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
November 21, 2017
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 ☒ Form 40-F ☐
(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 ☐ No ☒
(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 Statements on Form S-8 filed with the Securities and Exchange Commission on December 4, 2002 (Registration No. 333-101652), September 5, 2006 (Registration No. 333-137102), September 11, 2008 (Registration No. 333-153419), August 17, 2015 (Registration No. 333-206420), November 12, 2015 (Registration No. 333-207946) and on March 14, 2016 (Registration No. 333-210151)
Enclosure: Partner Communications reports third quarter 2017 results
PARTNER COMMUNICATIONS REPORTS
THIRD QUARTER 2017 RESULTS
1
ADJUSTED EBITDA
2
TOTALED NIS 239 MILLION
ADJUSTED FREE CASH FLOW
2
TOTALED NIS 202 MILLION
NET DEBT
2
DECLINED BELOW NIS 1 BILLION TO NIS 887 MILLION
30 THOUSAND HOUSEHOLDS ARE CONNECTED TO PARTNER TV AS OF TODAY
CELLULAR SUBSCRIBERS INCREASE FOR THE SECOND CONSECUTIVE QUARTER
Third quarter 2017 highlights (compared with third quarter 2016)
·
|
Total Revenues:
NIS 826 million (US$ 234 million), a decrease of 3%
|
·
|
Service Revenues:
NIS 666 million (US$ 189 million), a decrease of 5%
|
·
|
Equipment Revenues:
NIS 160 million (US$ 45 million), an increase of 6%
|
·
|
Total Operating Expenses (OPEX
2
):
NIS 477 million (US$ 135 million), a decrease of 16%
|
·
|
Adjusted EBITDA:
NIS 239 million (US$ 68 million), an increase of 9%
|
·
|
Adjusted EBITDA Margin
2
:
29% of total revenues compared with 26%
|
·
|
Profit for the Period:
NIS 54 million (US$ 15 million), an increase of 184%
|
·
|
Net Debt:
NIS 887 million (US$ 251 million), a decrease of NIS 881 million
|
·
|
Adjusted Free Cash Flow (before interest):
NIS 202 million (US$ 57 million), a decrease of NIS 13 million
|
·
|
Cellular ARPU:
NIS 64 (US$ 18), a decrease of 3%
|
·
|
Cellular Subscriber Base:
approximately 2.68 million at quarter-end, a decrease of 1%
|
Rosh Ha’ayin, Israel, November 21, 2017
–
Partner Communications Company Ltd.
(“
Partner
” or the “
Company
”) (NASDAQ and TASE: PTNR), a leading Israeli communications provider, announced today its results for the quarter ended September 30, 2017.
1
The quarterly financial results are unaudited.
2
For the definition of this and other Non-GAAP financial measures, see “Use of Non-GAAP Financial Measures” in this press release
.
Commenting on the third quarter 2017 results, Mr. Isaac Benbenisti, CEO of Partner noted
:
"Our strong entrance to the TV market, together with our significant presence in the internet and cellular markets, establishes Partner as a comprehensive communications group
.
The customer recruitment figures for Partner TV are high compared to our preliminary forecasts. In the last month, the sales rate has increased even more and the number of daily installations has accelerated compared to the period from August through October. In less than a month, we have completed installations in 10,000 additional households and currently the number of households that are already connected to the Partner TV service is approximately 30,000. In addition, thousands of additional households have scheduled installations by the end of the month after they have already completed joining the service. Most of the customers that have joined the TV service have chosen the service as part of our bundle and triple offerings which also includes ISP and internet infrastructure.
As part of our strategic plan as a comprehensive communications group, in August we also announced the commencement of the commercial phase of our independent fiber optic infrastructure project - Partner Fiber - which provides, for the first time, a more advanced and cost-effective alternative to the existing fixed infrastructure in Israel.
Partner's optic fibers have already reached tens of thousands of households throughout the country, and we are working to deploy further at an accelerated rate in several cities simultaneously. In complete alignment with the Ministry of Communications and other regulatory bodies, we will continue to offer the most advanced technology with an attractive value offering to more and more customers.
In the cellular segment we added approximately 33 thousand net Post-Paid subscribers in the last quarter and recorded a net increase in our cellular subscriber base for the second consecutive quarter, despite a decline of approximately 18 thousand Pre-Paid subscribers.”
Mr. Dudu Mizrahi, Partner's Chief Financial Officer,
commented on the third quarter 2017 results:
“In the third quarter, many of the activities that the Company has been engaged in during the last year were reflected, among others, in the growth of 33 thousand Post-Paid cellular subscribers, a continued single digit cellular churn rate, a significant improvement in the equipment sales gross profit margin which stood at 27%, an improvement in the EBITDA margin compared with Q3 2016, and an additional quarter with a strong free cash flow before interest which totaled NIS 202 million.
The increase in CAPEX in the quarter mainly reflected the acceleration of the Company's fiber project, which enables the Company to offer advanced services based on an independent fixed-line infrastructure both to the residential market and the business market, as well as the entrance to the TV market.
In the third quarter the Company early adopted the new International Financial Reporting Standard 15 ("IFRS 15"), retroactively as from January 1, 2017 (the standard is effective from January 1, 2018, earlier application is permitted). The total increase in operating profit and profit for the first three quarters of 2017 amounted to NIS 51 million and NIS 39 million, respectively. The increase in the operating profit and profit for the third quarter 2017 alone amounted to NIS 19 million and NIS 15 million, respectively. The increase is mainly a result of costs capitalization of obtaining contracts with customers (part of payroll expenses and selling commissions).
The financial steps which we executed in the past months, including among others, the early repayments of loans in an amount of approximately NIS 0.9 billion and the raising of a new traded bond series, are reflected in the significant decline in finance expenses compared to Q3 2016. The financial steps, together with the strong free cash flow presented by the Company in the current quarter, resulted in a decline in net debt to below NIS 1 billion – to NIS 887 million.”
NIS Million
|
Q3’17
|
Q2’17
|
Comments
|
Service Revenues
|
666
|
646
|
The increase results mainly from higher cellular seasonal roaming revenues
|
Equipment Revenues
|
160
|
159
|
|
Total Revenues
|
826
|
805
|
|
Gross profit from equipment sales
|
43
|
33
|
|
OPEX
|
477
|
*472
|
Q3 2017 include expenses related to the launch of the Company's TV services
|
Adjusted EBITDA
|
239
|
*269
|
Q2 2017 was the last quarter for which the Company recorded NIS 54 million income with respect to the settlement agreement with Orange. This was partially offset by an increase in service revenues and an increase in gross profit from equipment
|
Profit for the Period
|
54
|
*46
|
|
Capital Expenditures (additions)
|
107
|
*78
|
|
Adjusted free cash flow (before interest payments)
|
202
|
208
|
|
Net Debt
|
887
|
1,081
|
|
*
Figures include the impact of IFRS15 retroactive implementation as from beginning of 2017.
|
Q3’17
|
Q2’17
|
Comments
|
Cellular Post-Paid Subscribers
(end of period, thousands)
|
2,306
|
2,273
|
Increase of 33 thousand subscribers
|
Cellular Pre-Paid Subscribers
(end of period, thousands)
|
371
|
389
|
Decrease of 18 thousand subscribers
|
Monthly Average Revenue per Cellular User (ARPU) (NIS)
|
64
|
62
|
Mainly the result of higher seasonal roaming revenues
|
Quarterly Cellular Churn Rate (%)
|
9.3%
|
9.0%
|
|
Key Financial Results
NIS MILLION (except EPS)
|
Q3'17
|
Q3'16
|
% Change
|
Revenues
|
826
|
849
|
-3%
|
Cost of revenues
|
625
|
691
|
-10%
|
Gross profit
|
201
|
158
|
+27%
|
Operating profit
|
92
|
64
|
+44%
|
Profit for the period
|
54
|
19
|
+184%
|
Earnings per share (basic, NIS)
|
0.32
|
0.12
|
+167%
|
Adjusted free cash flow (before interest)
|
202
|
215
|
-6%
|
Key Operating Indicators
|
Q3'17
|
Q3'16
|
Change
|
Adjusted EBITDA (NIS million)
|
239
|
220
|
+9%
|
Adjusted EBITDA (as a % of total revenues)
|
29%
|
26%
|
+3
|
Cellular Subscribers (end of period, thousands)
|
2,677
|
2,693
|
-16
|
Quarterly Cellular Churn Rate (%)
|
9.3%
|
9.7%
|
-0.4
|
Monthly Average Revenue per Cellular User (ARPU) (NIS)
|
64
|
66
|
-2
|
Partner Consolidated Results
|
Cellular Segment
|
Fixed-Line Segment
|
Elimination
|
Consolidated
|
NIS Million
|
Q3'17
|
Q3'16
|
Change %
|
Q3'17
|
Q3'16
|
Change %
|
Q3'17
|
Q3'16
|
Q3'17
|
Q3'16
|
Change %
|
Total Revenues
|
652
|
670
|
-3%
|
216
|
232
|
-7%
|
(42)
|
(53)
|
826
|
849
|
-3%
|
Service Revenues
|
514
|
531
|
-3%
|
194
|
220
|
-12%
|
(42)
|
(53)
|
666
|
698
|
-5%
|
Equipment Revenues
|
138
|
139
|
-1%
|
22
|
12
|
+83%
|
|
|
160
|
151
|
+6%
|
Operating Profit
|
74
|
36
|
+106%
|
18
|
28
|
-36%
|
|
|
92
|
64
|
+44%
|
Adjusted EBITDA
|
189
|
156
|
+21%
|
50
|
64
|
-22%
|
|
|
239
|
220
|
+9%
|
Financial Review
In Q3 2017,
total revenues
were NIS 826 million (US$
234
million), a decrease of
3
% from NIS 849 million in Q3 2016.
Service revenues
in Q3 2017 totaled NIS 666 million (US$ 189 million), a decrease of 5% from NIS 698 million in Q3 2016.
Service revenues for the cellular segment
in Q3 2017 totaled NIS 514 million (US$ 146 million), a decrease of 3% from NIS 531 million in Q3 2016. The decrease was mainly the result of the continued price erosion of cellular services (both Post-Paid and Pre-Paid) due to the continued competitive market conditions.
Service revenues for the fixed-line segment
in Q3 2017 totaled NIS 194 million (US$ 55 million), a decrease of 12% from NIS 220 million in Q3 2016. The decrease reflected the continuing decrease in revenues from international calls as well as other fixed line services.
Equipment revenues
in Q3 2017 totaled NIS 160 million (US$ 45 million), an increase of 6% from NIS 151 million in Q3 2016, largely reflecting a change in product mix.
Gross profit from equipment
sales
in Q3 2017 was NIS 43 million (US$ 12 million), compared with NIS 28 million in Q3 2016, an increase of 54%, mainly reflecting higher profit margins from sales due to a change in the product mix.
Total operating expenses (‘
OPEX’)
totaled NIS 477 million (US$ 135 million) in Q3 2017, a decrease of 16% or NIS 93 million from Q3 2016. The decrease mainly reflected a decline in expenses related to the cellular network, the implementation of the International Financial Reporting Standard 15 ("IFRS 15"), a nonrecurring decrease in site-rental expenses as well as a decrease in other expenses reflecting the impact of various efficiency measures undertaken as part of a long-term plan to reduce the Company’s cost base, partially offset by additional expenses relating to the Company's TV services which were launched in June 2017. Including depreciation and amortization expenses and other expenses (mainly amortization of employee share based compensation), OPEX in Q3 2017 decreased by 14% compared with Q3 2016.
Operating profit
for Q3 2017 was NIS 92 million (US$ 26 million), an increase of 44% compared with NIS 64 million in Q3 2016.
Adjusted EBITDA
in Q3 2017 totaled NIS 239 million (US$ 68 million), an increase of 9% from NIS 220 million in Q3 2016. As a percentage of total revenues, Adjusted EBITDA in Q3 2017 was 29% compared with 26% in Q3 2016.
Adjusted EBITDA for the cellular segment
was NIS 189 million (US$ 54 million), in Q3 2017, an increase of 21% from NIS 156 million in Q3 2016, reflecting the decrease in OPEX (as explained above) and the increase in gross profit from equipment sales partially offset by the decrease in service revenues and despite the fact that Q3 2017 was the first quarter (since Q2 2015) in which the Company did not record any income with respect to the settlement agreement regarding the Orange brand. As a percentage of total cellular segment revenues, Adjusted EBITDA for the cellular segment in Q3 2017 was 29% compared with 23% in Q3 2016.
Adjusted EBITDA for the fixed-line segment
was NIS 50 million (US$ 14 million) in Q3 2017, a decrease of 22% from NIS 64 million in Q3 2016, reflecting the decrease in service revenues, partially offset by the decrease in OPEX and the increase in gross profit from equipment sales. As a percentage of total fixed-line segment revenues, Adjusted EBITDA for the fixed-line segment in Q3 2017 was 23%, compared with 28% in Q3 2016.
Finance costs, net
in Q3 2017 were NIS 15 million (US$ 4 million), a decrease of 50% compared with NIS 30 million in Q3 201
6
. The decrease largely reflects lower interest expenses due to the lower level of debt as a result of early repayments made in June and July 2017 as well as regular maturities, in addition to lower linkage expenses due to a lower CPI level.
Income taxes
for Q3 2017 were NIS 23 million (US$ 7 million),
compared with NIS 15 million in Q3 2016
.
Profit
in Q3 2017 was NIS 54 million (US$ 15 million), compared with a profit of NIS 19 million in Q3 2016, an increase of 184%.
Based on the weighted average number of shares outstanding during Q3 2017,
basic earnings per share
or ADS, was NIS 0.32 (US$ 0.09), compared to basic earnings per share of NIS 0.12 in Q3 2016.
Cellular Segment Operational Review
At the end of Q3 2017, the Company's
cellular subscriber base
(including mobile data and 012 Mobile subscribers) was approximately 2.68 million including approximately 2.31 million Post-Paid subscribers or 86% of the base, and approximately 371 thousand Pre-Paid subscribers, or 14% of the subscriber base.
During the third quarter of 201
7
, the cellular subscriber base increased by approximately 15 thousand subscribers. The Post-Paid subscriber base increased by approximately 33 thousand subscribers, while the Pre-Paid subscriber base declined by approximately 18 thousand subscribers.
The quarterly
churn rate
for cellular subscribers in Q3 2017 was 9.3%, compared with 9.7% in Q3 2016.
Total
cellular market share
(based on the number of subscribers) at the end of Q3 2017 was estimated to be approximately 26%, unchanged from Q3 2016.
The monthly Average Revenue per User (“
ARPU
”) for cellular subscribers in Q3 2017 was NIS 64 (US$ 18), a decrease of 3% from NIS 66 in Q3 2016. The decrease mainly reflected the continued price erosion in key cellular services due to the persistent competition in the cellular market.
Funding and Investing Review
In Q3 2017,
Adjusted Free Cash Flow
totaled NIS 202 million (US$ 57 million), a decrease of 6% from NIS 215 million in Q3 2016. Excluding the impact of the NIS 35 million payment received from Hot Mobile in Q3 2016, Adjusted Free Cash Flow increased by 12%.
Cash generated from operations
increased by 21% to NIS 306 million (US$ 87 million) in Q3 2017 from NIS 253 million in Q3 2016. The increase mainly reflected the increase in Adjusted EBITDA and the smaller decrease in operating assets and liabilities.
Cash capital expenditures (‘CAPEX payments’)
, as represented by cash flows used for the acquisition of property and equipment and intangible assets, were NIS 105 million (US$ 30 million) in Q3 2017, an increase of 139% from NIS 44 million in Q3 2016. The increase mainly reflected the impact of the implementation of IFRS 15 (capitalization of part of payroll and selling commission expenses) and the increase in investments related to fiber deployment and TV services.
The level of
Net Debt
at the end of Q3 2017 amounted to NIS 887 million (US$ 251 million), compared with NIS 1,768 million at the end of Q3 2016.
Business Developments
The Company's Board of Directors approved on November 20, 2017 the appointment of Mr. Tomer Bar Zeev as a member to the Company's Board of Directors. Mr. Tomer Bar Zeev was nominated by S.B. Israel Telecom Ltd., the Company's principal shareholder. In accordance with the Company's Articles of Association and applicable law, Mr. Bar Zeev shall serve in office until the coming Annual General Meeting of shareholders.
Mr. Bar Zeev is the founder and CEO of ironSource since 2010, a leading digital content company that offers monetization and distribution solutions for app developers, software developers, mobile carriers, and device manufacturers. Mr. Bar Zeev holds a BA in computer science from IDC Herziliya.
An active investor in other technology startups, Mr. Bar Zeev has a deep understanding of companies in the telecommunication and technology fields.
Regulatory Developments
In August 2015, the Ministry of Communications' regulation regarding access to Bezeq's passive infrastructure came into force. The purpose of this regulation is to allow other licensees to use Bezeq's passive infrastructure (such as ducts, manholes, poles, boxes etc.) in order to deploy their own high speed fiber optical cables. According to the Ministry's temporary instructions at the time (which was in force until November 1, 2015), any work inside Bezeq's passive infrastructure was to be performed by Bezeq's employees. Although the interim period has since passed, the Ministry of Communications did not effectively enforce its abovementioned decision on Bezeq.
Following the enactment of the Economic Program Law for the years 2017-2018 (which set Bezeq's obligation to allow access to its passive infrastructure into law), Bezeq has begun to partially observe its duty to provide access to its passive infrastructures. Bezeq has deployed several fiber optic cables for licensees using its own personnel.
On October 19, 2017, the Ministry of Communications instructed Bezeq to allow other domestic operators (including Partner) to deploy fiber optic cables with their own contractors (without the need for the use of Bezeq personnel). This change has the potential to substantially increase the speed of deployment of Partner's fiber infrastructure.
IFRS 15
In the third quarter of 2017 the Company early adopted (the standard is effective from January 1, 2018, earlier application is permitted), as from January 1, 2017 (the transition date), IFRS 15, Revenue from Contracts with Customers, which outlines a single comprehensive model of accounting for revenue arising from contracts with customers and supersedes IAS 18, Revenue, and IAS 11, Construction contracts (the "previous standards"). The model includes five steps for analyzing transactions so as to determine when to recognize revenue and at what amount:
|
1)
|
Identifying the contract with the customer
.
|
|
2)
|
Identifying separate performance obligations in the contract
.
|
|
3)
|
Determining the transaction price
.
|
|
4)
|
Allocating the transaction price to separate performance obligations
.
|
|
5)
|
Recognizing revenue when the performance obligations are satisfied.
|
In accordance with the model, the Company recognizes revenue when the customer obtains control over the goods or services. Revenue is based on the consideration that the Company expects to receive for the transfer of the goods or services promised to the customer, excluding amounts collected on behalf of third parties, and where collection is probable.
The Company applied IFRS 15 using the cumulative effect approach as from the transition date, without a restatement of comparative figures
.
As part of the initial implementation of IFRS 15, the Company has chosen to apply the expedients in the transitional provisions, according to which the cumulative effect approach is applied only for contracts not yet complete at the transition date, and therefore there is no change in the accounting treatment for contracts completed at the transition date. The Company also applied the practical expedient of examining the aggregate effect of contracts changes that occurred before the transition date, instead of examining each change separately. Contracts that are renewed on a monthly basis and may be cancelled by the customer at any time, without penalty, were considered completed contracts at the transition date. The cumulative effect as of the transition date was immaterial and did not affect the financial statements.
The application of IFRS 15 did not have a material effect on the measurement and timing of the Company’s revenue in the reporting period, compared to the provisions of the previous standards.
The main effect of the Company’s application of IFRS 15 is the accounting treatment for the incremental costs of obtaining contracts with customers, which in accordance with IFRS 15, are recognized as assets when the costs are incremental to obtaining the contracts, and it is probable that the Company will recover these costs, instead of recognizing these costs in the statement of income as incurred. IFRS 15 also determines that direct costs of fulfilling a contract which the Company can specifically identify and which produce or improve the Company’s resources that are used for its future performance obligation (and it is probable that the Company will recover these costs) are recognized as assets (the incremental and direct costs together: "contract costs"). Contract costs that were recognized as assets are presented in the statements of cash flows as part of cash flows used in investing activities.
Direct commissions paid to resellers and sales employees for sales and upgrades, are recognized as an asset for obtaining a contract instead of an expense in the statement of income. The assets are amortized in accordance with the expected service period (mainly over 2 to 3 years), using the portfolio approach.
For the effect of IFRS 15 on the financial reports, see also the section, 'Effect of IFRS15 implementation' in this press release.
Conference Call Details
Partner will hold a conference call on Tuesday, November 21, 2017 at 10.00AM Eastern Time / 5.00PM Israel Time
.
To join the call, please dial the following numbers (at least 10 minutes before the scheduled time):
International: +972.3.918.0687
North America toll-free: +1.866.860.9642
A live webcast of the call will also be available on Partner's Investors Relations website at: www.partner.co.il/en/Investors-Relations/lobby/
If you are unavailable to join live, the replay of the call will be available from
November 21, 2017 until December 12, 2017, at the following numbers:
International: +972.3.925.5940
North America toll-free: +1.877.456.0009
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 "estimate", “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
.
Specific statements have been made regarding the Company's anticipated acceleration of the deployment of its fiber optic infrastructure. In addition, all statements other than statements of historical fact included in this press release regarding our future performance 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, including, as regards the anticipated acceleration of fiber cable deployment, whether the
Ministry of Communications’ instruction to Bezeq to allow other domestic operators (including Partner) to deploy fiber optic cables with their own contractors (without the need for the use of Bezeq personnel) will be respected or enforced and whether the Company will have the financial resources needed to continue to increase the number of customers served by its fiber optic infrastructure. The 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 immediate 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 quarterly financial results presented in this press release are unaudited financial results.
The results were prepared in accordance with IFRS, other than the non-GAAP financial measures presented in the section, “Use of 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, 2017: US $1.00 equals NIS 3.529. The translations were made purely for the convenience of the reader.
Use of Non-GAAP Financial Measures
The following non-GAAP measures are used in this report. These measures are not financial measures under IFRS and may not be comparable to other similarly titled measures for other companies. Further, the measures may not be indicative of the Company’s historic operating results nor are meant to be predictive of potential future results.
Non-GAAP Measure
|
Calculation
|
Most Comparable IFRS Financial Measure
|
Adjusted EBITDA*
|
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)
|
Profit (Loss)
|
Adjusted EBITDA margin (%)
|
Adjusted EBITDA margin (%):
Adjusted EBITDA
divided by
Total revenues
|
|
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.
About Partner Communications
Partner Communications Company Ltd. is a leading Israeli provider of telecommunications services (cellular, fixed-line telephony, internet services and television services). 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: http://www.partner.co.il/en/Investors-Relations/lobby
Contacts:
Dudu Mizrahi
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
|
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
Convenience
translation
into
U.S. Dollars
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
(Unaudited)
|
|
|
|
In millions
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
1,010
|
|
|
|
716
|
|
|
|
286
|
|
Short-term deposits
|
|
|
150
|
|
|
|
452
|
|
|
|
43
|
|
Trade receivables
|
|
|
819
|
|
|
|
990
|
|
|
|
232
|
|
Other receivables and prepaid expenses
|
|
|
62
|
|
|
|
57
|
|
|
|
18
|
|
Deferred expenses – right of use
|
|
|
40
|
|
|
|
28
|
|
|
|
11
|
|
Inventories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
228
|
|
|
|
333
|
|
|
|
65
|
|
Prepaid expenses and other
|
|
|
2
|
|
|
|
2
|
|
|
|
1
|
|
Deferred expenses – right of use
|
|
|
121
|
|
|
|
75
|
|
|
|
34
|
|
Property and equipment
|
|
|
1,128
|
|
|
|
1,207
|
|
|
|
320
|
|
Intangible and other assets
|
|
|
716
|
|
|
|
793
|
|
|
|
203
|
|
Goodwill
|
|
|
407
|
|
|
|
407
|
|
|
|
115
|
|
Deferred income tax asset
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
Convenience
translation
into
U.S. Dollars
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
(Unaudited)
|
|
|
|
In millions
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
Current maturities of notes payable and borrowings
|
|
|
557
|
|
|
|
498
|
|
|
|
158
|
|
Trade payables
|
|
|
702
|
|
|
|
681
|
|
|
|
199
|
|
Payables in respect of employees
|
|
|
51
|
|
|
|
101
|
|
|
|
14
|
|
Other payables (mainly institutions)
|
|
|
28
|
|
|
|
28
|
|
|
|
8
|
|
Income tax payable
|
|
|
83
|
|
|
|
45
|
|
|
|
23
|
|
Deferred income with respect to settlement
|
|
|
|
|
|
|
|
|
|
|
|
|
agreement with Orange
|
|
|
|
|
|
|
108
|
|
|
|
|
|
Deferred revenues from HOT mobile
|
|
|
31
|
|
|
|
31
|
|
|
|
9
|
|
Other deferred revenues
|
|
|
42
|
|
|
|
38
|
|
|
|
12
|
|
Provisions
|
|
|
78
|
|
|
|
77
|
|
|
|
22
|
|
|
|
|
1,572
|
|
|
|
1,607
|
|
|
|
445
|
|
NON CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable
|
|
|
899
|
|
|
|
646
|
|
|
|
255
|
|
Borrowings from banks and others
|
|
|
591
|
|
|
|
1,550
|
|
|
|
167
|
|
Liability for employee rights upon retirement, net
|
|
|
36
|
|
|
|
39
|
|
|
|
11
|
|
Dismantling and restoring sites obligation
|
|
|
28
|
|
|
|
35
|
|
|
|
8
|
|
Deferred revenues from HOT mobile
|
|
|
172
|
|
|
|
195
|
|
|
|
49
|
|
Other non-current liabilities
|
|
|
21
|
|
|
|
14
|
|
|
|
6
|
|
|
|
|
1,747
|
|
|
|
2,479
|
|
|
|
496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
3,319
|
|
|
|
4,086
|
|
|
|
941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital - ordinary shares of NIS 0.01
par value: authorized - December 31, 2016
and September 30, 2017 - 235,000,000 shares;
issued and outstanding -
|
|
|
2
|
|
|
|
2
|
|
|
|
1
|
|
December 31, 2016 – *156,993,337 shares
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017 – *167,527,166 shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital surplus
|
|
|
1,199
|
|
|
|
1,034
|
|
|
|
340
|
|
Accumulated retained earnings
|
|
|
538
|
|
|
|
358
|
|
|
|
152
|
|
Treasury shares, at cost
December 31, 2016 – **3,603,578 shares
September 30, 2017 – **3,296,619 shares
|
|
|
(258
|
)
|
|
|
(283
|
)
|
|
|
(73
|
)
|
TOTAL EQUITY
|
|
|
1,481
|
|
|
|
1,111
|
|
|
|
420
|
|
TOTAL LIABILITIES AND EQUITY
|
|
|
4,800
|
|
|
|
5,197
|
|
|
|
1,361
|
|
* Net of treasury shares.
**
Including, restricted shares in amount of 2,008,584 and 2,061,201 as of September 30, 2017 and December 31, 2016 respectively held by trustee under the Company's Equity Incentive Plan, such shares will become outstanding upon completion of vesting conditions.
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
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,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions (except per share data)
|
|
Revenues, net
|
|
|
2,434
|
|
|
|
2,723
|
|
|
|
826
|
|
|
|
849
|
|
|
|
690
|
|
|
|
234
|
|
Cost of revenues
|
|
|
1,916
|
|
|
|
2,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
518
|
|
|
|
505
|
|
|
|
201
|
|
|
|
158
|
|
|
|
147
|
|
|
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing expenses
|
|
|
189
|
|
|
|
330
|
|
|
|
70
|
|
|
|
98
|
|
|
|
54
|
|
|
|
20
|
|
General and administrative expenses
|
|
|
146
|
|
|
|
188
|
|
|
|
46
|
|
|
|
60
|
|
|
|
41
|
|
|
|
13
|
|
Income with respect to settlement agreement with Orange
|
|
|
108
|
|
|
|
163
|
|
|
|
|
|
|
|
55
|
|
|
|
30
|
|
|
|
|
|
Other income, net
|
|
|
24
|
|
|
|
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
|
315
|
|
|
|
185
|
|
|
|
92
|
|
|
|
64
|
|
|
|
89
|
|
|
|
26
|
|
Finance income
|
|
|
4
|
|
|
|
10
|
|
|
|
5
|
|
|
|
*
|
|
|
|
1
|
|
|
|
1
|
|
Finance expenses
|
|
|
96
|
|
|
|
92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance costs, net
|
|
|
92
|
|
|
|
82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before income tax
|
|
|
223
|
|
|
|
103
|
|
|
|
77
|
|
|
|
34
|
|
|
|
63
|
|
|
|
22
|
|
Income tax expenses
|
|
|
59
|
|
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
164
|
|
|
|
59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1.02
|
|
|
|
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
1.01
|
|
|
|
0.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
161,002
|
|
|
|
156,120
|
|
|
|
|
|
|
|
|
|
|
|
161,002
|
|
|
|
|
|
Diluted
|
|
|
162,745
|
|
|
|
157,925
|
|
|
|
|
|
|
|
|
|
|
|
162,745
|
|
|
|
|
|
* Representing an amount of less than 1 million.
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
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,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
164
|
|
|
|
59
|
|
|
|
54
|
|
|
|
19
|
|
|
|
46
|
|
|
|
15
|
|
Other comprehensive income
for the period, net of income tax
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
|
|
|
|
|
|
|
59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM SEGMENT INFORMATION & ADJUSTED EBITDA RECONCILIATION
|
|
New Israeli Shekels
|
|
|
New Israeli Shekels
|
|
|
|
Nine months ended September 30, 2017
|
|
|
Nine months ended September 30, 2016
|
|
|
|
In millions (Unaudited)
|
|
|
In millions (Unaudited)
|
|
|
|
Cellular segment
|
|
|
Fixed line segment
|
|
|
Reconciliation
for
consolidation
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
Reconciliation
for
consolidation
|
|
|
Consolidated
|
|
Segment revenue -
Services
|
|
|
1,487
|
|
|
|
465
|
|
|
|
|
|
|
1,952
|
|
|
|
1,586
|
|
|
|
514
|
|
|
|
|
|
|
2,100
|
|
Inter-segment revenue - Services
|
|
|
13
|
|
|
|
115
|
|
|
|
(128
|
)
|
|
|
|
|
|
|
15
|
|
|
|
147
|
|
|
|
(162
|
)
|
|
|
|
|
Segment revenue - Equipment
|
|
|
428
|
|
|
|
54
|
|
|
|
|
|
|
|
482
|
|
|
|
571
|
|
|
|
52
|
|
|
|
|
|
|
|
623
|
|
Total revenues
|
|
|
1,928
|
|
|
|
634
|
|
|
|
(128
|
)
|
|
|
2,434
|
|
|
|
2,172
|
|
|
|
713
|
|
|
|
(162
|
)
|
|
|
2,723
|
|
Segment cost of revenues – Services
|
|
|
1,093
|
|
|
|
443
|
|
|
|
|
|
|
|
1,536
|
|
|
|
1,261
|
|
|
|
460
|
|
|
|
|
|
|
|
1,721
|
|
Inter-segment cost of revenues- Services
|
|
|
114
|
|
|
|
14
|
|
|
|
(128
|
)
|
|
|
|
|
|
|
146
|
|
|
|
16
|
|
|
|
(162
|
)
|
|
|
|
|
Segment cost of revenues - Equipment
|
|
|
342
|
|
|
|
38
|
|
|
|
|
|
|
|
380
|
|
|
|
454
|
|
|
|
43
|
|
|
|
|
|
|
|
497
|
|
Cost of revenues
|
|
|
1,549
|
|
|
|
495
|
|
|
|
(128
|
)
|
|
|
1,916
|
|
|
|
1,861
|
|
|
|
519
|
|
|
|
(162
|
)
|
|
|
2,218
|
|
Gross profit
|
|
|
379
|
|
|
|
139
|
|
|
|
|
|
|
|
518
|
|
|
|
311
|
|
|
|
194
|
|
|
|
|
|
|
|
505
|
|
Operating expenses (3)
|
|
|
268
|
|
|
|
67
|
|
|
|
|
|
|
|
335
|
|
|
|
428
|
|
|
|
90
|
|
|
|
|
|
|
|
518
|
|
Income with respect to settlement
agreement with Orange
|
|
|
108
|
|
|
|
|
|
|
|
|
|
|
|
108
|
|
|
|
163
|
|
|
|
|
|
|
|
|
|
|
|
163
|
|
Other income, net
|
|
|
23
|
|
|
|
1
|
|
|
|
|
|
|
|
24
|
|
|
|
32
|
|
|
|
3
|
|
|
|
|
|
|
|
35
|
|
Operating profit
|
|
|
242
|
|
|
|
73
|
|
|
|
|
|
|
|
315
|
|
|
|
78
|
|
|
|
107
|
|
|
|
|
|
|
|
185
|
|
Adjustments to presentation of segment Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
–Depreciation and amortization
|
|
|
327
|
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
338
|
|
|
|
110
|
|
|
|
|
|
|
|
|
|
–Other (1)
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA (2)
|
|
|
586
|
|
|
|
173
|
|
|
|
|
|
|
|
|
|
|
|
453
|
|
|
|
217
|
|
|
|
|
|
|
|
|
|
Reconciliation of segment subtotal
Adjusted EBITDA to
profit for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segments subtotal Adjusted EBITDA (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
670
|
|
- Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(427
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(448
|
)
|
- Finance costs, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(92
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(82
|
)
|
- Income tax expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(59
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(44
|
)
|
- Other (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(17
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(37
|
)
|
Profit for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59
|
|
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM SEGMENT INFORMATION & ADJUSTED EBITDA RECONCILIATION
|
|
New Israeli Shekels
|
|
|
New Israeli Shekels
|
|
|
|
Three months ended September 30, 2017
|
|
|
Three months ended September 30, 2016
|
|
|
|
In millions (Unaudited)
|
|
|
In millions (Unaudited)
|
|
|
|
Cellular segment
|
|
|
Fixed line segment
|
|
|
Reconciliation
for
consolidation
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
Reconciliation
for
consolidation
|
|
|
Consolidated
|
|
Segment revenue - Services
|
|
|
510
|
|
|
|
156
|
|
|
|
|
|
|
666
|
|
|
|
526
|
|
|
|
172
|
|
|
|
|
|
|
698
|
|
Inter-segment revenue - Services
|
|
|
4
|
|
|
|
38
|
|
|
|
(42
|
)
|
|
|
|
|
|
|
5
|
|
|
|
48
|
|
|
|
(53
|
)
|
|
|
|
|
Segment revenue - Equipment
|
|
|
138
|
|
|
|
22
|
|
|
|
|
|
|
|
160
|
|
|
|
139
|
|
|
|
12
|
|
|
|
|
|
|
|
151
|
|
Total revenues
|
|
|
652
|
|
|
|
216
|
|
|
|
(42
|
)
|
|
|
826
|
|
|
|
670
|
|
|
|
232
|
|
|
|
(53
|
)
|
|
|
849
|
|
Segment cost of revenues – Services
|
|
|
358
|
|
|
|
150
|
|
|
|
|
|
|
|
508
|
|
|
|
410
|
|
|
|
158
|
|
|
|
|
|
|
|
568
|
|
Inter-segment cost of revenues- Services
|
|
|
38
|
|
|
|
4
|
|
|
|
(42
|
)
|
|
|
|
|
|
|
48
|
|
|
|
5
|
|
|
|
(53
|
)
|
|
|
|
|
Segment cost of revenues - Equipment
|
|
|
102
|
|
|
|
15
|
|
|
|
|
|
|
|
117
|
|
|
|
112
|
|
|
|
11
|
|
|
|
|
|
|
|
123
|
|
Cost of revenues
|
|
|
498
|
|
|
|
169
|
|
|
|
(42
|
)
|
|
|
625
|
|
|
|
570
|
|
|
|
174
|
|
|
|
(53
|
)
|
|
|
691
|
|
Gross profit
|
|
|
154
|
|
|
|
47
|
|
|
|
|
|
|
|
201
|
|
|
|
100
|
|
|
|
58
|
|
|
|
|
|
|
|
158
|
|
Operating expenses (3)
|
|
|
87
|
|
|
|
29
|
|
|
|
|
|
|
|
116
|
|
|
|
127
|
|
|
|
31
|
|
|
|
|
|
|
|
158
|
|
Income with respect to settlement
agreement with Orange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
|
55
|
|
Other income, net
|
|
|
7
|
|
|
|
*
|
|
|
|
|
|
|
|
7
|
|
|
|
8
|
|
|
|
1
|
|
|
|
|
|
|
|
9
|
|
Operating profit
|
|
|
74
|
|
|
|
18
|
|
|
|
|
|
|
|
92
|
|
|
|
36
|
|
|
|
28
|
|
|
|
|
|
|
|
64
|
|
Adjustments to presentation of segment Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
–Depreciation and amortization
|
|
|
109
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
108
|
|
|
|
35
|
|
|
|
|
|
|
|
|
|
–Other (1)
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA (2)
|
|
|
189
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
156
|
|
|
|
64
|
|
|
|
|
|
|
|
|
|
Reconciliation of segment
subtotal Adjusted EBITDA
to profit for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segments subtotal Adjusted EBITDA (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
220
|
|
- Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(141
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
143
|
)
|
- Finance costs, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(30
|
)
|
- Income tax expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
15
|
)
|
- Other (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13
|
)
|
Profit for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
|
* Representing an amount of less than 1 million.
(1) Mainly amortization of employee share based compensation.
(2) Adjusted EBITDA as reviewed by the CODM represents Earnings Before Interest (finance costs, net), Taxes, Depreciation and Amortization (including amortization of intangible assets, deferred expenses-right of use and impairment charges) and Other expenses (mainly amortization of share based compensation). Adjusted EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for 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 amortization of employee share based compensation and impairment charges; it is fully comparable to EBITDA information which has been previously provided for prior periods.
(3) Operating expenses include selling and marketing expenses and general and administrative expenses.
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
Convenience
translation
into
U.S. Dollars
|
|
|
|
9 months ended
September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
In millions
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Cash generated from operations (Appendix)
|
|
|
804
|
|
|
|
652
|
|
|
|
227
|
|
Income tax paid
|
|
|
(7
|
)
|
|
|
(20
|
)
|
|
|
(2
|
)
|
Net cash provided by operating activities
|
|
|
|
|
|
|
632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment
|
|
|
(146
|
)
|
|
|
(
97
|
)
|
|
|
(41
|
)
|
Acquisition of intangible and other assets
|
|
|
(117
|
)
|
|
|
(52
|
)
|
|
|
(33
|
)
|
Proceeds from (investment in) short-term deposits, net
|
|
|
302
|
|
|
|
|
|
|
|
85
|
|
Interest received
|
|
|
2
|
|
|
|
2
|
|
|
|
1
|
|
Consideration received from sales of property and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
|
|
|
|
(143
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Share issuance
|
|
|
190
|
|
|
|
|
|
|
|
54
|
|
Interest paid
|
|
|
(85
|
)
|
|
|
(
80
|
)
|
|
|
(24
|
)
|
Current borrowings received
|
|
|
|
|
|
|
52
|
|
|
|
|
|
Repayment of non-current borrowings
|
|
|
(901
|
)
|
|
|
(11
|
)
|
|
|
(255
|
)
|
Proceeds from issuance of notes payable, net of issuance costs
|
|
|
252
|
|
|
|
|
|
|
|
71
|
|
Repayment of notes payable
|
|
|
|
|
|
|
(235
|
)
|
|
|
|
|
Net cash used in financing activities
|
|
|
(544
|
)
|
|
|
(274
|
)
|
|
|
(154
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCREASE IN CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
|
|
|
|
|
|
|
|
|
|
|
|
* Representing an amount of less than 1 million.
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Appendix - Cash generated from operations and supplemental information
|
|
|
|
|
Convenience
translation
into
U.S. Dollars
|
|
|
|
9 months ended
September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
In millions
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations:
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
164
|
|
|
|
59
|
|
|
|
46
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
399
|
|
|
|
427
|
|
|
|
113
|
|
Amortization of deferred expenses - Right of use
|
|
|
28
|
|
|
|
21
|
|
|
|
8
|
|
Employee share based compensation expenses
|
|
|
16
|
|
|
|
36
|
|
|
|
5
|
|
Liability for employee rights upon retirement, net
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
(1
|
)
|
Finance costs, net
|
|
|
(3
|
)
|
|
|
2
|
|
|
|
(1
|
)
|
Change in fair value of derivative financial instruments
|
|
|
(1
|
)
|
|
|
*
|
|
|
|
*
|
|
Capital loss from property and equipment
|
|
|
*
|
|
|
|
1
|
|
|
|
*
|
|
Interest paid
|
|
|
85
|
|
|
|
80
|
|
|
|
24
|
|
Interest received
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(1
|
)
|
Deferred income taxes
|
|
|
14
|
|
|
|
12
|
|
|
|
4
|
|
Income tax paid
|
|
|
7
|
|
|
|
20
|
|
|
|
2
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase)in accounts receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
|
276
|
|
|
|
122
|
|
|
|
78
|
|
Other
|
|
|
(5
|
)
|
|
|
8
|
|
|
|
(1
|
)
|
Increase (decrease) in accounts payable and accruals:
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
|
45
|
|
|
|
(3
|
)
|
|
|
13
|
|
Other payables
|
|
|
(49
|
)
|
|
|
(38
|
)
|
|
|
(14
|
)
|
Provisions
|
|
|
1
|
|
|
|
(6
|
)
|
|
|
*
|
|
Deferred income with respect to settlement agreement with Orange
|
|
|
(108
|
)
|
|
|
(163
|
)
|
|
|
(31
|
)
|
Deferred revenues from HOT mobile
|
|
|
(23
|
)
|
|
|
54
|
|
|
|
(7
|
)
|
Other deferred revenues
|
|
|
5
|
|
|
|
6
|
|
|
|
1
|
|
Increase in deferred expenses - Right of use
|
|
|
(86
|
)
|
|
|
(52
|
)
|
|
|
(24
|
)
|
Current income tax liability
|
|
|
38
|
|
|
|
11
|
|
|
|
11
|
|
Decrease in inventories
|
|
|
|
|
|
|
60
|
|
|
|
|
|
Cash generated from operations
|
|
|
|
|
|
|
|
|
|
|
|
|
* Representing an amount of less than 1 million.
At September 30, 2017 and 2016, trade and other payables include NIS 102 million ($29 million) and NIS 96 million, respectively, in respect of acquisition of intangible assets and property and equipment; payments in respect thereof are presented in cash flows from investing activities.
These balances are recognized in the cash flow statements upon payment.
Effect of IFRS15 implementation:
The tables below summarize the effects on the interim condensed consolidated statement of financial position as at September 30, 2017 and on the interim condensed consolidated statements of income and cash flows for the nine and three months periods ended as of the same date.
Effect of change on interim condensed consolidated statement of financial position:
|
|
New Israeli Shekels in millions
|
|
|
|
As of September 30, 2017
|
|
|
|
Previous
accounting policy
|
|
|
Effect of
change
|
|
|
According
to IFRS15
|
|
|
|
(Unaudited)
|
|
Costs to obtain contracts recognized in intangible assets, net – non-current assets
|
|
|
-
|
|
|
|
51
|
|
|
|
51
|
|
Deferred income tax asset
|
|
|
39
|
|
|
|
(12
|
)
|
|
|
27
|
|
Equity
|
|
|
1,442
|
|
|
|
39
|
|
|
|
1,481
|
|
Effect of change on interim condensed consolidated statement of income:
|
|
New Israeli Shekels in millions
|
|
|
|
Nine months ended September 30, 2017
|
|
|
Three months ended September 30, 2017
|
|
|
|
Previous
accounting
policy
|
|
|
Effect of
change
|
|
|
According
to IFRS15
|
|
|
Previous
accounting
policy
|
|
|
Effect of
change
|
|
|
According
to IFRS15
|
|
|
|
(Unaudited)
|
|
Selling and marketing expenses
|
|
|
240
|
|
|
|
(51
|
)
|
|
|
189
|
|
|
|
89
|
|
|
|
(19
|
)
|
|
|
70
|
|
Operating profit
|
|
|
264
|
|
|
|
51
|
|
|
|
315
|
|
|
|
73
|
|
|
|
19
|
|
|
|
92
|
|
Profit before income tax
|
|
|
172
|
|
|
|
51
|
|
|
|
223
|
|
|
|
58
|
|
|
|
19
|
|
|
|
77
|
|
Income tax expenses
|
|
|
47
|
|
|
|
12
|
|
|
|
59
|
|
|
|
19
|
|
|
|
4
|
|
|
|
23
|
|
Profit for the period
|
|
|
125
|
|
|
|
39
|
|
|
|
164
|
|
|
|
39
|
|
|
|
15
|
|
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
422
|
|
|
|
5
|
|
|
|
427
|
|
|
|
138
|
|
|
|
3
|
|
|
|
141
|
|
Effect of change on interim condensed consolidated statement cash flows:
|
|
New Israeli Shekels in millions
|
|
|
|
Nine months ended September 30, 2017
|
|
|
Three months ended September 30, 2017
|
|
|
|
Previous
accounting
policy
|
|
|
Effect of
change
|
|
|
According to
IFRS15
|
|
|
Previous
accounting
policy
|
|
|
Effect of
change
|
|
|
According
to IFRS15
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
746
|
|
|
|
51
|
|
|
|
797
|
|
|
|
286
|
|
|
|
20
|
|
|
|
306
|
|
Net cash provided by (used in) investing activities
|
|
|
92
|
|
|
|
(51
|
)
|
|
|
41
|
|
|
|
(234
|
)
|
|
|
(20
|
)
|
|
|
(254
|
)
|
Reconciliation of Non-GAAP Measures:
Adjusted Free Cash Flow
|
|
|
|
|
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,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
In millions
|
|
Net cash provided by operating activities
|
|
|
797
|
|
|
|
632
|
|
|
|
306
|
|
|
|
253
|
|
|
|
225
|
|
|
|
87
|
|
Net cash used in investing activities
|
|
|
41
|
|
|
|
(143
|
)
|
|
|
(254
|
)
|
|
|
(38
|
)
|
|
|
12
|
|
|
|
(72
|
)
|
Proceeds from (investment in) short-term deposits
|
|
|
(302
|
)
|
|
|
|
|
|
|
150
|
|
|
|
|
|
|
|
(85
|
)
|
|
|
43
|
|
Adjusted Free Cash Flow
|
|
|
536
|
|
|
|
489
|
|
|
|
202
|
|
|
|
215
|
|
|
|
152
|
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
(85
|
)
|
|
|
(80
|
)
|
|
|
(10
|
)
|
|
|
(14
|
)
|
|
|
(24
|
)
|
|
|
(3
|
)
|
Adjusted Free Cash Flow After Interest
|
|
|
451
|
|
|
|
409
|
|
|
|
192
|
|
|
|
201
|
|
|
|
128
|
|
|
|
55
|
|
Total Operating Expenses (OPEX)
|
|
|
|
|
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,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2017
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
In millions
|
|
Cost of revenues – Services
|
|
|
1,536
|
|
|
|
1,721
|
|
|
|
508
|
|
|
|
568
|
|
|
|
435
|
|
|
|
144
|
|
Selling and marketing expenses
|
|
|
189
|
|
|
|
330
|
|
|
|
70
|
|
|
|
98
|
|
|
|
54
|
|
|
|
20
|
|
General and administrative expenses
|
|
|
146
|
|
|
|
188
|
|
|
|
46
|
|
|
|
60
|
|
|
|
41
|
|
|
|
13
|
|
Depreciation and amortization
|
|
|
(427
|
)
|
|
|
(448
|
)
|
|
|
(141
|
)
|
|
|
(143
|
)
|
|
|
(121
|
)
|
|
|
(40
|
)
|
Other (1)
|
|
|
(17
|
)
|
|
|
(37
|
)
|
|
|
(6
|
)
|
|
|
(13
|
)
|
|
|
(5
|
)
|
|
|
(2
|
)
|
OPEX
|
|
|
1,427
|
|
|
|
1,754
|
|
|
|
477
|
|
|
|
570
|
|
|
|
404
|
|
|
|
135
|
|
(1) Mainly amortization of employee share based compensation
Key Financial and Operating Indicators (unaudited)*
NIS M
unless otherwise stated
|
|
Q3' 15
|
|
|
Q4' 15
|
|
|
Q1' 16
|
|
|
Q2' 16
|
|
|
Q3' 16
|
|
|
Q4' 16
|
|
|
Q1' 17
|
|
|
Q2' 17
|
|
|
Q3' 17
|
|
|
2015
|
|
|
2016
|
|
Cellular Segment Service Revenues
|
|
|
587
|
|
|
|
550
|
|
|
|
543
|
|
|
|
527
|
|
|
|
531
|
|
|
|
498
|
|
|
|
489
|
|
|
|
497
|
|
|
|
514
|
|
|
|
2,297
|
|
|
|
2,099
|
|
Cellular Segment Equipment Revenues
|
|
|
234
|
|
|
|
269
|
|
|
|
244
|
|
|
|
188
|
|
|
|
139
|
|
|
|
158
|
|
|
|
145
|
|
|
|
145
|
|
|
|
138
|
|
|
|
1,051
|
|
|
|
729
|
|
Fixed-Line Segment Service Revenues
|
|
|
225
|
|
|
|
223
|
|
|
|
222
|
|
|
|
219
|
|
|
|
220
|
|
|
|
205
|
|
|
|
194
|
|
|
|
192
|
|
|
|
194
|
|
|
|
906
|
|
|
|
866
|
|
Fixed-Line Segment Equipment Revenues
|
|
|
12
|
|
|
|
22
|
|
|
|
23
|
|
|
|
17
|
|
|
|
12
|
|
|
|
11
|
|
|
|
18
|
|
|
|
14
|
|
|
|
22
|
|
|
|
68
|
|
|
|
63
|
|
Reconciliation for consolidation
|
|
|
(52
|
)
|
|
|
(57
|
)
|
|
|
(55
|
)
|
|
|
(54
|
)
|
|
|
(53
|
)
|
|
|
(51
|
)
|
|
|
(43
|
)
|
|
|
(43
|
)
|
|
|
(42
|
)
|
|
|
(211
|
)
|
|
|
(213
|
)
|
Total Revenues
|
|
|
1,006
|
|
|
|
1,007
|
|
|
|
977
|
|
|
|
897
|
|
|
|
849
|
|
|
|
821
|
|
|
|
803
|
|
|
|
805
|
|
|
|
826
|
|
|
|
4,111
|
|
|
|
3,544
|
|
Gross Profit from Equipment Sales
|
|
|
52
|
|
|
|
61
|
|
|
|
56
|
|
|
|
42
|
|
|
|
28
|
|
|
|
18
|
|
|
|
26
|
|
|
|
33
|
|
|
|
43
|
|
|
|
239
|
|
|
|
144
|
|
Operating Profit (Loss)
|
|
|
32
|
|
|
|
(48
|
)
|
|
|
54
|
|
|
|
67
|
|
|
|
64
|
|
|
|
8
|
|
|
|
**105
|
|
|
|
**118
|
|
|
|
92
|
|
|
|
107
|
|
|
|
193
|
|
Cellular Segment Adjusted EBITDA
|
|
|
137
|
|
|
|
152
|
|
|
|
142
|
|
|
|
155
|
|
|
|
156
|
|
|
|
109
|
|
|
|
**187
|
|
|
|
**210
|
|
|
|
189
|
|
|
|
597
|
|
|
|
562
|
|
Fixed-Line Segment Adjusted EBITDA
|
|
|
59
|
|
|
|
65
|
|
|
|
80
|
|
|
|
73
|
|
|
|
64
|
|
|
|
55
|
|
|
|
**64
|
|
|
|
**59
|
|
|
|
50
|
|
|
|
279
|
|
|
|
272
|
|
Total Adjusted EBITDA
|
|
|
196
|
|
|
|
217
|
|
|
|
222
|
|
|
|
228
|
|
|
|
220
|
|
|
|
164
|
|
|
|
**251
|
|
|
|
**269
|
|
|
|
239
|
|
|
|
876
|
|
|
|
834
|
|
Adjusted EBITDA Margin (%)
|
|
|
19
|
%
|
|
|
22
|
%
|
|
|
23
|
%
|
|
|
25
|
%
|
|
|
26
|
%
|
|
|
20
|
%
|
|
|
**31
|
%
|
|
|
**33
|
%
|
|
|
29
|
%
|
|
|
21
|
%
|
|
|
24
|
%
|
OPEX
|
|
|
650
|
|
|
|
608
|
|
|
|
612
|
|
|
|
572
|
|
|
|
570
|
|
|
|
570
|
|
|
|
**478
|
|
|
|
**472
|
|
|
|
477
|
|
|
|
2,463
|
|
|
|
2,324
|
|
Impairment charges on operating profit
|
|
|
|
|
|
|
98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
98
|
|
|
|
|
|
Income with respect to settlement agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
with Orange
|
|
|
23
|
|
|
|
38
|
|
|
|
54
|
|
|
|
54
|
|
|
|
55
|
|
|
|
54
|
|
|
|
54
|
|
|
|
54
|
|
|
|
|
|
|
|
61
|
|
|
|
217
|
|
Finance costs, net
|
|
|
40
|
|
|
|
39
|
|
|
|
24
|
|
|
|
28
|
|
|
|
30
|
|
|
|
23
|
|
|
|
23
|
|
|
|
54
|
|
|
|
15
|
|
|
|
143
|
|
|
|
105
|
|
Profit (loss)
|
|
|
(9
|
)
|
|
|
(65
|
)
|
|
|
14
|
|
|
|
26
|
|
|
|
19
|
|
|
|
(7
|
)
|
|
|
**64
|
|
|
|
**46
|
|
|
|
54
|
|
|
|
(40
|
)
|
|
|
52
|
|
Capital Expenditures (cash)
|
|
|
64
|
|
|
|
56
|
|
|
|
48
|
|
|
|
57
|
|
|
|
44
|
|
|
|
47
|
|
|
|
**82
|
|
|
|
**76
|
|
|
|
105
|
|
|
|
359
|
|
|
|
196
|
|
Capital Expenditures (additions)
|
|
|
51
|
|
|
|
86
|
|
|
|
34
|
|
|
|
40
|
|
|
|
44
|
|
|
|
84
|
|
|
|
**58
|
|
|
|
**78
|
|
|
|
107
|
|
|
|
271
|
|
|
|
202
|
|
Adjusted Free Cash Flow
|
|
|
291
|
|
|
|
230
|
|
|
|
114
|
|
|
|
160
|
|
|
|
215
|
|
|
|
269
|
|
|
|
126
|
|
|
|
208
|
|
|
|
202
|
|
|
|
566
|
|
|
|
758
|
|
Adjusted Free Cash Flow (After Interest)
|
|
|
277
|
|
|
|
172
|
|
|
|
89
|
|
|
|
119
|
|
|
|
201
|
|
|
|
241
|
|
|
|
109
|
|
|
|
150
|
|
|
|
192
|
|
|
|
429
|
|
|
|
650
|
|
Net Debt
|
|
|
2,355
|
|
|
|
2,175
|
|
|
|
2,079
|
|
|
|
1,964
|
|
|
|
1,768
|
|
|
|
1,526
|
|
|
|
1,415
|
|
|
|
1,081
|
|
|
|
887
|
|
|
|
2,175
|
|
|
|
1,526
|
|
Cellular Subscriber Base (Thousands)
|
|
|
2,739
|
|
|
|
2,718
|
|
|
|
2,692
|
|
|
|
2,700
|
|
|
|
2,693
|
|
|
|
2,686
|
|
|
|
2,658
|
|
|
|
2,662
|
|
|
|
2,677
|
|
|
|
2,718
|
|
|
|
2,686
|
|
Post-Paid Subscriber Base (Thousands)
|
|
|
2,136
|
|
|
|
2,156
|
|
|
|
2,174
|
|
|
|
2,191
|
|
|
|
2,215
|
|
|
|
2,241
|
|
|
|
2,259
|
|
|
|
2,273
|
|
|
|
2,306
|
|
|
|
2,156
|
|
|
|
2,241
|
|
Pre-Paid Subscriber Base (Thousands)
|
|
|
603
|
|
|
|
562
|
|
|
|
518
|
|
|
|
509
|
|
|
|
478
|
|
|
|
445
|
|
|
|
399
|
|
|
|
389
|
|
|
|
371
|
|
|
|
562
|
|
|
|
445
|
|
Cellular ARPU (NIS)
|
|
|
71
|
|
|
|
67
|
|
|
|
67
|
|
|
|
65
|
|
|
|
66
|
|
|
|
62
|
|
|
|
61
|
|
|
|
62
|
|
|
|
64
|
|
|
|
69
|
|
|
|
65
|
|
Cellular Churn Rate (%)
|
|
|
10.8
|
%
|
|
|
11.1
|
%
|
|
|
11.2
|
%
|
|
|
9.8
|
%
|
|
|
9.7
|
%
|
|
|
9.4
|
%
|
|
|
9.8
|
%
|
|
|
9.0
|
%
|
|
|
9.3
|
%
|
|
|
46
|
%
|
|
|
40
|
%
|
Number of Employees (FTE)
|
|
|
3,017
|
|
|
|
2,882
|
|
|
|
2,827
|
|
|
|
2,740
|
|
|
|
2,742
|
|
|
|
2,686
|
|
|
|
2,580
|
|
|
|
2,582
|
|
|
|
2,696
|
|
|
|
2,882
|
|
|
|
2,686
|
|
|
*
|
See footnote 2 regarding use of non-GAAP measures.
|
** Figures include impact of IFRS15 retroactive implementation as from beginning of 2017.
Disclosure for notes holders as of September 30, 2017
Information regarding the notes series issued by the Company, in million NIS
Series
|
Original issuance date
|
Principal on the date of issuance
|
As of 30.09.2017
|
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
|
393
|
425
|
4
|
435
|
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
|
546
|
546
|
2
|
551
|
1.328%
(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.
|
E
|
25.04.10
04.05.11*
|
400
535
|
121
|
121
|
2
|
124
|
5.5%
|
30.12.13
|
30.12.17
|
30.6, 30.12
|
Not Linked
|
Mishmeret Trust Company Ltd. Rami Sebty. 48 Menachem Begin Rd. Tel Aviv.Tel:03-6374355.
|
F (1)
|
20.07.17
|
255
|
255
|
255
|
1
|
260
|
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.
|
(1) In July 2017, the Company issued Series F Notes in a principal amount of NIS 255 million. Regarding Series F Notes, the Company is required to comply with a financial covenant that the ratio of Net Debt to Adjusted EBITDA shall not exceed 5. Compliance will be examined and reported on a quarterly basis. For the definitions of Net Debt and Adjusted EBITDA see 'Use of non-GAAP measures' section above. For the purpose of the covenant, Adjusted EBITDA is calculated as the sum total for the last 12 month period, excluding adjustable one-time items. As of September 30, 2017, the ratio of Net Debt to Adjusted EBITDA was 1.0. Additional stipulations regarding Series F Notes are as follows: shareholders' equity shall not decrease below NIS 400 million; the Company shall not create floating liens subject to certain terms; the Company has the right for early redemption under certain conditions; the Company shall pay additional annual interest of 0.5% in the case of a two-notch downgrade in the Notes rating and an additional annual interest of 0.25% for each further single-notch downgrade, up to a maximum additional interest of 1%; the Company shall pay additional annual interest of 0.25% during a period in which there is a breach of the financial covenant.
The Company has additional financial covenants regarding its borrowings from financial institutions. See note 15 to the Company's 2016 annual financial statements.
In the reporting period, the Company was in compliance with all financial covenants and obligations and no cause for early repayment occurred.
In September 2017, the Company entered into an agreement with Israeli institutional investors to issue in December 2018, in the framework of a private placement, additional Series F notes, in an aggregate principal amount of NIS 150 million. S&P Maalot has rated the additional deferred issuance with an 'ilA+' rating. For additional details see the Company's press releases dated September 13 and 17, 2017.
(2) 'MAKAM' is a variable interest based on the yield of 12 month government bonds issued by the government of Israel. The interest rate is updated on a quarterly basis.
(*) On these dates additional Notes of the series were issued. The information in the table refers to the full series.
Disclosure for Notes holders as of September 30, 2017 (cont.)
Notes Rating Details*
Series
|
Rating Company
|
Rating as of 30.09.2017 and 22.11.2017 (1)
|
Rating assigned upon issuance of the Series
|
Recent date of rating as of 30.09.2017 and 22.11.2017
|
Additional ratings between the original issuance date and the recent date of rating (2)
|
Date
|
Rating
|
C
|
S&P Maalot
|
ilA+
|
ilAA-
|
07/2017
|
07/2010, 09/2010,
10/2010, 09/2012,
12/2012, 06/2013,
07/2014, 07/2015,
07/2016, 07/2017
|
ilAA-/Stable, ilAA-/Stable,
ilAA-/Negative, ilAA-/Watch Neg,
ilAA-/Negative, ilAA-/Stable,
ilAA-/Stable, ilA+/Stable,
ilA+/Stable, ilA+/Stable
|
D
|
S&P Maalot
|
ilA+
|
ilAA-
|
07/2017
|
E
|
S&P Maalot
|
ilA+
|
ilAA-
|
07/2017
|
F
|
S&P Maalot
|
ilA+
|
ilA+
|
07/2017
|
07/2017
|
ilA+/Stable
|
(1) In July 2017, S&P Maalot affirmed the Company's rating of “ilA+/Stable”.
(2) For details regarding the rating of the notes see the S&P Maalot report dated July 2, 2017 and July 27, 2017.
* A securities rating is not a recommendation to buy, sell or hold securities. Ratings may be subject to suspension, revision or withdrawal at any time, and each rating should be evaluated independently of any other rating
Summary of Financial Undertakings (according to repayment dates) as of September 30, 2017
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
|
Gross interest
payments
(without deduction of tax)
|
|
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
First year
|
212,513
|
230,506
|
-
|
-
|
-
|
26,963
|
Second year
|
212,513
|
109,228
|
-
|
-
|
-
|
13,651
|
Third year
|
-
|
160,138
|
-
|
-
|
-
|
8,678
|
Fourth year
|
-
|
160,138
|
-
|
-
|
-
|
6,165
|
Fifth year and on
|
-
|
261,958
|
-
|
-
|
-
|
6,951
|
Total
|
425,026
|
921,968
|
-
|
-
|
-
|
62,408
|
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 (in thousand NIS).
|
|
Principal payments
|
Gross interest
payments
(without deduction of tax)
|
|
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
First year
|
-
|
115,000
|
-
|
-
|
-
|
35,036
|
Second year
|
-
|
152,917
|
-
|
-
|
-
|
23,548
|
Third year
|
-
|
163,333
|
-
|
-
|
-
|
16,592
|
Fourth year
|
-
|
133,333
|
-
|
-
|
-
|
9,845
|
Fifth year and on
|
-
|
141,667
|
-
|
-
|
-
|
6,003
|
Total
|
-
|
706,250
|
-
|
-
|
-
|
91,024
|
c.
|
Credit from banks in Israel based on the Company's "Solo" financial data – None.
|
d.
|
Credit from banks abroad based on the Company's "Solo" financial data – None.
|
Summary of Financial Undertakings (according to repayment dates) as of September 30, 2017 (cont.)
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
|
Gross interest
payments
(without deduction of tax)
|
|
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
First year
|
212,513
|
345,506
|
-
|
-
|
-
|
61,999
|
Second year
|
212,513
|
262,145
|
-
|
-
|
-
|
37,199
|
Third year
|
-
|
323,471
|
-
|
-
|
-
|
25,270
|
Fourth year
|
-
|
293,471
|
-
|
-
|
-
|
16,010
|
Fifth year and on
|
-
|
403,625
|
-
|
-
|
-
|
12,954
|
Total
|
425,026
|
1,628,218
|
-
|
-
|
-
|
153,432
|
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.
|
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/ David (Dudu) Mizrahi
|
|
|
|
Name: David (Dudu) Mizrahi
|
|
|
|
Title: Chief Financial Officer
|
|
Dated: November 21, 2017
29
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