
|
Cellular Segment Adjusted EBITDA
|
|
328
|
|
|
256
|
|
|
186
|
|
|
198
|
|
|
201
|
|
|
199
|
|
|
199
|
|
|
211
|
|
|
191
|
|
|
|
1,314
|
|
784
|
|
|
Fixed Line Segment Adjusted EBITDA
|
|
73
|
|
|
84
|
|
|
82
|
|
|
82
|
|
|
83
|
|
|
83
|
|
|
75
|
|
|
80
|
|
|
91
|
|
|
|
288
|
|
330
|
|
|
Total Adjusted EBITDA
|
|
401
|
|
|
340
|
|
|
268
|
|
|
280
|
|
|
284
|
|
|
282
|
|
|
274
|
|
|
291
|
|
|
282
|
|
|
|
1,602
|
|
1,114
|
|
|
Adjusted EBITDA Margin (%)
|
|
30%
|
|
|
27%
|
|
|
23%
|
|
|
25%
|
|
|
25%
|
|
|
25%
|
|
|
25%
|
|
|
27%
|
|
|
26%
|
|
|
|
29%
|
|
25%
|
|
|
OPEX
|
|
793
|
|
|
744
|
|
|
720
|
|
|
700
|
|
|
696
|
|
|
675
|
|
|
661
|
|
|
642
|
|
|
657
|
|
|
|
3,262
|
|
2,791
|
|
|
Finance costs, net
|
|
68
|
|
|
38
|
|
|
49
|
|
|
71
|
|
|
53
|
|
|
38
|
|
|
24
|
|
|
49
|
|
|
50
|
|
|
|
234
|
|
211
|
|
|
Profit (Loss)
|
|
110
|
|
|
102
|
|
|
31
|
|
|
20
|
|
|
38
|
|
|
46
|
|
|
52
|
|
|
46
|
|
|
40
|
|
|
|
478
|
|
135
|
|
|
Total Dividend Declared
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
160
|
|
-
|
|
|
Capital Expenditures8
|
|
125
|
|
|
121
|
|
|
130
|
|
|
122
|
|
|
116
|
|
|
107
|
|
|
113
|
|
|
98
|
|
|
128
|
|
|
|
492
|
|
475
|
|
|
Free Cash Flow
|
|
375
|
|
|
323
|
|
|
203
|
|
|
287
|
|
|
273
|
|
|
278
|
|
|
145
|
|
|
192
|
|
|
112
|
|
|
|
1,234
|
|
1,041
|
|
|
Free Cash Flow After Interest
|
|
310
|
|
|
255
|
|
|
192
|
|
|
193
|
|
|
266
|
|
|
209
|
|
|
139
|
|
|
123
|
|
|
106
|
|
|
|
1,034
|
|
860
|
|
|
Net Debt
|
|
4,072
|
|
|
3,812
|
|
|
3,622
|
|
|
3,446
|
|
|
3,208
|
|
|
3,000
|
|
|
2,849
|
|
|
2,735
|
|
|
2,637
|
|
|
|
3,812
|
|
3,000
|
|
|
Cellular Subscriber Base (Thousands)
|
|
3,042
|
|
|
2,976
|
|
|
2,932
|
|
|
2,921
|
|
|
2,950
|
|
|
2,956
|
|
|
2,936
|
|
|
2,914
|
|
|
2,894
|
|
|
|
2,976
|
|
2,956
|
|
|
Post-Paid Subscriber Base (Thousands)
|
|
2,145
|
|
|
2,102
|
|
|
2,102
|
|
|
2,103
|
|
|
2,127
|
|
|
2,133
|
|
|
2,137
|
|
|
2,138
|
|
|
2,145
|
|
|
|
2,102
|
|
2,133
|
|
|
Pre-Paid Subscriber Base (Thousands)
|
|
897
|
|
|
874
|
|
|
830
|
|
|
818
|
|
|
823
|
|
|
823
|
|
|
799
|
|
|
776
|
|
|
749
|
|
|
|
874
|
|
823
|
|
|
Cellular ARPU (NIS)
|
|
97
|
|
|
87
|
|
|
82
|
|
|
83
|
|
|
84
|
|
|
81
|
|
|
77
|
|
|
76
|
|
|
76
|
|
|
|
97
|
|
83
|
|
|
Cellular Churn Rate (%)
|
|
10.4%
|
|
|
10.9%
|
|
|
10.4%
|
|
|
9.4%
|
|
|
8.8%
|
|
|
10.7%
|
|
|
11.6%
|
|
|
11.4%
|
|
|
12.0%
|
|
|
|
38%
|
|
39%
|
|
|
Number of Employees (FTE)
|
|
6,102
|
|
|
5,396
|
|
|
4,772
|
|
|
4,377
|
|
|
4,153
|
|
|
4,045
|
|
|
3,826
|
|
|
3,736
|
|
|
3,683
|
|
|
|
5,396
|
|
4,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 The financial results presented in this press release
are unaudited.
2 Operating expenses include cost of service revenues, and
selling, marketing & administrative expenses, and exclude depreciation
and amortization and impairment charges.
3 For definition of Adjusted EBITDA measure, see "Use of
Non-GAAP Financial Measures" below.
4 Total long term indebtedness including current
maturities less cash and cash equivalents.
5 Cash flows from operating activities before interest
payments, net of cash flows used for investment activities.
6 See also definitions in footnotes
2-5.
7 See first page for definitions. 2012 and 2013
annual numbers are audited.
8 Cash capital expenditures in fixed
assets including intangible assets but excluding capitalized subscriber
acquisition and retention cost, net.
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