· |
Total Revenues: NIS 822 million (US$ 227 million), a decrease of NIS 4 million
|
· |
Service Revenues: NIS 654 million (US$ 180 million), a decrease of 2%
|
· |
Equipment Revenues: NIS 168 million (US$ 46 million), an increase of 5%
|
· |
Total Operating Expenses (OPEX2): NIS 504 million (US$ 139 million), an increase of 6%
|
· |
Adjusted EBITDA: NIS 201 million (US$ 55 million), a decrease of 16%
|
· |
Adjusted EBITDA Margin2: 24% of total revenues compared with 29%
|
· |
Profit for the Period: NIS 26 million (US$ 7 million), a decrease of NIS 28 million
|
· |
Net Debt2: NIS 898 million (US$ 248 million), an increase of NIS 11 million
|
· |
Adjusted Free Cash Flow (before interest) 2: NIS 70 million (US$ 19 million), a decrease of NIS 132 million
|
· |
Cellular ARPU: NIS 60 (US$ 17), a decrease of 6%
|
· |
Cellular Subscriber Base: approximately 2.65 million at quarter-end, a decrease of 1%
|
· |
TV Subscriber Base: 106 thousand households at quarter-end, an increase of 92 thousand households
|
NIS Million
|
Q3’18
|
Q2’18
|
Comments
|
||||||
Service Revenues
|
654
|
620
|
The increase resulted from an increase in cellular service revenues as a result of seasonality and a one-time provision in Q2'18, as well as growth in fixed line service revenues
|
||||||
Equipment Revenues
|
168
|
177
|
The decline resulted from a decrease in working days due to Jewish holidays in September
|
||||||
Total Revenues
|
822
|
797
|
|||||||
Gross profit from equipment sales
|
44
|
37
|
The increase resulted from a change in product mix
|
||||||
OPEX
|
504
|
492
|
|||||||
Adjusted EBITDA
|
201
|
172
|
The increase reflected the increase in service revenues and gross profit from equipment, partially offset by the increase in OPEX
|
||||||
Profit for the Period
|
26
|
2
|
The increase mainly resulted from the increase in Adjusted EBITDA
|
||||||
Capital Expenditures (additions)
|
111
|
98
|
|||||||
Adjusted free cash flow (before interest payments)
|
70
|
55
|
The increase mainly reflected the increase in Adjusted EBITDA
|
||||||
Net Debt
|
898
|
893
|
Q3’18
|
Q2’18
|
Comments
|
|||||||
Cellular Post-Paid Subscribers (end of period, thousands)
|
2,349
|
2,338
|
*
|
Increase of 11 thousand subscribers
|
|||||
Cellular Pre-Paid Subscribers
(end of period, thousands)
|
297
|
300
|
Decrease of 3 thousand subscribers
|
||||||
Monthly Average Revenue per Cellular User (ARPU) (NIS)
|
60
|
57
|
The increase resulted from seasonality and a one-time provision in Q2 2018
|
||||||
Quarterly Cellular Churn Rate (%)
|
8.0
|
%
|
10.1
|
%*
|
Decrease in both Post-Paid and Pre-Paid churn rates
|
NIS MILLION (except EPS)
|
Q3'18
|
Q3'17
|
% Change
|
|||||||||
Revenues
|
822
|
826
|
0
|
%
|
||||||||
Cost of revenues
|
657
|
625
|
+5
|
%
|
||||||||
Gross profit
|
165
|
201
|
-18
|
%
|
||||||||
Operating profit
|
48
|
92
|
-48
|
%
|
||||||||
Profit for the period
|
26
|
54
|
-52
|
%
|
||||||||
Earnings per share (basic, NIS)
|
0.16
|
0.32
|
||||||||||
Adjusted free cash flow (before interest)
|
70
|
202
|
-65
|
%
|
Q3'18
|
Q3'17
|
Change
|
||||||||||
Adjusted EBITDA (NIS million)
|
201
|
239
|
-16
|
%
|
||||||||
Adjusted EBITDA (as a % of total revenues)
|
24
|
%
|
29
|
%
|
-5
|
|||||||
Cellular Subscribers (end of period, thousands)
|
2,646
|
2,677
|
-31
|
|||||||||
Quarterly Cellular Churn Rate (%)
|
8.0
|
%
|
9.3
|
%
|
-1.3
|
|||||||
Monthly Average Revenue per Cellular User (ARPU) (NIS)
|
60
|
64
|
-4
|
Cellular Segment
|
Fixed-Line Segment
|
Elimination
|
Consolidated
|
|||||||||||||||||||||||||||||||||||||||||
NIS Million
|
Q3'18
|
Q3'17
|
Change %
|
Q3'18
|
Q3'17
|
Change %
|
Q3'18
|
Q3'17
|
Q3'18
|
Q3'17
|
Change %
|
|||||||||||||||||||||||||||||||||
Total Revenues
|
619
|
652
|
-5
|
%
|
245
|
216
|
+13
|
%
|
(42
|
)
|
(42
|
)
|
822
|
826
|
0
|
%
|
||||||||||||||||||||||||||||
Service Revenues
|
476
|
514
|
-7
|
%
|
220
|
194
|
+13
|
%
|
(42
|
)
|
(42
|
)
|
654
|
666
|
-2
|
%
|
||||||||||||||||||||||||||||
Equipment Revenues
|
143
|
138
|
+4
|
%
|
25
|
22
|
+14
|
%
|
-
|
-
|
168
|
160
|
+5
|
%
|
||||||||||||||||||||||||||||||
Operating Profit
|
32
|
74
|
-57
|
%
|
16
|
18
|
-11
|
%
|
-
|
-
|
48
|
92
|
-48
|
%
|
||||||||||||||||||||||||||||||
Adjusted EBITDA
|
145
|
189
|
-23
|
%
|
56
|
50
|
+12
|
%
|
-
|
-
|
201
|
239
|
-16
|
%
|
Non-GAAP Measure
|
Calculation
|
Most Comparable IFRS Financial Measure
|
Adjusted EBITDA*
Adjusted EBITDA margin (%)
|
Adjusted EBITDA:
Profit (Loss)
add
Income tax expenses,
Finance costs, net,
Depreciation and amortization expenses (including amortization of intangible assets, deferred expenses-right of use and impairment charges), Other expenses (mainly amortization of share based compensation)
Adjusted EBITDA margin (%):
Adjusted EBITDA
divided by
Total revenues
|
Profit (Loss)
|
Adjusted Free Cash Flow**
|
Adjusted Free Cash Flow:
Cash flows from operating activities
deduct
Cash flows from investing activities
add
Short-term investment in (proceeds from) deposits
|
Cash flows from operating activities
deduct
Cash flows from investing activities
|
Total Operating Expenses (OPEX)
|
Total Operating Expenses:
Cost of service revenues
add
Selling and marketing expenses
add
General and administrative expenses
deduct
Depreciation and amortization expenses,
Other expenses (mainly amortization of employee share based compensation)
|
Sum of:
Cost of service revenues,
Selling and marketing expenses,
General and administrative expenses
|
Net Debt
|
Net Debt:
Current maturities of notes payable and borrowings
add
Notes payable
add
Borrowings from banks and others
deduct
Cash and cash equivalents
deduct
Short-term deposits
|
Sum of:
Current maturities of notes payable and borrowings,
Notes payable,
Borrowings from banks and others
|
*
|
Adjusted EBITDA is fully comparable with EBITDA measure which was provided in reports for prior periods.
|
**
|
Adjusted Free Cash Flow measure is fully comparable to Free Cash Flow measure which was provided in reports for prior periods.
|
Tamir Amar
Chief Financial Officer
Tel: +972-54-781-4951
|
Liat Glazer Shaft
Head of Investor Relations and Corporate Projects
Tel: +972-54-781-5051
E-mail: investors@partner.co.il
|
New Israeli Shekels
|
Convenience translation into U.S. Dollars
|
|||||||||||
September 30,
|
December 31,
|
September 30,
|
||||||||||
2018
|
2017
|
2018
|
||||||||||
(Unaudited)
|
(Audited)
|
(Unaudited)
|
||||||||||
In millions
|
||||||||||||
CURRENT ASSETS
|
||||||||||||
Cash and cash equivalents
|
361
|
867
|
100
|
|||||||||
Short-term deposits
|
291
|
150
|
80
|
|||||||||
Trade receivables
|
679
|
808
|
187
|
|||||||||
Other receivables and prepaid expenses
|
49
|
48
|
14
|
|||||||||
Deferred expenses – right of use
|
46
|
43
|
13
|
|||||||||
Inventories
|
80
|
93
|
22
|
|||||||||
1,506
|
2,009
|
416
|
||||||||||
NON CURRENT ASSETS
|
||||||||||||
Trade receivables
|
251
|
232
|
68
|
|||||||||
Prepaid expenses and other
|
6
|
5
|
2
|
|||||||||
Deferred expenses – right of use
|
176
|
133
|
49
|
|||||||||
Property and equipment
|
1,157
|
1,180
|
319
|
|||||||||
Intangible and other assets
|
634
|
697
|
175
|
|||||||||
Goodwill
|
409
|
407
|
113
|
|||||||||
Deferred income tax asset
|
37
|
55
|
10
|
|||||||||
2,670
|
2,709
|
736
|
||||||||||
TOTAL ASSETS
|
4,176
|
4,718
|
1,152
|
New Israeli Shekels |
Convenience translation into U.S. Dollars
|
|||||||||||
September 30,
|
December 31,
|
September 30,
|
||||||||||
2018
|
2017
|
2018
|
||||||||||
(Unaudited)
|
(Audited)
|
(Unaudited)
|
||||||||||
In millions
|
||||||||||||
CURRENT LIABILITIES
|
||||||||||||
Current maturities of notes payable and borrowings
|
371
|
705
|
102
|
|||||||||
Trade payables
|
706
|
787
|
195
|
|||||||||
Payables in respect of employees
|
58
|
91
|
16
|
|||||||||
Other payables (mainly institutions)
|
36
|
31
|
10
|
|||||||||
Income tax payable
|
57
|
50
|
16
|
|||||||||
Deferred revenues from HOT mobile
|
31
|
31
|
9
|
|||||||||
Other deferred revenues
|
39
|
41
|
11
|
|||||||||
Provisions
|
69
|
75
|
19
|
|||||||||
1,367
|
1,811
|
378
|
||||||||||
NON CURRENT LIABILITIES
|
||||||||||||
Notes payable
|
975
|
975
|
269
|
|||||||||
Borrowings from banks and others
|
204
|
243
|
56
|
|||||||||
Liability for employee rights upon retirement, net
|
41
|
40
|
11
|
|||||||||
Dismantling and restoring sites obligation
|
20
|
27
|
6
|
|||||||||
Deferred revenues from HOT mobile
|
141
|
164
|
39
|
|||||||||
Other non-current liabilities
|
27
|
24
|
7
|
|||||||||
1,408
|
1,473
|
388
|
||||||||||
TOTAL LIABILITIES
|
2,775
|
3,284
|
766
|
|||||||||
EQUITY
|
||||||||||||
Share capital - ordinary shares of NIS 0.01
par value: authorized - December 31, 2017
and September 30, 2018 - 235,000,000 shares;
issued and outstanding -
|
2
|
2
|
1
|
|||||||||
December 31, 2017 –**168,243,913 shares
|
||||||||||||
September 30, 2018 – **163,154,257 shares
|
||||||||||||
Capital surplus
|
1,131
|
1,164
|
312
|
|||||||||
Accumulated retained earnings
|
539
|
491
|
148
|
|||||||||
Treasury shares, at cost
December 31, 2017 – ***2,850,472 shares
September 30, 2018 – ***7,943,348 shares
|
(272
|
)
|
(223
|
)
|
(75
|
)
|
||||||
Non-controlling interests
|
1
|
*
|
||||||||||
TOTAL EQUITY
|
1,401
|
1,434
|
386
|
|||||||||
TOTAL LIABILITIES AND EQUITY
|
4,176
|
4,718
|
1,152
|
*
|
Representing an amount of less than 1 million.
|
**
|
Net of treasury shares.
|
***
|
Including, restricted shares in amount of 1,376,381 and 1,038,219 as of and December 31, 2017 and September 30, 2018, respectively, held by a trustee under the Company's Equity Incentive Plan, such shares may become outstanding upon completion of vesting conditions.
|
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, |
|||||||||||||||||||||
2018
|
2017
|
2018
|
2017
|
2018
|
2018
|
|||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||
In millions (except per share data)
|
||||||||||||||||||||||||
Revenues, net
|
2,445
|
2,434
|
822
|
826
|
674
|
227
|
||||||||||||||||||
Cost of revenues
|
2,006
|
1,916
|
657
|
625
|
553
|
182
|
||||||||||||||||||
Gross profit
|
439
|
518
|
165
|
201
|
121
|
45
|
||||||||||||||||||
Selling and marketing expenses
|
221
|
189
|
78
|
70
|
61
|
21
|
||||||||||||||||||
General and administrative expenses
|
137
|
146
|
46
|
46
|
38
|
13
|
||||||||||||||||||
Income with respect to settlement agreement with Orange
|
108
|
|||||||||||||||||||||||
Other income, net
|
21
|
24
|
7
|
7
|
6
|
2
|
||||||||||||||||||
Operating profit
|
102
|
315
|
48
|
92
|
28
|
13
|
||||||||||||||||||
Finance income
|
4
|
4
|
1
|
5
|
1
|
*
|
||||||||||||||||||
Finance expenses
|
45
|
96
|
11
|
20
|
12
|
3
|
||||||||||||||||||
Finance costs, net
|
41
|
92
|
10
|
15
|
11
|
3
|
||||||||||||||||||
Profit before income tax
|
61
|
223
|
38
|
77
|
17
|
10
|
||||||||||||||||||
Income tax expenses
|
24
|
59
|
12
|
23
|
7
|
3
|
||||||||||||||||||
Profit for the period
|
37
|
164
|
26
|
54
|
10
|
7
|
||||||||||||||||||
Attributable to:
|
||||||||||||||||||||||||
Owners of the Company
|
37
|
164
|
26
|
54
|
10
|
7
|
||||||||||||||||||
Non-controlling interests
|
*
|
*
|
*
|
*
|
||||||||||||||||||||
Profit for the period
|
37
|
164
|
26
|
54
|
10
|
7
|
||||||||||||||||||
Earnings per share
|
||||||||||||||||||||||||
Basic
|
0.22
|
1.02
|
0.16
|
0.32
|
0.06
|
0.04
|
||||||||||||||||||
Diluted
|
0.22
|
1.01
|
0.16
|
0.32
|
0.06
|
0.04
|
||||||||||||||||||
Weighted average number of shares outstanding (in thousands)
|
||||||||||||||||||||||||
Basic
|
167,137
|
161,002
|
164,785
|
167,371
|
167,137
|
164,785
|
||||||||||||||||||
Diluted
|
168,047
|
162,745
|
165,611
|
168,815
|
168,047
|
165,611
|
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, |
|||||||||||||||||||||
2018
|
2017
|
2018
|
2017
|
2018
|
2018
|
|||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||
In millions
|
||||||||||||||||||||||||
Profit for the period
|
37
|
164
|
26
|
54
|
10
|
7
|
||||||||||||||||||
Other comprehensive income for the period, net of income tax
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
|
37
|
164
|
26
|
54
|
10
|
7
|
||||||||||||||||||
Total comprehensive income attributable to:
|
||||||||||||||||||||||||
Owners of the Company
|
37
|
164
|
26
|
54
|
10
|
7
|
||||||||||||||||||
Non-controlling interests
|
*
|
-
|
*
|
-
|
*
|
*
|
||||||||||||||||||
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
|
37
|
164
|
26
|
54
|
10
|
7
|
New Israeli Shekels
|
New Israeli Shekels
|
|||||||||||||||||||||||||||||||
Nine months ended September 30, 2018
|
Nine months ended September 30, 2017
|
|||||||||||||||||||||||||||||||
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
|
1,384
|
515
|
1,899
|
1,487
|
465
|
1,952
|
||||||||||||||||||||||||||
Inter-segment revenue - Services
|
12
|
117
|
(129
|
)
|
13
|
115
|
(128
|
)
|
||||||||||||||||||||||||
Segment revenue - Equipment
|
478
|
68
|
546
|
428
|
54
|
482
|
||||||||||||||||||||||||||
Total revenues
|
1,874
|
700
|
(129
|
)
|
2,445
|
1,928
|
634
|
(128
|
)
|
2,434
|
||||||||||||||||||||||
Segment cost of revenues – Services
|
1,072
|
512
|
1,584
|
1,093
|
443
|
1,536
|
||||||||||||||||||||||||||
Inter-segment cost of revenues- Services
|
116
|
13
|
(129
|
)
|
114
|
14
|
(128
|
)
|
||||||||||||||||||||||||
Segment cost of revenues - Equipment
|
377
|
45
|
422
|
342
|
38
|
380
|
||||||||||||||||||||||||||
Cost of revenues
|
1,565
|
570
|
(129
|
)
|
2,006
|
1,549
|
495
|
(128
|
)
|
1,916
|
||||||||||||||||||||||
Gross profit
|
309
|
130
|
439
|
379
|
139
|
518
|
||||||||||||||||||||||||||
Operating expenses (3)
|
261
|
97
|
358
|
268
|
67
|
335
|
||||||||||||||||||||||||||
Income with respect to settlement
agreement with Orange
|
108
|
108
|
||||||||||||||||||||||||||||||
Other income, net
|
18
|
3
|
21
|
23
|
1
|
24
|
||||||||||||||||||||||||||
Operating profit
|
66
|
36
|
102
|
242
|
73
|
315
|
||||||||||||||||||||||||||
Adjustments to presentation of segment Adjusted EBITDA
|
||||||||||||||||||||||||||||||||
–Depreciation and amortization
|
328
|
109
|
327
|
100
|
||||||||||||||||||||||||||||
–Other (1)
|
11
|
17
|
||||||||||||||||||||||||||||||
Segment Adjusted EBITDA (2)
|
405
|
145
|
586
|
173
|
||||||||||||||||||||||||||||
Reconciliation of segment subtotal Adjusted EBITDA to profit for the period
|
||||||||||||||||||||||||||||||||
Segments subtotal Adjusted EBITDA (2)
|
550
|
759
|
||||||||||||||||||||||||||||||
- Depreciation and amortization
|
(437
|
)
|
(427
|
)
|
||||||||||||||||||||||||||||
- Finance costs, net
|
(41
|
)
|
(92
|
)
|
||||||||||||||||||||||||||||
- Income tax expenses
|
(24
|
)
|
(59
|
)
|
||||||||||||||||||||||||||||
- Other (1)
|
(11
|
)
|
(17
|
)
|
||||||||||||||||||||||||||||
Profit for the period
|
37
|
164
|
New Israeli Shekels
|
New Israeli Shekels
|
|||||||||||||||||||||||||||||||
Three months ended September 30, 2018
|
Three months ended September 30, 2017
|
|||||||||||||||||||||||||||||||
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
|
473
|
181
|
654
|
510
|
156
|
666
|
||||||||||||||||||||||||||
Inter-segment revenue - Services
|
3
|
39
|
(42
|
)
|
4
|
38
|
(42
|
)
|
||||||||||||||||||||||||
Segment revenue - Equipment
|
143
|
25
|
168
|
138
|
22
|
160
|
||||||||||||||||||||||||||
Total revenues
|
619
|
245
|
(42
|
)
|
822
|
652
|
216
|
(42
|
)
|
826
|
||||||||||||||||||||||
Segment cost of revenues – Services
|
355
|
178
|
533
|
358
|
150
|
508
|
||||||||||||||||||||||||||
Inter-segment cost of revenues- Services
|
38
|
4
|
(42
|
)
|
38
|
4
|
(42
|
)
|
||||||||||||||||||||||||
Segment cost of revenues - Equipment
|
111
|
13
|
124
|
102
|
15
|
117
|
||||||||||||||||||||||||||
Cost of revenues
|
504
|
195
|
(42
|
)
|
657
|
498
|
169
|
(42
|
)
|
625
|
||||||||||||||||||||||
Gross profit
|
115
|
50
|
165
|
154
|
47
|
201
|
||||||||||||||||||||||||||
Operating expenses (3)
|
88
|
36
|
124
|
87
|
29
|
116
|
||||||||||||||||||||||||||
Other income, net
|
5
|
2
|
7
|
7
|
*
|
7
|
||||||||||||||||||||||||||
Operating profit
|
32
|
16
|
48
|
74
|
18
|
92
|
||||||||||||||||||||||||||
Adjustments to presentation of segment Adjusted EBITDA
|
||||||||||||||||||||||||||||||||
–Depreciation and amortization
|
109
|
40
|
109
|
32
|
||||||||||||||||||||||||||||
–Other (1)
|
4
|
6
|
||||||||||||||||||||||||||||||
Segment Adjusted EBITDA (2)
|
145
|
56
|
189
|
50
|
||||||||||||||||||||||||||||
Reconciliation of segment subtotal Adjusted EBITDA to profit for the period
|
||||||||||||||||||||||||||||||||
Segments subtotal Adjusted EBITDA (2)
|
201
|
239
|
||||||||||||||||||||||||||||||
- Depreciation and amortization
|
(149
|
)
|
(141
|
)
|
||||||||||||||||||||||||||||
- Finance costs, net
|
(10
|
)
|
(15
|
)
|
||||||||||||||||||||||||||||
- Income tax expenses
|
(12
|
)
|
(23
|
)
|
||||||||||||||||||||||||||||
- Other (1)
|
(4
|
)
|
(6
|
)
|
||||||||||||||||||||||||||||
Profit for the period
|
26
|
54
|
New Israeli Shekels
|
Convenience translation into
U.S. Dollars |
|||||||||||
9 months ended September 30,
|
||||||||||||
2018
|
2017
|
2018
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
In millions
|
||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Cash generated from operations (Appendix)
|
504
|
804
|
140
|
|||||||||
Income tax paid
|
*
|
(7
|
)
|
*
|
||||||||
Net cash provided by operating activities
|
504
|
797
|
140
|
|||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Acquisition of property and equipment
|
(241
|
)
|
(146
|
)
|
(66
|
)
|
||||||
Acquisition of intangible and other assets
|
(118
|
)
|
(117
|
)
|
(33
|
)
|
||||||
Proceeds from (investment in) short-term deposits, net
|
(141
|
)
|
302
|
(39
|
)
|
|||||||
Interest received
|
1
|
2
|
*
|
|||||||||
Consideration received from sales of property and equipment
|
3
|
*
|
1
|
|||||||||
Payment for acquisition of subsidiary, net of cash acquired
|
(3
|
)
|
(1
|
)
|
||||||||
Net cash provided by (used in) investing activities
|
(499
|
)
|
41
|
(138
|
)
|
|||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Share issuance
|
190
|
|||||||||||
Acquisition of treasury shares
|
(82
|
)
|
(23
|
)
|
||||||||
Interest paid
|
(54
|
)
|
(85
|
)
|
(15
|
)
|
||||||
Proceeds from issuance of notes payable, net of issuance costs
|
252
|
|||||||||||
Repayment of non-current borrowings
|
(375
|
)
|
(901
|
)
|
(103
|
)
|
||||||
Net cash used in financing activities
|
(511
|
)
|
(544
|
)
|
(141
|
)
|
||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(506
|
)
|
294
|
(139
|
)
|
|||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
867
|
716
|
239
|
|||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
361
|
1,010
|
100
|
New Israeli Shekels |
Convenience translation into
U.S. Dollars |
|||||||||||
9 months ended September 30,
|
||||||||||||
2018
|
2017
|
2018
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
In millions
|
||||||||||||
Cash generated from operations:
|
||||||||||||
Profit for the period
|
37
|
164
|
10
|
|||||||||
Adjustments for:
|
||||||||||||
Depreciation and amortization
|
406
|
399
|
112
|
|||||||||
Amortization of deferred expenses - Right of use
|
31
|
28
|
9
|
|||||||||
Employee share based compensation expenses
|
11
|
16
|
3
|
|||||||||
Liability for employee rights upon retirement, net
|
1
|
(3
|
)
|
*
|
||||||||
Finance costs, net
|
(1
|
)
|
(3
|
)
|
*
|
|||||||
Change in fair value of derivative financial instruments
|
(1
|
)
|
||||||||||
Interest paid
|
54
|
85
|
15
|
|||||||||
Interest received
|
2
|
(2
|
)
|
1
|
||||||||
Deferred income taxes
|
17
|
14
|
5
|
|||||||||
Income tax paid
|
7
|
|||||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Decrease (increase) in accounts receivable:
|
||||||||||||
Trade
|
110
|
276
|
30
|
|||||||||
Other
|
(2
|
)
|
(5
|
)
|
(1
|
)
|
||||||
Increase (decrease) in accounts payable and accruals:
|
||||||||||||
Trade
|
(46
|
)
|
45
|
(13
|
)
|
|||||||
Other payables
|
(29
|
)
|
(49
|
)
|
(8
|
)
|
||||||
Provisions
|
(6
|
)
|
1
|
(2
|
)
|
|||||||
Deferred income with respect to settlement agreement with Orange
|
(108
|
)
|
||||||||||
Deferred revenues from HOT mobile
|
(23
|
)
|
(23
|
)
|
(6
|
)
|
||||||
Other deferred revenues
|
(1
|
)
|
5
|
*
|
||||||||
Increase in deferred expenses - Right of use
|
(77
|
)
|
(86
|
)
|
(21
|
)
|
||||||
Current income tax
|
7
|
38
|
2
|
|||||||||
Decrease in inventories
|
13
|
6
|
4
|
|||||||||
Cash generated from operations
|
504
|
804
|
140
|
Adjusted Free Cash Flow
|
New Israeli Shekels
|
Convenience translation into
U.S. Dollars |
Convenience translation into
U.S. Dollars |
|||||||||||||||||||||
9 months
period ended September 30,
|
9 months
period ended September 30,
|
3 months
period ended
September 30,
|
3 months
period ended September 30,
|
9 months
period ended
September 30,
|
3 months
period ended
September 30,
|
|||||||||||||||||||
2018
|
2017
|
2018
|
2017
|
2018
|
2018
|
|||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||
In millions
|
||||||||||||||||||||||||
Net cash provided by operating activities
|
504
|
797
|
188
|
306
|
140
|
52
|
||||||||||||||||||
Net cash used in investing activities
|
(499
|
)
|
41
|
(118
|
)
|
(254
|
)
|
(138
|
)
|
(33
|
)
|
|||||||||||||
Short-term investment in deposits
|
141
|
(302
|
)
|
150
|
39
|
|||||||||||||||||||
Adjusted Free Cash Flow
|
146
|
536
|
70
|
202
|
41
|
19
|
||||||||||||||||||
Interest paid
|
(54
|
)
|
(85
|
)
|
(8
|
)
|
(10
|
)
|
(15
|
)
|
(2
|
)
|
||||||||||||
Adjusted Free Cash Flow After Interest
|
92
|
451
|
62
|
192
|
26
|
17
|
Total Operating Expenses (OPEX)
|
New Israeli Shekels |
Convenience translation into
U.S. Dollars |
Convenience translation into
U.S. Dollars |
|||||||||||||||||||||
9 months
period ended September 30,
|
9 months
period ended September 30,
|
3 months
period ended
September 30,
|
3 months
period ended September 30,
|
9 months
period ended
September 30,
|
3 months
period ended
September 30,
|
|||||||||||||||||||
2018
|
2017
|
2018
|
2017
|
2018
|
2018
|
|||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||
In millions
|
||||||||||||||||||||||||
Cost of revenues – Services
|
1,584
|
1,536
|
533
|
508
|
437
|
147
|
||||||||||||||||||
Selling and marketing expenses
|
221
|
189
|
78
|
70
|
61
|
21
|
||||||||||||||||||
General and administrative expenses
|
137
|
146
|
46
|
46
|
38
|
13
|
||||||||||||||||||
Depreciation and amortization (2)
|
(437
|
)
|
(427
|
)
|
(149
|
)
|
(141
|
)
|
(121
|
)
|
(41
|
)
|
||||||||||||
Other (1)
|
(11
|
)
|
(17
|
)
|
(4
|
)
|
(6
|
)
|
(3
|
)
|
(1
|
)
|
||||||||||||
OPEX
|
1,494
|
1,427
|
504
|
477
|
412
|
139
|
(1) |
Mainly amortization of employee share based compensation.
|
NIS M unless otherwise stated
|
Q2' 16
|
Q3' 16
|
Q4' 16
|
Q1' 17
|
Q2' 17
|
Q3' 17
|
Q4' 17
|
Q1' 18
|
Q2' 18
|
Q3' 18
|
2016
|
2017
|
||||||||||||||||||||||||||||||||||||
Cellular Segment Service Revenues
|
527
|
531
|
498
|
489
|
497
|
514
|
478
|
466
|
454
|
476
|
2,099
|
1,978
|
||||||||||||||||||||||||||||||||||||
Cellular Segment Equipment Revenues
|
188
|
139
|
158
|
145
|
145
|
138
|
182
|
178
|
157
|
143
|
729
|
610
|
||||||||||||||||||||||||||||||||||||
Fixed-Line Segment Service Revenues
|
219
|
220
|
205
|
194
|
192
|
194
|
197
|
202
|
210
|
220
|
866
|
777
|
||||||||||||||||||||||||||||||||||||
Fixed-Line Segment Equipment Revenues
|
17
|
12
|
11
|
18
|
14
|
22
|
22
|
23
|
20
|
25
|
63
|
76
|
||||||||||||||||||||||||||||||||||||
Reconciliation for consolidation
|
(54
|
)
|
(53
|
)
|
(51
|
)
|
(43
|
)
|
(43
|
)
|
(42
|
)
|
(45
|
)
|
(43
|
)
|
(44
|
)
|
(42
|
)
|
(213
|
)
|
(173
|
)
|
||||||||||||||||||||||||
Total Revenues
|
897
|
849
|
821
|
803
|
805
|
826
|
834
|
826
|
797
|
822
|
3,544
|
3,268
|
||||||||||||||||||||||||||||||||||||
Gross Profit from Equipment Sales
|
42
|
28
|
18
|
26
|
33
|
43
|
40
|
43
|
37
|
44
|
144
|
142
|
||||||||||||||||||||||||||||||||||||
Operating Profit
|
67
|
64
|
8
|
105
|
118
|
92
|
0
|
32
|
22
|
48
|
193
|
315
|
||||||||||||||||||||||||||||||||||||
Cellular Segment Adjusted EBITDA
|
155
|
156
|
109
|
187
|
210
|
189
|
124
|
134
|
126
|
145
|
562
|
710
|
||||||||||||||||||||||||||||||||||||
Fixed-Line Segment Adjusted EBITDA
|
73
|
64
|
55
|
64
|
59
|
50
|
34
|
43
|
46
|
56
|
272
|
207
|
||||||||||||||||||||||||||||||||||||
Total Adjusted EBITDA
|
228
|
220
|
164
|
251
|
269
|
239
|
158
|
177
|
172
|
201
|
834
|
917
|
||||||||||||||||||||||||||||||||||||
Adjusted EBITDA Margin (%)
|
25
|
%
|
26
|
%
|
20
|
%
|
31
|
%
|
33
|
%
|
29
|
%
|
19
|
%
|
21
|
%
|
22
|
%
|
24
|
%
|
24
|
%
|
28
|
%
|
||||||||||||||||||||||||
OPEX
|
572
|
570
|
570
|
478
|
472
|
477
|
519
|
498
|
492
|
504
|
2,324
|
1,946
|
||||||||||||||||||||||||||||||||||||
Income with respect to settlement agreement with Orange
|
54
|
55
|
54
|
54
|
54
|
217
|
108
|
|||||||||||||||||||||||||||||||||||||||||
Finance costs, net
|
28
|
30
|
23
|
23
|
54
|
15
|
88
|
18
|
13
|
10
|
105
|
180
|
||||||||||||||||||||||||||||||||||||
Profit (loss)
|
26
|
19
|
(7
|
)
|
64
|
46
|
54
|
(50
|
)
|
9
|
2
|
26
|
52
|
114
|
||||||||||||||||||||||||||||||||||
Capital Expenditures (cash)
|
57
|
44
|
47
|
82
|
76
|
105
|
113
|
138
|
104
|
117
|
196
|
376
|
||||||||||||||||||||||||||||||||||||
Capital Expenditures (additions)
|
40
|
44
|
84
|
58
|
78
|
107
|
174
|
113
|
98
|
111
|
202
|
417
|
||||||||||||||||||||||||||||||||||||
Adjusted Free Cash Flow
|
160
|
215
|
269
|
126
|
208
|
202
|
63
|
21
|
55
|
70
|
758
|
599
|
||||||||||||||||||||||||||||||||||||
Adjusted Free Cash Flow (after interest)
|
119
|
201
|
241
|
109
|
150
|
192
|
(17
|
)
|
(14
|
)
|
44
|
62
|
650
|
434
|
||||||||||||||||||||||||||||||||||
Net Debt
|
1,964
|
1,768
|
1,526
|
1,415
|
1,081
|
887
|
906
|
919
|
893
|
898
|
1,526
|
906
|
||||||||||||||||||||||||||||||||||||
Cellular Subscriber Base (Thousands)*
|
2,700
|
2,693
|
2,686
|
2,658
|
2,662
|
2,677
|
2,671
|
2,661
|
2,638
|
2,646
|
2,686
|
2,671
|
||||||||||||||||||||||||||||||||||||
Post-Paid Subscriber Base (Thousands)*
|
2,191
|
2,215
|
2,241
|
2,259
|
2,273
|
2,306
|
2,317
|
2,330
|
2,338
|
2,349
|
2,241
|
2,317
|
||||||||||||||||||||||||||||||||||||
Pre-Paid Subscriber Base (Thousands)
|
509
|
478
|
445
|
399
|
389
|
371
|
354
|
331
|
300
|
297
|
445
|
354
|
||||||||||||||||||||||||||||||||||||
Cellular ARPU (NIS)
|
65
|
66
|
62
|
61
|
62
|
64
|
59
|
58
|
57
|
60
|
65
|
62
|
||||||||||||||||||||||||||||||||||||
Cellular Churn Rate (%)*
|
9.8
|
%
|
9.7
|
%
|
9.4
|
%
|
9.8
|
%
|
9.0
|
%
|
9.3
|
%
|
9.9
|
%
|
8.9
|
%
|
10.1
|
%
|
8.0
|
%
|
40
|
%
|
38
|
%
|
||||||||||||||||||||||||
Number of Employees (FTE)
|
2,740
|
2,742
|
2,686
|
2,580
|
2,582
|
2,696
|
2,797
|
2,778
|
2,808
|
2,821
|
2,686
|
2,797
|
*
|
The Post-Paid subscriber base for the fourth quarter 2017 and for the first quarter 2018 have been revised by approx. 3 thousand subscribers in each of the quarters. This also led to a marginal change in the cellular churn rate for the first and the second quarters of 2018.
|
**
|
See footnote 2 regarding use of non-GAAP measures. Figures from 2017 include impact of adoption of IFRS15.
|
Series
|
Original issuance date
|
Principal on the date of issuance
|
As of 30.09.2018
|
Interest rate
|
Principal repayment dates
|
Interest repayment dates
|
Linkage
|
Trustee contact details
|
||||
Principal book value
|
Linked principal book value
|
Interest accumulated in books
|
Market value
|
From
|
To
|
|||||||
C
|
25.04.10
24.02.11*
|
200
444
|
196
|
215
|
2
|
218
|
3.35%
+
CPI
|
30.12.16
|
30.12.18
|
30.6, 30.12
|
Linked to CPI
|
Hermetic Trust (1975) Ltd.
Merav Offer. 113 Hayarkon St., Tel Aviv. Tel: 03-5544553.
|
D
|
25.04.10
04.05.11*
|
400
146
|
437
|
437
|
**
|
443
|
1.338%
(MAKAM+1.2%)
|
30.12.17
|
30.12.21
|
30.3, 30.6, 30.9, 30.12
|
Variable interest MAKAM (2)
|
Hermetic Trust (1975) Ltd. Merav Offer. 113 Hayarkon St., Tel Aviv. Tel: 03-5544553.
|
F
(1)
|
20.07.17
12.12.17
|
255
389
|
644
|
644
|
4
|
648
|
2.16%
|
25.06.20
|
25.06.24
|
25.6, 25.12
|
Not Linked
|
Hermetic Trust (1975) Ltd.
Merav Offer. 113 Hayarkon St., Tel Aviv. Tel: 03-5544553.
|
Series
|
Rating Company
|
Rating as of 30.09.2018 and 21.11.2018 (1)
|
Rating assigned upon issuance of the Series
|
Recent date of rating as of 30.09.2018 and 21.11.2018
|
Additional ratings between the original issuance date and the recent date of rating (2)
|
|
Date
|
Rating
|
|||||
C
|
S&P Maalot
|
ilA+
|
ilAA-
|
08/2018
|
07/2010, 09/2010,
10/2010, 09/2012,
12/2012, 06/2013,
07/2014, 07/2015,
07/2016, 07/2017,
08/2018
|
ilAA-/Stable, ilAA-/Stable,
ilAA-/Negative, ilAA-/Watch Neg,
ilAA-/Negative, ilAA-/Stable,
ilAA-/Stable, ilA+/Stable,
ilA+/Stable, ilA+/Stable,
ilA+/Stable
|
D
|
S&P Maalot
|
ilA+
|
ilAA-
|
08/2018
|
||
E
|
S&P Maalot
|
ilA+
|
ilAA-
|
08/2018
|
||
F
|
S&P Maalot
|
ilA+
|
ilA+
|
08/2018
|
07/2017, 09/2017
12/2017, 01/2018,
08/2018
|
ilA+/Stable, ilA+/Stable
ilA+/Stable, ilA+/Stable,
ilA+/Stable
|
a. |
Notes issued to the public by the Company and held by the public, excluding such notes held by the Company's parent company, by a controlling shareholder, by companies controlled by them, or by companies controlled by the Company, based on the Company's "Solo" financial data (in thousand NIS).
|
Principal payments
|
||||||||||||||||||||||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
Gross interest payments (without deduction of tax)
|
|||||||||||||||||||
First year
|
215,058
|
109,228
|
-
|
-
|
-
|
22,565
|
||||||||||||||||||
Second year
|
-
|
238,035
|
-
|
-
|
-
|
17,408
|
||||||||||||||||||
Third year
|
-
|
238,035
|
-
|
-
|
-
|
13,072
|
||||||||||||||||||
Fourth year
|
-
|
238,035
|
-
|
-
|
-
|
8,735
|
||||||||||||||||||
Fifth year and on
|
-
|
257,613
|
-
|
-
|
-
|
8,347
|
||||||||||||||||||
Total
|
215,058
|
1,080,946
|
-
|
-
|
-
|
70,127
|
b. |
Private notes and other non-bank credit, excluding such notes held by the Company's parent company, by a controlling shareholder, by companies controlled by them, or by companies controlled by the Company, based on the Company's "Solo" financial data – None.
|
c. |
Credit from banks in Israel based on the Company's "Solo" financial data (in thousand NIS).
|
Principal payments
|
||||||||||||||||||||||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
Gross interest payments (without deduction of tax)
|
|||||||||||||||||||
First year
|
-
|
46,452
|
-
|
-
|
-
|
5,729
|
||||||||||||||||||
Second year
|
-
|
52,132
|
-
|
-
|
-
|
4,500
|
||||||||||||||||||
Third year
|
-
|
52,132
|
-
|
-
|
-
|
3,229
|
||||||||||||||||||
Fourth year
|
-
|
52,132
|
-
|
-
|
-
|
1,959
|
||||||||||||||||||
Fifth year and on
|
-
|
47,152
|
-
|
-
|
-
|
1,038
|
||||||||||||||||||
Total
|
-
|
250,000
|
-
|
-
|
-
|
16,455
|
d. |
Credit from banks abroad based on the Company's "Solo" financial data – None.
|
e. |
Total of sections a - d above, total credit from banks, non-bank credit and notes based on the Company's "Solo" financial data (in thousand NIS).
|
Principal payments
|
||||||||||||||||||||||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
Gross interest payments (without deduction of tax)
|
|||||||||||||||||||
First year
|
215,058
|
155,680
|
-
|
-
|
-
|
28,294
|
||||||||||||||||||
Second year
|
-
|
290,167
|
-
|
-
|
-
|
21,908
|
||||||||||||||||||
Third year
|
-
|
290,167
|
-
|
-
|
-
|
16,301
|
||||||||||||||||||
Fourth year
|
-
|
290,167
|
-
|
-
|
-
|
10,694
|
||||||||||||||||||
Fifth year and on
|
-
|
304,765
|
-
|
-
|
-
|
9,385
|
||||||||||||||||||
Total
|
215,058
|
1,330,946
|
-
|
-
|
-
|
86,582
|
f. |
Off-balance sheet Credit exposure based on the Company's "Solo" financial data (in thousand NIS) – 50,000 (Guarantees on behalf of an associate, without expiration date).
|
g. |
Off-balance sheet Credit exposure of all the Company's consolidated companies, excluding companies that are reporting corporations and excluding the Company's data presented in section f above – None.
|
h. |
Total balances of the credit from banks, non-bank credit and notes of all the consolidated companies, excluding companies that are reporting corporations and excluding Company's data presented in sections a - d above - None.
|
i. |
Total balances of credit granted to the Company by the parent company or a controlling shareholder and balances of notes offered by the Company held by the parent company or the controlling shareholder - None.
|
j. |
Total balances of credit granted to the Company by companies held by the parent company or the controlling shareholder, which are not controlled by the Company, and balances of notes offered by the Company held by companies held by the parent company or the controlling shareholder, which are not controlled by the Company – None.
|
k. |
Total balances of credit granted to the Company by consolidated companies and balances of notes offered by the Company held by the consolidated companies - None
|
Partner Communications Company Ltd. | |||
By:
|
/s/ Tamir Amar | ||
Name: | Tamir Amar | ||
Title: | Chief Financial Officer |