SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN
PRIVATE ISSUER
PURSUANT TO RULE
13a-16 OR 15a-16 OF
THE SECURITIES
EXCHANGE ACT OF 1934
Report on Form 6-K
dated October 31, 2007
Partner
Communications Company Ltd.
(Translation of
Registrant’s Name Into English)
8 Amal Street
Afeq Industrial Park
Rosh Ha’ayin 48103
Israel
|
(Address
of Principal Executive Offices)
|
(Indicate
by check mark whether the registrant files or will file annual reports
under cover of Form
20-F or Form 40-F.)
Form 20-F
x
Form 40-F
o
(Indicate by
check mark whether the registrant by furnishing the
information contained in this Form
is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b)
under the Securities
Exchange Act of 1934.)
Yes
o
No
x
(If
“Yes” is marked, indicate below the file number assigned to the
registrant in
connection with Rule 12g3-2(b): 82-_____________)
This Form 6-K is incorporated by
reference into the Company’s Registration Statement on Form F-3 filed with the
Securities and Exchange Commission on December 26, 2001 (Registration No. 333-14222).
Enclosure
:
Partner Communications Reports Third Quarter 2007 Results.
PARTNER COMMUNICATIONS
REPORTS
THIRD QUARTER 2007
RESULTS
IMPROVING TRENDS LEAD
TO
STRONG OPERATIONAL AND
FINANCIAL RESULTS
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|
Q3
2007 Highlights (compared with Q3 2006)
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|
|
—
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Total
revenues:
NIS 1.6 billion (US$ 399 million), an increase of 9.5%
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|
|
—
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Operating
Profit:
NIS 390 million (US$ 97 million), an increase of 22.0%
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|
|
—
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Net
Income:
NIS 214 million (US$ 53 million), an increase of 15.9%
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|
|
—
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EBITDA*:
NIS 539 million (US$ 134 million), an increase of 13.2%
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|
|
—
|
EBITDA
Margin:
33.7% of total revenue compared with 32.6%
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|
|
—
|
Subscriber
Base:
increase of 62,000 in the quarter, to reach 2.796 million, including
488,000 3G subscribers
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|
|
—
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Dividend
Declared:
NIS 200 million dividend for the third quarter.
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Rosh Ha’ayin, Israel,
October 31st, 2007
– Partner Communications Company Ltd. (“Partner”)
(NASDAQ and TASE: PTNR; LSE: PCCD), a leading Israeli mobile communications operator,
today announced its results for the third quarter of 2007. Partner reported Q3 2007
revenues of NIS 1.6 billion (US$ 399 million), EBITDA of NIS 539 million
(US$ 134 million), and net income of NIS 214 million (US$ 53 million).
* See
“Use of Non-GAAP Financial Measures” below
1
Commenting on the quarter’s
results, Partner’s CEO, David Avner, said: “I am very pleased with the third
quarter’s results and with the company’s financial and operational achievements.
This quarter was a very strong quarter for Partner, in which the Company recruited 62,000
new subscribers, 80% of them are post-paid subscribers. With an increasing 3G
customers’ base of 488,000 subscribers, and by leading the 3.5G market in Israel,
Partner continues to build a solid foundation for future revenue growth. The positive
customers’ experience in 3.5G networks pushes forward the data services demand and
usage.”
Mr.
Avner added: “I am also very proud that this quarter orange
TM
was again re-elected the leading telecom brand in Israel for the fifth
consecutive year by Globes, the Israeli daily business newspaper. The strength
of our brand is a result of Partner’s focus on our service organization
which continues to excel and to meet our customers’ needs.”
Mr.
Avner also said: “We are getting closer to the implementation of number
portability. Partner is prepared and ready to leverage the assets it has built
in the last ten years, including its superb network, the best customer service
in Israel, the strongest brand in the telecom market and a wide range of
handsets and content services, in order to reach out to subscribers of other
companies and to ensure the continued satisfaction of Partner’s subscribers
from the advanced cellular services the company provides.”
Key Financial and
Operational Parameters
|
|
Q3 2006
|
Q2 2007
|
Q3 2007
|
Q3'07
vs Q2'07
|
Q3'07
vs Q3'06
|
|
|
|
|
|
|
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|
|
|
|
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|
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|
|
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Revenues (NIS millions)
|
|
|
|
1,462.0
|
|
|
1,467.5
|
|
|
1,601.0
|
|
|
9.1
|
%
|
|
9.5
|
%
|
|
Operating Profit (NIS millions)
|
|
|
|
319.5
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|
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367.2
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|
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389.7
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|
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6.1
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%
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22.0
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%
|
|
Net Income (NIS millions)
|
|
|
|
184.7
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|
|
228.1
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|
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214.0
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|
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(6.2
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)%
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15.9
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%
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|
Cash flow from operating activities net of
|
|
|
|
investing activities (NIS millions)
|
|
|
|
312.3
|
|
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234.3
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|
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135.3
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|
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(42.4
|
)%
|
|
(56.7
|
)%
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|
|
|
|
|
|
|
|
|
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|
|
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EBITDA (NIS millions)
|
|
|
|
476.7
|
|
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519.3
|
|
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539.3
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|
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3.9
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%
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13.2
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%
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|
Subscribers (thousands)
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|
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2,626
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2,733
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2,796
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2.3
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%
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6.5
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%
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|
Estimated Market Share (%)
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|
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32
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32
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32
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-
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|
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-
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|
|
Quarterly Churn Rate (%)
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|
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3.7
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3.5
|
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3.3
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|
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(0.2
|
)
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(0.4
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)
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|
Average Monthly Usage per Subscriber (minutes)
|
|
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322
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331
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343
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3.6
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%
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6.5
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%
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|
Average Monthly Revenue per Subscriber (NIS)
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164
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157
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165
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5.1
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%
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0.6
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%
|
2
Financial Review
Partner’s total
net revenues
were NIS 1,601.0 million (US$ 399.0 million) in Q3 2007, an increase of 9.5% from NIS
1,462.0 million in Q3 2006.
The increase is primarily a result of
service revenues
growth, which increased by 6.4% from NIS 1,316.4 million in Q3 2006 to
NIS 1,401.1 million (US$ 349.1 million) in Q3 2007. This reflects the subscriber base
growth, an improvement in the quality of the subscriber base, and higher average minutes
of use per subscriber. The increase was partially offset by a decrease in average revenue
per minute resulting from competitive pressures and regulatory intervention including the
approximate 10% reduction in interconnect tariffs which went into effect on March
1
st
2007, as part of the Ministry of Communications’ program of mandated
gradual reductions from 2005 to 2008, as well as the regulation restricting our ability to
charge for calls directed to voice mail which went into effect January 1
st
2007.
Content and data revenues
(including
SMS) in Q3 2007 increased by 33.0% from Q3 2006 to NIS 184.2 million, accounting
for 13.1% of total service revenues, compared with 10.5% of total service revenues in Q3
2006. Compared with Q3 2006, non-SMS data and content revenues increased by 28% in Q3
2007.
Gross profit from services
in Q3 2007
was NIS 593.5 million (US$ 147.9 million), representing an increase of 13.7% from NIS
522.2 million in Q3 2006. The increase reflects the higher service revenues, offset by a
1.7% increase in the cost of service revenues which is primarily due to higher variable
airtime and content costs.
In Q3 2007,
equipment revenues
totaled NIS 199.9 million (US$ 49.8 million), a 37.4% increase from 145.6 million in Q3
2006. The increase is primarily attributed to the increase in the total number of sales
and the proportion of 3G handsets sold compared with 2G handsets.
Gross loss on equipment
was NIS 66.0 million (US$ 16.5 million) in Q3 2007, compared with NIS 64.9 million in Q3
2006, a 1.8% increase.
3
Gross profit overall
in Q3 2007
increased 15.3% to NIS 527.5 million (US$ 131.4 million) from NIS 457.4 million in Q3
2006.
Selling, marketing, general and
administration expenses
amounted to NIS 137.8 million (US$ 34.3 million) in Q3 2007, no
change from NIS 137.8 million in Q3 2006. Within the total, selling and marketing expenses
increased marginally by 2.6% and general and administrative expenses decreased by 4.2%,
reflecting the continuing efforts of the Company to increase operating efficiency.
Overall,
operating profit
was NIS
389.7 million (US$ 97.1 million) in Q3 2007, a 22.0% increase compared with NIS 319.5
million in Q3 2006.
Quarterly
EBITDA
in Q3 2007 totaled NIS 539.3 million (US$ 134.4
million) or 33.7% of total revenues, the equivalent of a 13.2% increase, compared with NIS
476.7 million, or 32.6% of total revenues, in Q3 2006.
Financial expenses
in Q3 2007 were
NIS 73.8 million (US$ 18.4 million), compared with NIS 44.7 million in Q3 2006, a 65.0%
increase. The increase is mainly attributed to higher linkage expenses due to the increase
of 2.5% in the CPI level of Q3 2007 compared to an increase in the CPI level of 0.2% in Q3
2006.
Following the ruling of the Supreme
Court, on November 20, 2006 on the matter of Paz Gas Marketing Company Ltd. and others vs.
the assessing officer and others, which overturned the rules regarding the recognition of
financing expenses, the Company has accumulated a provision for taxes in the amount of
approximately NIS 55 million as of September 30, 2007, including a provision of
approximately NIS 12 million for Q3 2007. The accumulated provision is an estimate of the
additional tax expense relating to the possibility that part of the financing expenses
accrued in the years 2005 to 2007 in respect of a financial debt, which is attributable,
inter alia, to the financing of a repurchase of Company shares, will not be recognized as
an expense for tax purposes. On October 28 and 29, 2007, the Israeli Supreme Court issued
two new rulings readdressing the same issue. The Company is currently re-examining the
requirement for this provision in the light of these new rulings.
4
Net income
for Q3 2007 totaled NIS
214.0 million (US$ 53.3 million), representing an increase of 15.9% from NIS 184.7 million
in Q3 2006.
Basic earnings per share
or ADS,
based on the average number of shares outstanding during Q3 2007, was NIS 1.37 (34 US
cents), up by 14.2% from NIS 1.20 in Q3 2006.
Funding and Investing
Review
In Q3 2007,
cash flows generated from
operating activities, net of cash flows from investing activities
totaled NIS 135.3
million (US$ 33.7 million), compared with NIS 312.3 million in Q3 2006, a decrease of
56.7%. The decrease is explained by two main factors. Firstly, because the final day of
both Q3 2006 and Q2 2007 were non-working days, payments to suppliers and interest charges
were deferred to the respective quarters that followed. Secondly, inventories were built
up during Q3 2007 for reasons related to number portability.
Net investment in fixed assets
was
NIS 96.7 million (US$ 24.1 million) in Q3 2007, a decrease of 29.0% from NIS 136.2 million
in Q3 2006.
The Board has approved the
distribution of a
dividend for Q3 2007
of NIS 1.28 (US$ 0.32) per share (in total
approximately NIS 200 million or US$ 50 million) to shareholders and ADS holders
of record on November 21
st
, 2007. The dividend will be paid on December
6
th
, 2007.
Operational Review
The Company’s
active
subscriber base
at the end of the third quarter 2007 was approximately 2,796,000,
including approximately 679,000 business subscribers (24.3% of the base), 1,325,000
postpaid private subscribers (47.4% of the base) and 792,000 prepaid subscribers (28.3%
of the base). Approximately 488,000 subscribers were subscribed to the
3G network.
5
Total
market share
at the end of the
quarter is estimated to be 32%. During the quarter, approximately 62,000
net new
subscribers
joined the Company, including approximately 28,000 business subscribers,
approximately 23,000 postpaid private subscribers and approximately 11,000 prepaid
subscribers. The quarterly
churn rate
decreased from 3.7% in Q3 2006 to 3.3% in Q3 2007.
Most of the churn comes from the prepaid segment.
Average minutes of use per subscriber
(“
MOU
”) was 343 minutes in Q3 2007, compared with 322 minutes in Q3 2006. The
average revenue per user (“
ARPU
”) in Q3 2007 totaled NIS 165 (US$ 41),
marginally highly than NIS 164 in Q3 2006.
Outlook and Guidance
Commenting on the Company’s
results, Mr. Emanuel Avner, Partner’s Chief Financial Officer said: “We are
delighted with the results of the third quarter 2007. Our efforts to increase revenue
potential and improve efficiency are beginning to show through the key financial and
performance indicators. This has enabled us to increase the amount of dividends
distributed to NIS 200 million for this quarter and we continue to offer a strong dividend
yield for the Company’s shareholders.”
Commenting on the Company’s
outlook, Mr. Emanuel Avner said: “We continue to have confidence in our annual
guidance for 2007, bearing in mind that the fourth quarter is seasonally slower than the
third quarter and that the introduction of number portability is expected to increase
marketing expenses over the quarter.”
Conference Call Details
Partner Communications will hold a
conference call to discuss the company’s third quarter results on Wednesday, October
31st, 2007, at 16:00 Israel local time (10AM EST). This conference call will be broadcast
live over the Internet and can be accessed by all interested parties through our investor
relations web site at
http://www.orange.co.il/investor_site/
.
6
To listen to the broadcast, please go
to the web site at least 15 minutes prior to the start of the call to register, download
and install any necessary audio software. For those unable to listen to the live
broadcast, an archive of the call will be available via the Internet (at the same location
as the live broadcast) shortly after the call ends, and until midnight of November 7th,
2007.
About Partner
Communications
Partner Communications Company Ltd.
(“Partner”) is a leading Israeli mobile communications operator providing GSM /
GPRS / UMTS / HSDPA services and wire free applications under the orange™ brand. The
Company provides quality service and a range of features to 2.796 million subscribers in
Israel (as of September 30, 2007). Partner’s ADSs are quoted on the NASDAQ Global
Select Market™ and the London Stock Exchange. Its shares are also traded on the Tel
Aviv Stock Exchange (NASDAQ and TASE: PTNR; LSE: PCCD).
Partner is a subsidiary of Hutchison
Telecommunications International Limited (“Hutchison Telecom”), a leading global
provider of telecommunications services. Hutchison Telecom currently offers mobile and
fixed line telecommunications services in Hong Kong, and operates mobile
telecommunications services in Israel, Macau, Thailand, Sri Lanka, Ghana, Vietnam and
Indonesia. It was the first provider of 3G mobile services in Hong Kong and Israel and
operates brands including “Hutch”, “3" and “orange”.
Hutchison Telecom, a subsidiary of Hutchison Whampoa Limited, is a listed company with
American Depositary Shares quoted on the New York Stock Exchange under the ticker
“HTX” and shares listed on the Stock Exchange of Hong Kong under the stock code
“2332". For more information about Hutchison Telecom, see
www.htil.com
.
For more information about Partner,
see
http://www.orange.co.il/investor_site/
7
Note: 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. We
have based these forward-looking statements on our current expectations and projections
about future events. These forward-looking statements are subject to risks, uncertainties
and assumptions about Partner.
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.
All statements other than statements of historical fact included in this press release
regarding our future performance (including our outlook and guidance for 2007), plans to
increase revenues or margins or preserve or expand market share in existing or new
markets, reduce expenses and any statements regarding other future events or our future
prospects, are forward-looking statements.
|
Because
such statements involve risks and uncertainties, actual results may differ materially
from the results currently expected. Factors that could cause such differences include,
but are not limited to:
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—
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the
effects of the high degree of regulation in the telecommunications market in which we
operate;
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—
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regulatory
developments related to the implementation of number portability;
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—
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regulatory
developments relating to tariffs, including interconnect tariffs, roaming
charges, and SMS tariffs;
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—
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the
difficulties associated with obtaining all permits required for building and operating
of antenna sites;
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|
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—
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the
requirement to indemnify planning committees in respect of claims made against them
relating to the depreciation of property values or to alleged health damage resulting
from antenna sites;
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—
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the
effects of vigorous competition in the market in which we operate and for more valuable
customers, which may decrease prices charged, increase churn and change our customer mix,
profitability and average revenue per user, and the response of competitors to industry
and regulatory developments;
|
|
|
—
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regulatory
developments which permit the Ministry of Communications to require us to offer our
network infrastructure to other operators, which may lower the entry barrier for new
competitors;
|
|
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—
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uncertainties
about the degree of growth in the number of consumers in Israel using wireless personal
communications services and the growth in the Israeli population;
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—
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the
risks associated with the implementation of a third generation (3G) network and business
strategy, including risks relating to the operations of new systems and technologies,
potential unanticipated costs,
|
|
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—
|
uncertainties
regarding the adequacy of suppliers on whom we must rely to provide both network and
consumer equipment and consumer acceptance of the products and services to be offered,
and the risk that the use of internet search engines by our 3G customers will be
restricted;
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—
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the
results of litigation filed or that may be filed against us;
|
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—
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the
risk that, following a possible rearrangement of spectrum, we may lose some of our
frequencies or we may be allocated spectrum of inferior quality;
|
|
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—
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the
risks associated with technological requirements, technology substitution and changes
and other technological developments;
|
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—
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alleged
health risks related to antenna sites and use of telecommunication devices;
|
|
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—
|
the
impact of existing and new competitors in the market in which we compete, including
competitors that may offer less expensive products and services, desirable or innovative
products, technological substitutes, or have extensive resources or better financing;
|
|
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—
|
fluctuations
in foreign exchange rates;
|
|
|
—
|
the
possibility of the market in which we compete being impacted by changes in political,
economic or other factors, such as monetary policy, legal and regulatory changes or other
external factors over which we have no control; and
|
8
|
|
—
|
the
availability and cost of capital and the consequences of increased leverage.
|
as well as the risks discussed in
Risk Factors, Information on the Company and Operating and Financial Review and Prospects
in form 20-F filed with the SEC on June 12, 2007. In light of these risks, uncertainties
and assumptions, the forward-looking events discussed in this report might not occur.
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 preliminary un-audited financial results.
The results were prepared
in accordance with U.S. GAAP, other than EBITDA which is a non-GAAP financial measure.
The convenience translations of
the Nominal New Israeli Shekel (NIS) figures into US Dollars were made at the rate of
exchange prevailing at September 30th, 2007: US $1.00 equals NIS 4.013. The translations
were made purely for the convenience of the reader.
Use of Non-GAAP Financial
Measure:
Earnings before interest, taxes,
depreciation, amortization, exceptional items and capitalization of intangible assets
(‘EBITDA’) is presented because it is a measure commonly used in the
telecommunications industry and is presented solely in order to improve the understanding
of the Company’s operating results and to provide further perspective on these
results. Our management uses EBITDA as a basis for measuring our core operating
performance and comparing such performance to that of prior periods and to the performance
of our competitors. EBITDA, however, should not be considered as an alternative to
operating income or net income for the year as an indicator of the operating performance
of the Company. Similarly, EBITDA should not be considered as an alternative to cash flows
from operating activities as a measure of liquidity. EBITDA is not a measure of financial
performance under generally accepted accounting principles and may not be comparable to
other similarly titled measures for other companies. EBITDA may not be indicative of the
historic operating results of the Company; nor is it meant to be predictive of potential
future results.
9
Reconciliation between our net
cash flow from operating activities and EBIDTA is presented in the attached summary
financial results.
Contacts:
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Mr. Emanuel Avner
|
Oded Degany
|
|
Chief Financial Officer
|
Carrier, Investor and International Relations
|
|
Tel:
|
+972-54-7814951
|
Tel:
|
+972-54-7814151
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|
Fax:
|
+972-54-7815961
|
Fax:
|
+972-54 -7814161
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|
E-mail:
|
emanuel.avner@orange.co.il
|
E-mail:
|
oded.degany@orange.co.il
|
10
PARTNER COMMUNICATIONS
COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED
BALANCE SHEETS
|
|
New Israeli shekels
|
Convenience translation into U.S.
dollars
|
|
|
September 30,
2007
|
December 31,
2006
|
September 30,
2007
|
December 31,
2006
|
|
|
(Unaudited)
|
(Audited)
|
(Unaudited)
|
(Audited)
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I n t h o u s a n d s
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Assets
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|
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|
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|
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|
|
CURRENT ASSETS:
|
|
|
|
Cash and cash equivalents
|
|
|
|
37,460
|
|
|
77,547
|
|
|
9,335
|
|
|
19,324
|
|
|
Accounts receivable:
|
|
|
|
Trade
|
|
|
|
1,090,016
|
|
|
964,309
|
|
|
271,621
|
|
|
240,296
|
|
|
Other
|
|
|
|
97,469
|
|
|
65,533
|
|
|
24,289
|
|
|
16,330
|
|
|
Inventories
|
|
|
|
178,432
|
|
|
126,466
|
|
|
44,463
|
|
|
31,514
|
|
|
Deferred income taxes
|
|
|
|
44,422
|
|
|
40,495
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|
|
11,070
|
|
|
10,091
|
|
|
|
|
|
|
|
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|
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Total current assets
|
|
|
|
1,447,799
|
|
|
1,274,350
|
|
|
360,778
|
|
|
317,555
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENTS AND LONG-TERM RECEIVABLES:
|
|
|
|
Accounts receivables - trade
|
|
|
|
350,706
|
|
|
274,608
|
|
|
87,392
|
|
|
68,429
|
|
|
Funds in respect of employee rights
|
|
|
|
upon retirement
|
|
|
|
85,792
|
|
|
80,881
|
|
|
21,379
|
|
|
20,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
436,498
|
|
|
355,489
|
|
|
108,771
|
|
|
88,584
|
|
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS,
net of accumulated
|
|
|
|
depreciation and amortization
|
|
|
|
1,667,105
|
|
|
1,747,459
|
|
|
415,426
|
|
|
435,450
|
|
|
|
|
|
|
|
|
|
|
|
LICENSE, DEFERRED CHARGES
AND INTANGIBLE ASSETS,
net of amortization
|
|
|
|
1,177,117
|
|
|
1,247,084
|
|
|
293,326
|
|
|
310,761
|
|
|
|
|
|
|
|
|
|
|
|
|
DEFERRED INCOME TAXES
|
|
|
|
95,623
|
|
|
76,139
|
|
|
23,828
|
|
|
18,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,824,142
|
|
|
4,700,521
|
|
|
1,202,129
|
|
|
1,171,323
|
|
|
|
|
|
|
|
|
|
|
|
11
|
|
New Israeli shekels
|
Convenience translation into
U.S. dollars
|
|
|
September 30,
2007
|
December 31,
2006
|
September 30,
2007
|
December 31,
2006
|
|
|
(Unaudited)
|
(Audited)
|
(Unaudited)
|
(Audited)
|
|
|
I n t h o u s a n d s
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
Current maturities of long-term liabilities
|
|
|
|
37,899
|
|
|
40,184
|
|
|
9,444
|
|
|
10,013
|
|
|
Accounts payable and accruals:
|
|
|
|
Trade
|
|
|
|
709,437
|
|
|
690,424
|
|
|
176,785
|
|
|
172,047
|
|
|
Other
|
|
|
|
326,255
|
|
|
281,403
|
|
|
81,299
|
|
|
70,122
|
|
|
Related party - trade
|
|
|
|
1,664
|
|
|
15,830
|
|
|
415
|
|
|
3,945
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
1,075,255
|
|
|
1,027,841
|
|
|
267,943
|
|
|
256,127
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES:
|
|
|
|
Bank loans, net of current maturities
|
|
|
|
|
|
|
272,508
|
|
|
|
|
|
67,906
|
|
|
Notes payable
|
|
|
|
2,072,636
|
|
|
2,016,378
|
|
|
516,480
|
|
|
502,462
|
|
|
Liability for employee rights upon retirement
|
|
|
|
126,953
|
|
|
113,380
|
|
|
31,636
|
|
|
28,253
|
|
|
Other liabilities
|
|
|
|
15,922
|
|
|
15,947
|
|
|
3,968
|
|
|
3,974
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term liabilities
|
|
|
|
2,215,511
|
|
|
2,418,213
|
|
|
552,084
|
|
|
602,595
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
3,290,766
|
|
|
3,446,054
|
|
|
820,027
|
|
|
858,722
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY:
|
|
|
Share capital - ordinary shares of NIS
0.01 par value: authorized - December 31, 2006
and September 30, 2007 - 235,000,000
shares; issued and outstanding - December 31,
2006 154,516,217 shares and September 30,
2007 156,724,677 shares
|
|
|
|
1,567
|
|
|
1,545
|
|
|
391
|
|
|
385
|
|
|
Capital surplus
|
|
|
|
2,523,649
|
|
|
2,452,682
|
|
|
628,868
|
|
|
611,184
|
|
|
Accumulated deficit
|
|
|
|
(991,840
|
)
|
|
(1,199,760
|
)
|
|
(247,157
|
)
|
|
(298,968
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
|
1,533,376
|
|
|
1,254,467
|
|
|
382,102
|
|
|
312,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,824,142
|
|
|
4,700,521
|
|
|
1,202,129
|
|
|
1,171,323
|
|
|
|
|
|
|
|
|
|
|
|
12
PARTNER COMMUNICATIONS
COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
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,
2007
|
3 month
period
ended
September
30,
2007
|
|
|
2007
|
2006
|
2007
|
2006
|
|
|
( U n a u d i t e d )
|
|
|
In thousands (except per share data)
|
|
|
|
|
|
|
|
|
|
REVENUES
- net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services
|
|
|
|
3,966,982
|
|
|
3,745,120
|
|
|
1,401,057
|
|
|
1,316,420
|
|
|
988,532
|
|
|
349,130
|
|
|
Equipment
|
|
|
|
519,293
|
|
|
416,458
|
|
|
199,945
|
|
|
145,569
|
|
|
129,403
|
|
|
49,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,486,275
|
|
|
4,161,578
|
|
|
1,601,002
|
|
|
1,461,989
|
|
|
1,117,935
|
|
|
398,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUES:
|
|
|
|
Services
|
|
|
|
2,315,363
|
|
|
2,311,409
|
|
|
807,540
|
|
|
794,191
|
|
|
576,965
|
|
|
201,232
|
|
|
Equipment
|
|
|
|
695,479
|
|
|
587,319
|
|
|
265,967
|
|
|
210,446
|
|
|
173,307
|
|
|
66,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,010,842
|
|
|
2,898,728
|
|
|
1,073,507
|
|
|
1,004,637
|
|
|
750,272
|
|
|
267,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
|
|
1,475,433
|
|
|
1,262,850
|
|
|
527,495
|
|
|
457,352
|
|
|
367,663
|
|
|
131,446
|
|
|
SELLING AND MARKETING EXPENSES
|
|
|
|
259,801
|
|
|
216,953
|
|
|
86,315
|
|
|
84,124
|
|
|
64,740
|
|
|
21,509
|
|
GENERAL AND
ADMINISTRATIVE
|
|
|
|
EXPENSES
|
|
|
|
157,612
|
|
|
141,362
|
|
|
51,483
|
|
|
53,717
|
|
|
39,275
|
|
|
12,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
417,413
|
|
|
358,315
|
|
|
137,798
|
|
|
137,841
|
|
|
104,015
|
|
|
34,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT
|
|
|
|
1,058,020
|
|
|
904,535
|
|
|
389,697
|
|
|
319,511
|
|
|
263,648
|
|
|
97,108
|
|
|
FINANCIAL EXPENSES
- net
|
|
|
|
132,846
|
|
|
144,515
|
|
|
73,768
|
|
|
44,710
|
|
|
33,104
|
|
|
18,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE TAXES ON
INCOME
|
|
|
|
925,174
|
|
|
760,020
|
|
|
315,929
|
|
|
274,801
|
|
|
230,544
|
|
|
78,726
|
|
|
TAXES ON INCOME
|
|
|
|
287,243
|
|
|
241,725
|
|
|
101,974
|
|
|
90,148
|
|
|
71,578
|
|
|
25,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE
CUMULATIVE EFFECT OF A
|
|
|
|
CHANGE IN ACCOUNTING
|
|
|
|
PRINCIPLES
|
|
|
|
637,931
|
|
|
518,295
|
|
|
213,955
|
|
|
184,653
|
|
|
158,966
|
|
|
53,315
|
|
CUMULATIVE EFFECT, AT
BEGINNING
|
|
|
|
OF YEAR, OF A CHANGE
|
|
|
IN ACCOUNTING
PRINCIPLES
|
|
|
|
|
|
|
1,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME FOR THE
PERIOD
|
|
|
|
637,931
|
|
|
519,307
|
|
|
213,955
|
|
|
184,653
|
|
|
158,966
|
|
|
53,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE
|
|
|
|
("EPS") :
|
|
|
|
Basic:
|
|
|
|
Before cumulative effect
|
|
|
|
4.08
|
|
|
3.38
|
|
|
1.37
|
|
|
1.20
|
|
|
1.02
|
|
|
0.34
|
|
|
Cumulative effect
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.08
|
|
|
3.39
|
|
|
1.37
|
|
|
1.20
|
|
|
1.02
|
|
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
Before cumulative effect
|
|
|
|
4.05
|
|
|
3.36
|
|
|
1.36
|
|
|
1.19
|
|
|
1.01
|
|
|
0.34
|
|
|
Cumulative effect
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.05
|
|
|
3.37
|
|
|
1.36
|
|
|
1.19
|
|
|
1.01
|
|
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES
|
|
|
|
OUTSTANDING:
|
|
|
|
Basic
|
|
|
|
156,213,495
|
|
|
153,391,479
|
|
|
156,683,913
|
|
|
153,916,260
|
|
|
156,213,495
|
|
|
156,683,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
157,579,035
|
|
|
154,266,141
|
|
|
157,883,303
|
|
|
154,740,926
|
|
|
157,579,035
|
|
|
157,883,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
PARTNER COMMUNICATIONS
COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
New Israeli shekels
|
Convenience
translation into
U.S. dollars
|
|
|
9 month period
ended September 30,
|
9 month period
ended
September 30,
2007
|
|
|
2007
|
2006
|
|
|
(Unaudited)
|
|
|
In thousands
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the period
|
|
|
|
637,931
|
|
|
519,307
|
|
|
158,966
|
|
Adjustments to reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and amortization
|
|
|
|
449,643
|
|
|
475,173
|
|
|
112,047
|
|
Amortization of deferred compensation related to employee stock option
grants, net
|
|
|
|
13,179
|
|
|
17,378
|
|
|
3,284
|
|
|
Liability for employee rights upon retirement
|
|
|
|
13,573
|
|
|
8,242
|
|
|
3,382
|
|
Accrued interest and exchange and linkage differences on long-term
liabilities
|
|
|
|
60,147
|
|
|
34,124
|
|
|
14,988
|
|
|
Deferred income taxes
|
|
|
|
(23,411
|
)
|
|
31,096
|
|
|
(5,834
|
)
|
|
Income tax benefit in respect of exercise of option granted to employees
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital loss on sale of fixed assets
|
|
|
|
1,146
|
|
|
318
|
|
|
286
|
|
Cumulative effect, at beginning of year, of a change in accounting
principles
|
|
|
|
|
|
|
(1,012
|
)
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
Increase in accounts receivable:
|
|
|
|
Trade
|
|
|
|
(201,805
|
)
|
|
(223,248
|
)
|
|
(50,288
|
)
|
|
Other
|
|
|
|
(32,957
|
)
|
|
(24,370
|
)
|
|
(8,213
|
)
|
|
Increase (decrease) in accounts payable and accruals:
|
|
|
|
Related Parties
|
|
|
|
(14,166
|
)
|
|
8,890
|
|
|
(3,530
|
)
|
|
Trade
|
|
|
|
106,944
|
|
|
65,105
|
|
|
26,650
|
|
|
Other
|
|
|
|
44,795
|
|
|
(14,428
|
)
|
|
11,162
|
|
|
Decrease (increase) in inventories
|
|
|
|
(51,966
|
)
|
|
53,425
|
|
|
(12,949
|
)
|
|
Increase (decrease) in asset retirement obligations
|
|
|
|
352
|
|
|
895
|
|
|
88
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
1,003,405
|
|
|
950,895
|
|
|
250,039
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
Purchase of fixed assets
|
|
|
|
(387,177
|
)
|
|
(218,970
|
)
|
|
(96,481
|
)
|
|
Acquisition of optic fibers activity
|
|
|
|
(701
|
)
|
|
(71,125
|
)
|
|
(175
|
)
|
|
Purchase of additional spectrum
|
|
|
|
|
|
|
(46,480
|
)
|
|
|
|
|
Proceeds from sale of fixed assets
|
|
|
|
43
|
|
|
34
|
|
|
11
|
|
|
Funds in respect of employee rights upon retirement
|
|
|
|
(4,911
|
)
|
|
(3,150
|
)
|
|
(1,224
|
)
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
(392,746
|
)
|
|
(339,691
|
)
|
|
(97,869
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
Financial lease undertaken
|
|
|
|
7,416
|
|
|
|
|
|
1,848
|
|
|
Repayment of capital lease
|
|
|
|
(6,713
|
)
|
|
(3,620
|
)
|
|
(1,673
|
)
|
|
Proceeds from exercise of stock options granted to employees
|
|
|
|
57,810
|
|
|
30,995
|
|
|
14,406
|
|
|
Dividend Paid
|
|
|
|
(429,955
|
)
|
|
(277,808
|
)
|
|
(107,141
|
)
|
|
Windfall tax benefit in respect of exercise of options granted to employees
|
|
|
|
1,021
|
|
|
|
|
|
254
|
|
|
Repayment of long term bank loans
|
|
|
|
(280,325
|
)
|
|
(360,658
|
)
|
|
(69,854
|
)
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
|
(650,746
|
)
|
|
(611,091
|
)
|
|
(162,160
|
)
|
|
|
|
|
|
|
|
|
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
|
(40,087
|
)
|
|
113
|
|
|
(9,990
|
)
|
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
|
77,547
|
|
|
4,008
|
|
|
19,324
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
|
|
|
37,460
|
|
|
4,121
|
|
|
9,334
|
|
|
|
|
|
|
|
|
|
Supplementary information on
investing not involving cash flows
At September 30, 2007 and 2006, trade
payables include NIS 114 million ($ 30 million) (unaudited) and NIS 202 million
(unaudited) in respect of acquisition of fixed assets, respectively.
These balances will
be given recognition in these statements upon payment.
14
|
|
New Israeli shekels
|
Convenience
translation into
U.S. dollars
|
|
|
9 Month Period Ended
September 30,
|
9 Month Period
Ended September 30,
|
|
|
2007
|
2006
|
2007
|
|
|
(Unaudited)
|
|
|
In thousands
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
1,003,405
|
|
|
950,895
|
|
|
250,039
|
|
|
|
|
|
|
Liability for employee rights upon retirement
|
|
|
|
(13,573
|
)
|
|
(8,242
|
)
|
|
(3,382
|
)
|
Accrued interest and exchange and linkage differences on
long-term liabilities
|
|
|
|
(60,147
|
)
|
|
(34,124
|
)
|
|
(14,988
|
)
|
|
Increase in accounts receivable:
|
|
|
|
Trade
|
|
|
|
201,805
|
|
|
223,248
|
|
|
50,288
|
|
|
Other (excluding tax provision)
|
|
|
|
343,611
|
|
|
234,999
|
|
|
85,624
|
|
|
Decrease (increase) in accounts payable and accruals:
|
|
|
|
Trade
|
|
|
|
(106,944
|
)
|
|
(65,105
|
)
|
|
(26,650
|
)
|
|
Related party - trade
|
|
|
|
14,166
|
|
|
(8,890
|
)
|
|
3,530
|
|
|
Other
|
|
|
|
(44,795
|
)
|
|
14,428
|
|
|
(11,162
|
)
|
|
Increase (decrease) in inventories
|
|
|
|
51,966
|
|
|
(53,425
|
)
|
|
12,949
|
|
|
Increase in Assets Retirement Obligation
|
|
|
|
(352
|
)
|
|
(895
|
)
|
|
(88
|
)
|
|
Financial Expenses
|
|
|
|
124,219
|
|
|
135,558
|
|
|
30,954
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
1,513,361
|
|
|
1,388,447
|
|
|
377,114
|
|
|
|
|
|
|
|
|
|
|
*
|
The
convenience translation of the New Israeli Shekel (NIS) figures into US dollars was made
at the exchange prevailing at September 30, 2007 : US $1.00 equals 4.013 NIS.
|
|
**
|
Financial
expenses excluding any charge for the amortization of pre-launch financial costs.
|
15
PARTNER COMMUNICATIONS
COMPANY LTD.
(An Israeli Corporation)
SUMMARY OPERATING DATA
|
|
Q3 2006
|
Q2 2007
|
Q3 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscribers (in thousands)
|
|
|
|
2,626
|
|
|
2,733
|
|
|
2,796
|
|
|
Estimated share of total Israeli mobile telephone
|
|
|
|
subscribers
|
|
|
|
32
|
%
|
|
32
|
%
|
|
32
|
%
|
|
Churn rate in quarter
|
|
|
|
3.7
|
%
|
|
3.5
|
%
|
|
3.3
|
%
|
|
Average monthly usage in quarter per subscriber
|
|
|
|
(actual minutes use)
|
|
|
|
322
|
|
|
331
|
|
|
343
|
|
Average monthly revenue in year per subscriber, including
in-roaming revenue (NIS)
|
|
|
|
164
|
|
|
157
|
|
|
165
|
|
16
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this Current Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
|
Partner Communications Company Ltd.
By: /s/ Emanuel Avner
——————————————
Emanuel Avner
Chief Financial Officer
|
Dated: October 31, 2007
17
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