ADJUSTED EBITDA2 IN 2016
TOTALED NIS 834 MILLION
NET DEBT2 DECLINED TO NIS 1.53
BILLION
2016 Annual Highlights (compared with 2015)
- Total Revenues: NIS 3,544
million (US$ 922 million), a decrease of 14%
- Service Revenues: NIS 2,752
million (US$ 716 million), a decrease of 8%
- Equipment Revenues: NIS 792
million (US$ 206 million), a decrease of 29%
- Total Operating Expenses
(OPEX)2: NIS 2,324 million (US$ 604 million), a
decrease of 6%
- Adjusted EBITDA: NIS 834 million
(US$ 217 million), a decrease of 5%
- Adjusted EBITDA
Margin2: 24% of total revenues compared with
21%
- Profit for the Year: NIS 52
million (US$ 14 million) compared with a loss of NIS 40 million, an
increase of NIS 92 million
- Profit for the Year compared with
Profit for the Year before the impact of impairment charge for
2015: NIS 52 million (US$ 14 million), an increase of NIS 20
million or 62%
- Net Debt: NIS 1,526 million (US$
397 million), a decrease of NIS 649 million
- Adjusted Free Cash Flow (before
interest)2: NIS 758 million (US$ 197 million), an
increase of 34%
- Cellular ARPU: NIS 65 (US$ 17),
a decrease of 6%
- Cellular Subscriber Base:
approximately 2.69 million at year-end, a decrease of 1%
Fourth quarter 2016 highlights (compared with fourth quarter
2015)
- Total Revenues: NIS 821 million
(US$ 214 million), a decrease of 18%
- Service Revenues: NIS 652
million (US$ 170 million), a decrease of 9%
- Equipment Revenues: NIS 169
million (US$ 44 million), a decrease of 42%
- Total Operating Expenses (OPEX):
NIS 570 million (US$ 148 million), a decrease of 6%
- Adjusted EBITDA: NIS 164 million
(US$ 43 million), a decrease of 24%
- Adjusted EBITDA Margin: 20% of
total revenues compared with 22%
- Loss for the Period: NIS 7
million (US$ 2 million), a decrease in loss of 89%
- Loss for the Period compared with
Profit before the impact of impairment charge for the Period for Q4
2015: NIS 7 million (US$ 2 million), a decrease in profit of
NIS 14 million
- Net Debt: NIS 1,526 million (US$
397 million), a decrease of NIS 649 million
- Adjusted Free Cash Flow (before
interest): NIS 269 million (US$ 70 million), an increase of
17%
- Cellular ARPU: NIS 62 (US$ 16),
a decrease of 7%
- Cellular Subscriber Base:
approximately 2.69 million at quarter-end, a decrease of 1%
Partner Communications Company Ltd. (“Partner” or
the “Company”) (NASDAQ:PTNR) (TASE:PTNR), a leading Israeli
communications operator, announced today its results for the
quarter and year ended December 31, 2016.
Commenting on the fourth quarter and annual 2016 results, Mr.
Isaac Benbenisti, CEO of Partner noted:
"In 2016, the Post-Paid cellular subscriber base increased by 85
thousand subscribers compared with an increase of 24 thousand
subscribers in 2015, and the churn rate continued to decline. At
the end of 2016, Post-Paid subscribers accounted for 83% of the
Company's cellular subscriber base.
During the last year, we embarked on a new path as a
comprehensive communications group with the launch of the Company's
new brand, we strengthened the working relationship with our
employees with the signing of a collective employment agreement
which includes improved terms for the employees, we expanded our
service platforms, and added digital solutions to improve
transparency and information availability for the customer.
In the cellular segment, Partner continues to lead in the
Israeli market with an advanced network and the widest 4G coverage.
We continue to implement advanced technologies in our core network
which offers differentiation, such as Wifi Calling technology,
which enables cellular calls over the wireless internet, thus
further increasing our coverage. In February 2017, we launched the
first "Internet of Things" (IoT) network in Israel, "IoT Pro",
which provides real value to the Israeli consumer, both private and
business, in the ability to adopt advanced technologies in a more
secure, quick and efficient manner. Worldwide, only a handful of
companies have launched a dedicated advanced IoT network, and we
are proud to be one of them. The regulator needs to understand that
we are at the beginning of a global revolution in this field, in
particular due to the future adoption of fifth generation
technologies (5G).
In addition, in the past year we created a technological and
operational base for two strategic Company projects for the coming
years; Partner’s TV project and the deployment of an independent
fiber-optic based fixed-line infrastructure. These projects are
expected to create new growth engines for the Company, diversify
our revenue streams, and enable us to offer a full communications
offerings over our own independent and advanced infrastructure.
The TV project, which will be launched in the coming months,
will be based on the Android TV operating system, which has been
chosen by leading content suppliers worldwide. Partner's operating
system will allow our TV customers to enjoy the benefits of a wide
range of content with an advanced interface adapted for the Israeli
viewer.
In fixed-line services, we continued to proceed with the
deployment of our fiber-optic based fixed-line infrastructure and
to work with the various planning authorities. This network will
enables us to supply private customers with internet speeds of up
to 1Gb using the most advanced technologies. The future progress of
the project will depend, among other things, on the regulator's
assistance and the steps that it will take to ensure we will not be
blocked in establishing a new and advanced infrastructure.
Creating an alternative to the monopoly and duopolies that
currently dominate the fixed-line and multi-channel TV markets in
Israel will benefit consumers. In addition, advances in areas such
as IoT, connected cars, advanced health technologies, security,
finance, transportation and more, depend on the development of
communication infrastructures. Therefore it is in the interest of
the regulator, the consumer and the entire communications market to
support and enable the entry of new players to these areas through
the development of advanced infrastructures, thereby creating real,
improved and more advanced alternatives."
Mr. Ziv Leitman, Partner's Chief Financial Officer,
commented on the fourth quarter results of 2016 as compared to the
third quarter results of 2016:
“During the fourth quarter of 2016, cellular service revenues
decreased by 6%, mainly reflecting a decrease in seasonal roaming
revenues, as well as the continued price erosion of cellular
service revenues at a rate similar to that in the previous two
quarters, as a result of the ongoing strong competition. As a
result, cellular ARPU totaled NIS 62 in the fourth quarter 2016
compared with NIS 66 in the previous quarter.
The churn rate for cellular subscribers was 9.4% in the fourth
quarter of 2016 compared to 9.7% in the previous quarter and 11.1%
in the fourth quarter of 2015, with the decrease being fully
explained by the decrease in the Post-Paid subscriber churn.
Revenues from equipment sales in the fourth quarter of 2016
increased by NIS 18 million compared with the previous quarter,
while gross profit from equipment sales decreased by NIS 10
million. The decrease in profitability was mainly related to the
tightening of the Company's customer credit policy, and a change in
the product mix.
Total operating expenses (OPEX) were unchanged from the third
quarter of 2016, totaling NIS 570 million, including the one-time
expense of the employee retirement plan in an amount of
approximately NIS 12 million as well as a one-time
expense of approximately NIS 7 million relating to the early
termination of an operating lease, being offset by a decrease in
network-related operating expenses, international telephony and
interconnect expenses.
Adjusted EBITDA in the fourth quarter of 2016 decreased by NIS
56 million, or 25%, compared with the previous quarter, mainly
reflecting the decrease in service revenues and in gross profit
from equipment sales.
Finance costs, net, totaled NIS 23 million in the reported
quarter, a decrease of NIS 7 million compared to the previous
quarter, reflecting lower CPI linkage costs resulting from the
decrease in the CPI level.
Overall, the Company recorded a loss for the fourth quarter of
2016 of NIS 7 million compared with a profit of NIS 19 million in
the previous quarter, largely reflecting the reduction in Adjusted
EBITDA, partially offset by a decrease in income tax expenses and
finance costs, net.
Cash capital expenditures (CAPEX payments) in the fourth quarter
of 2016 totaled NIS 47 million compared to NIS 44 million in the
previous quarter, an increase of 7%.
Adjusted free cash flow (before interest payments) in the
reported quarter totaled NIS 269 million, compared with NIS 215
million in the previous quarter. The increase in adjusted free cash
flow primarily reflected the final payment of the NIS 250 million
lump sum from HOT Mobile, in an amount of NIS 180 million,
compared with their previous payment of NIS 35 million in the third
quarter of 2016. The impact of this payment was partially offset
primarily by an increase in other operating working capital items
and by the decrease in profit.
In December 2016, following the deferred loan agreement from May
2014, the Company received a loan from a group of institutional
corporations in the principal amount of NIS 250 million. The loan
will bear unlinked interest and will be paid (principal and
interest) in variable quarterly payments over five years,
commencing in March 2017.
As of December 31, 2016, net debt amounted to approximately NIS
1.53 billion (total short and long term debt and current
maturities of NIS 2.70 billion less cash and cash equivalents and
short term deposits of NIS 1.17 billion). In 2016 as a whole,
net debt declined by NIS 649 million, largely a result of the
positive adjusted free cash flow (after interest payments).”
Key Financial Results
NIS MILLION (except EPS)
2012
2013
2014
20153
2016
Revenues 5,572 4,519 4,400 4,111
3,544 Cost of revenues 4,031 3,510 3,419 3,472 2,924 Gross profit
1,541 1,009 981 639 620 S,G&A 787 679 631 640 689 Income with
respect to settlement agreement with Orange 61 217 Other income 111
79 50 47 45 Operating profit 865 409 400 107 193 Finance costs, net
234 211 159 143 105 Income tax expenses 153 63 79 4 36 Profit
(loss) for the year 478 135 162 (40) 52 Earnings (loss) per share
(basic, NIS) 3.07 0.87 1.04 (0.26)
0.33 NIS MILLION (except EPS)
Q4’153
Q1’16
Q2’16
Q3’16
Q4’16
Revenues 1,007 977 897 849 821
Cost of revenues 928 797 730 691 706 Gross profit 79 180 167 158
115 S,G&A 175 194 166 158 171 Income with respect to settlement
agreement with Orange 38 54 54 55 54 Other income 10 14 12 9 10
Operating profit (loss) (48) 54 67 64 8 Finance costs, net 39 24 28
30 23 Income tax expenses (income) (22) 16 13 15 (8) Profit (loss)
for the period (65) 14 26 19 (7) Earnings (loss) per share (basic,
NIS) (0.42) 0.09 0.17 0.12
(0.04)
NIS MILLION (except EPS) Q4'16
Q4'153 % Change Revenues 821
1,007 -18% Cost of revenues 706 928 -24% Gross profit
115 79 +46% Operating profit (loss) 8 (48) N/A Profit (loss) for
the period (7) (65) -89% Earnings (loss) per share (basic, NIS)
(0.04) (0.42) -90% Adjusted Free cash flow (before interest)
269 230 +17%
Key Operating Indicators
2012
2013
2014
2015
2016
Adjusted EBITDA (NIS million) 1,602 1,114
1,096 876 834 Adjusted EBITDA (as a % of total
revenues) 29% 25% 25% 21% 24% Adjusted Free Cash Flow (NIS
millions) 1,234 1,041 520 566 758 Cellular Subscribers (end of
period, thousands) 2,976 2,956 2,837 2,718 2,686 Estimated Cellular
Market Share (%) 29% 29% 28% 27% 26% Annual Cellular Churn Rate (%)
38% 39% 47% 46% 40% Average Monthly Revenue per Cellular Subscriber
(ARPU) (NIS) 97 83 75 69 65
Q4'16 Q4'15
Change
Adjusted EBITDA (NIS million) 164
217
-24% Adjusted EBITDA (as a % of total revenues) 20%
22%
-2 Cellular Subscribers (end of period, thousands) 2,686
2,718
-32 Quarterly Cellular Churn Rate (%) 9.4%
11.1%
-1.7 Monthly Average Revenue per Cellular User (ARPU) (NIS)
62
67
-5
Partner Consolidated Results (excluding
impact of impairment charges*)
Cellular Segment Fixed-Line Segment
Elimination Consolidated NIS
Million 2016 2015 Change
% 2016 2015 Change %
2016 2015 2016
2015 Change % Total Revenues 2,828
3,348 -16% 929 974 -5% (213) (211)
3,544 4,111 -14% Service Revenues 2,099 2,297 -9% 866
906 -4% (213) (211) 2,752 2,992 -8% Equipment Revenues 729 1,051
-31% 63 68 -7% - - 792 1,119 -29% Operating Profit 68 72 -6% 125
133 -6% - - 193 205 -6% Adjusted EBITDA 562 597
-6% 272 279 -3% - -
834 876 -5%
Cellular Segment
Fixed-Line Segment Elimination
Consolidated NIS Million Q4'16
Q4'15 Change % Q4'16
Q4'15 Change % Q4'16
Q4'15 Q4'16 Q4'15
Change % Total Revenues 656 819 -20% 216
245 -12% (51) (57) 821 1,007
-18% Service Revenues 498 550 -9% 205 223 -8% (51) (57) 652 716 -9%
Equipment Revenues 158 269 -41% 11 22 -50% - - 169 291 -42%
Operating Profit (loss) (10) 22 N/A 18 28 -36% - - 8 50 -84%
Adjusted EBITDA 109 152 -28% 55
65 -15% - - 164 217 -24%
* Exclude impact of impairment charges of NIS 98 million on
fixed line segment operating profit in Q4 2015.
Financial Review
In 2016, total revenues were NIS 3,544 million (US$ 922
million), a decrease of 14% from NIS 4,111 million in 2015.
Annual service revenues in 2016 totaled NIS 2,752 million
(US$ 716 million), a decrease of 8% from NIS 2,992 million in
2015.
Service revenues for the cellular segment in 2016 totaled
NIS 2,099 million (US$ 546 million), a decrease of 9% from NIS
2,297 million in 2015. The decrease was mainly a result of the
continued downward pressures on the prices of post-paid and
pre-paid cellular services as a result of the continued competition
in the cellular market. As an illustration of the continued fierce
competition in the cellular market, approximately 2.3 million
cellular subscribers are estimated to have switched operators
within the Israeli market (with number porting) in 2016, only
slightly fewer than the estimated 2.5 million switchers in 2014 and
2015. Price erosion was also caused by the significant
amount of cellular subscribers who moved between different rate
plans or packages (generally with a lower monthly fee) within the
Company.
In addition, cellular segment service revenues were negatively
affected by a decrease in revenues from wholesale services provided
to other operators hosted on the Company’s network, and in
particular as a result of termination of the Right of Use Agreement
with HOT Mobile from the second quarter of 2016, as a result of
which revenues recorded related to the Right of Use Agreement
decreased from approximately NIS 120 million in 2015 to
approximately NIS 51 million in 2016. This decrease was partially
offset by the revenue recognition of the Lump Sum payment from HOT
Mobile under the Network Sharing Agreement in an amount of
approximately NIS 23 million in 2016.
Pre-Paid cellular subscribers contributed service revenues in a
total amount of approximately NIS 180 million (US$ 47 million) in
2016, a decrease of 22% from approximately NIS 230 million in 2015,
as a result of the price erosion in pre-paid services and the
decrease in the number of Pre-Paid subscribers, which was largely
attributed to Pre-Paid subscribers moving to Post-Paid subscriber
packages as a result of the significant price difference of these
products, as well as to increased competition for Pre-Paid
subscribers.
Service revenues for the fixed line segment in 2016
totaled NIS 866 million (US$ 225 million), a decrease of 4% from
NIS 906 million in 2015. The decrease mainly reflected a decrease
in revenues from international calls (including in the market for
wholesale international traffic) as well as decreases in revenues
from other fixed line services including local lines and ISP
services.
For Q4 2016, total revenues were NIS 821 million (US$ 214
million), a decrease of 18% from NIS 1,007 million in Q4 2015.
Service revenues in Q4 2016 totaled NIS 652 million (US$ 170
million), a decrease of 9% from NIS 716 million in Q4 2015.
Service revenues for the cellular segment in Q4 2016 totaled
NIS 498 million (US$ 130 million), a decrease of 9% from NIS 550
million in Q4 2015. The decrease resulted from the same
reasons as described with respect to the annual decrease.
Service revenues for the fixed-line segment in Q4 2016
totaled NIS 205 million (US$ 53 million), a decrease of 8% from NIS
223 million in Q4 2015, the decrease reflecting lower revenues in a
number of different fixed-line services.
Equipment revenues in 2016 totaled NIS 792 million (US$
206 million), a decrease of 29% from NIS 1,119 million in 2015,
largely reflecting a decrease in the volume of equipment sales,
mainly related to the tightening of the Company’s customer credit
policy.
Gross profit from equipment sales in 2016 was NIS
144 million (US$ 37 million), compared with NIS 239 million in
2015, a decrease of 40%, reflecting both the decrease in the volume
of equipment sales, as described above, and lower profit margins
from sales which was also largely due to the tightening of the
Company’s customer credit policy, as well as to a change in product
mix towards products with lower profit margins.
Equipment revenues in Q4 2016 totaled NIS 169 million
(US$ 44 million), a decrease of 42% from NIS 291 million in Q4
2015, again largely reflecting a decrease in the volume of
equipment sales.
Gross profit from equipment sales in Q4 2016 was NIS 18
million (US$ 5 million), compared with NIS 61 million in Q4 2015, a
decrease of 70%, again reflecting both the decrease in the volume
of equipment sales and lower profit margins from sales.
Total operating expenses (‘OPEX’) totaled NIS 2,324
million (US$ 604 million) in 2016, a decrease of 6% or NIS 139
million from 2015. The decrease mainly reflected decreases in
expenses related to the cellular network following the
implementation of the cost sharing mechanism under the Network
Sharing Agreement with HOT Mobile, in expenses related to payments
to communication and content providers, and in other expense items
reflecting the impact of various efficiency measures undertaken,
including a reduction in payroll and related expenses resulting
from the reduction in the size of the Company workforce by
approximately 14% on an average basis (average of workforce at
beginning and end of year). These decreases were partially offset
by increases in expenses related to the rebranding of the Company,
as well as an increase in bad debts and allowance for doubtful
accounts expenses.
Including depreciation and amortization expenses and other
expenses (mainly amortization of employee share based
compensation), OPEX in 2016 decreased by 8% compared with 2015,
mainly for the same reasons as explained above, in addition to the
impact of the impairment charges of NIS 98 million which were
recorded in 2015.
For Q4 2016, OPEX totaled NIS 570 million (US$ 148 million), a
decrease of 6% or NIS 38 million from Q4 2015. The decrease mainly
reflected a decrease in expenses related to the cellular network
following the implementation of the cost sharing mechanism under
the Network Sharing Agreement with HOT Mobile and in expenses
related to payments to communication and content providers. These
decreases were partially offset by the one-time expense of the new
collective employment agreement in an amount of approximately
NIS 12 million and a one-time expense of approximately NIS 7
million relating to the early termination of an operating lease.
Including depreciation and amortization expenses and impairment
charges and other expenses (mainly amortization of employee share
based compensation), OPEX in Q4 2016 decreased by 17% compared with
Q4 2015, mainly reflecting the impact of the impairment charges
totaling NIS 98 million which were recorded in Q4 2015.
In 2016, the Company recorded income with respect to the
settlement agreement of the Orange brand agreement in an amount
of NIS 217 million (US$ 56 million) compared with NIS 61 million
recorded in 2015.
The recognition of the advance payments received from Orange
will cease from the third quarter of 2017. Therefore the
recognition of the advance payments in 2017 will be limited to an
amount of NIS 108 million.
Other income, net, totaled NIS 45 million (US$ 12
million) in 2016, compared to NIS 47 million in 2015, a decrease of
4%, mainly reflecting a decrease in income from the unwinding of
trade receivables.
Operating profit for 2016 was NIS 193 million (US$ 50
million), an increase of 80% compared with NIS 107 million in 2015.
Compared with operating profit before the impact of the impairment
charges in 2015, operating profit in 2016 decreased by 6%.
For Q4 2016, operating profit was NIS 8 million (US$ 2 million),
compared with operating loss of NIS 48 million in Q4 2015. Compared
with operating profit before the impact of the impairment charges
in Q4 2015, operating profit in Q4 2016 decreased by 84%.
Adjusted EBITDA in 2016 totaled NIS 834 million (US$ 217
million), a decrease of 5% from NIS 876 million in 2015. As a
percentage of total revenues, Adjusted EBITDA in 2016 was 24%
compared with 21% in 2015.
Adjusted EBITDA for the cellular segment was NIS 562
million (US$ 146 million), in 2016, a decrease of 6% from NIS 597
million in 2015, reflecting the impact of the decreases in service
revenues and in gross profit from equipment sales, partially offset
by a reduction in total operating expenses and the increase in
income with respect to the settlement agreement with Orange. As a
percentage of total cellular segment revenues, Adjusted EBITDA for
the cellular segment in 2016 was 20% compared with 18% in 2015.
Adjusted EBITDA for the fixed line segment was NIS 272
million (US$ 71 million) in 2016, a decrease of 3% from NIS 279
million in 2015, mainly reflecting the impact of the decreases in
service revenues and in gross profit from equipment sales,
partially offset by a reduction in total operating expenses. As a
percentage of total fixed line segment revenues, Adjusted EBITDA
for the fixed line segment in 2016 was 29%, unchanged from
2015.
For Q4 2016, Adjusted EBITDA totaled NIS 164 million (US$
43 million), a decrease of 24% from NIS 217 million in Q4 2015.
Adjusted EBITDA for the cellular segment was NIS 109 million (US$
28 million) in Q4 2016, a decrease of 28% from NIS 152 million in
Q4 2015. As a percentage of total cellular segment revenues,
Adjusted EBITDA for the cellular segment in Q4 2016 was 17%
compared with 19% in Q4 2015. Adjusted EBITDA for the fixed line
segment was NIS 55 million (US$ 14 million) in Q4 2016, a decrease
of 15% from NIS 65 million in Q4 2015. As a percentage of total
fixed line segment revenues, Adjusted EBITDA for the fixed line
segment in Q4 2016 was 25% compared with 27% in Q4 2015.
Finance costs, net in 2016 were NIS 105 million (US$ 27
million), a decrease of 27% compared with NIS 143 million in 2015.
The decrease reflected lower interest payment expenses due to the
lower average level of debt, as well as gains from foreign exchange
movements in 2016 compared with losses from foreign exchange
movements in 2015 and lower early debt repayment expenses, which
were partially offset by higher linkage expenses due to the higher
CPI level.
For Q4 2016, finance costs, net were NIS 23 million (US$ 6
million), a decrease of 41% compared with NIS 39 million in Q4
2015. The decrease mainly reflected the early repayment fees for
loans which were recorded in Q4 2015 in an amount of NIS 13
million, as well as lower interest expenses as a result of the
lower average level of debt, partially offset by higher CPI linkage
expenses.
Income taxes for 2016 were NIS 36 million (US$ 9
million), compared with NIS 4 million in 2015. In January
2016, the Law for the Amendment of the Income Tax Ordinance (No.
216) was published, enacting a reduction of corporate tax rate,
from 26.5% to 25%, for the years 2016 and thereafter. In addition,
in December 2016, the Economic Efficiency Law (Legislative
Amendments for Implementing the Economic Policy for the 2017 and
2018 Budget Year) 2016 was published, enacting that the corporate
tax rate will be 24% in 2017 and 23% in 2018 and thereafter. These
reductions of the corporate tax rate resulted in a reduction of NIS
7 million in the Group's deferred tax assets in 2016, which was
recognized as an income tax expense.
The Company’s effective tax rate is expected to continue to be
higher than the corporate tax rate mainly due to nondeductible
expenses.
Overall, the company's profit in 2016 was NIS 52 million
(US$ 14 million), compared with a loss of NIS 40 million in 2015.
Compared with profit excluding the impact of the impairment charges
in 2015, profit in 2016 increased by 62%.
For Q4 2016, reported loss was NIS 7 million (US$ 2 million), a
decrease of 89% compared with a loss of NIS 65 million in Q4 2015
and a decrease in profit of NIS 14 million compared with profit
before the impact of the impairment charges, of NIS 7 million in Q4
2015.
Based on the weighted average number of shares outstanding
during 2016, basic earnings per share or ADS, was NIS 0.33
(US$ 0.09), compared to basic loss per share of NIS 0.26 in
2015.
For Q4 2016, based on the weighted average number of shares
outstanding during Q4 2016, basic loss per share or ADS, was NIS
0.04 (US$ 0.01), compared to basic loss per share of NIS 0.42 in Q4
2015.
Cellular Segment Operational
Review
At the end of 2016, the Company's cellular subscriber
base (including mobile data and 012 Mobile subscribers) was
approximately 2.69 million including approximately 2.24 million
Post-Paid subscribers or 83% of the base, and approximately 445,000
Pre-Paid subscribers, or 17% of the subscriber base.
Over 2016, the cellular subscriber base declined by
approximately 32,000. The Pre-Paid subscriber base decreased by
approximately 117,000, while the Post-Paid subscriber base
increased by approximately 85,000. The decrease in the Pre-Paid
subscriber base was largely attributed to the Pre-Paid subscribers
moving to Post-Paid subscriber packages as a result of the
significant price difference of these products, as well as to
increased competition for Pre-Paid subscribers.
The annual churn rate for cellular subscribers in 2016
was 40%, a decrease of 6 percentage points compared with 46% in
2015, and 47% in 2014.
Total cellular market share (based on the number of
subscribers) at the end of 2016 was estimated to be approximately
26%, similar to 2015 year-end.
During Q4 2016, the cellular subscriber base declined by
approximately 7,000 subscribers, with the Post-Paid subscriber base
increasing by approximately 26,000 subscribers and the Pre-Paid
subscriber base declining by approximately 33,000 subscribers.
The monthly Average Revenue per User (“ARPU”) for
cellular subscribers in 2016 was NIS 65 (US$ 17), a decrease of 6%
from NIS 69 in 2015. The decrease mainly reflected the continued
price erosion in the key cellular services including airtime,
content, data and browsing, due to the persistent competition in
the cellular market, as well as a decrease in revenues from
wholesale services provided to other operators hosted on the
Company’s network and in particular as a result of termination of
the Right of Use Agreement with HOT Mobile from the second quarter
of 2016.
For Q4 2016, ARPU for cellular subscribers was NIS 62 (US$ 16),
a decrease of 7% from NIS 67 in Q4 2015, largely for the same
reasons as the annual decrease in ARPU.
Funding and Investing
Review
In 2016, Adjusted Free Cash Flow totaled NIS 758 million
(US$ 197 million), an increase of 34% from NIS 566 million in
2015.
Cash generated from operations increased by 2% to NIS 945
million (US$ 245 million) in 2016 from NIS 922 million in 2015. The
increase mainly reflected the significant decrease in operating
assets, which was mainly explained by the significant decrease in
the volume of equipment sales under long-term payment plans in 2016
compared with in 2015. In addition, the increase reflected the
payment by HOT Mobile in 2016 of the lump sum of NIS 250 million
under the Network Sharing Agreement. These two factors were
partially offset by the payment in 2015 of €90 million received
from Orange as part of the settlement agreement of the Orange brand
agreement, and by the decrease in Adjusted EBITDA excluding the
recorded income with respect to the settlement agreement of the
Orange brand agreement.
Cash capital expenditures (CAPEX payments), as
represented by cash flows used for the acquisition of property and
equipment and intangible assets, were NIS 196 million (US$ 51
million) in 2016, a decrease of 45% from NIS 359 million in 2015.
On an accrual basis, additions to property and equipment and to
intangible assets totaled NIS 202 million (US$ 53 million), a
decrease of 25% compared with NIS 271 million in 2015, which
included a one-time payment to the Ministry of Communications for
the 4G frequencies in the amount of NIS 34 million.
For Q4 2016, Adjusted Free Cash Flow, totaled NIS 269
million (US$ 70 million), an increase of 17% from NIS 230 million
in Q4 2015. Cash generated from operations increased by 10%
to NIS 313 million (US$ 81 million) in Q4 2016 from NIS 285 million
in Q4 2015. The increase mainly reflected the decrease in operating
assets and the final payment of NIS 180 million by HOT Mobile as
part of the lump sum under the Network Sharing Agreement. These two
factors were partially offset by the payment in Q4 2015 of €50
million received from Orange as part of the settlement agreement of
the Orange brand agreement, and by the decrease in Adjusted EBITDA
excluding the recorded income with respect to the settlement
agreement of the Orange brand agreement. Cash capital
expenditures (CAPEX payments) were NIS 47 million (US$ 12
million) in Q4 2016, a decrease of 16% from NIS 56 million in
Q4 2015.
The level of net debt at the end of 2016 amounted to NIS
1,526 million (US$ 397 million), compared with NIS 2,175 million at
the end of 2015.
Conference Call Details
Partner will hold a conference call on Thursday, March 30, 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: +972.3.918.0610North America
toll-free: +1.888.668.9141A 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 March 30, 2017 until April 9, 2017, at the following
numbers:International: +972.3.925.5930North America toll-free:
+1.888.782.4291In 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 future entry of cellular networks worldwide
into fifth generation (5G), the Company’s strategic projects for
the coming years, that are intended to diversify our revenue
streams for the Company and to enable us to offer our customers a
full communications offering through an independent and advanced
infrastructure; the operating system that we expect to provide to
our customers in the future TV project; the dependency of the
Company's fiber optic based infrastructure project, among others,
on the regulator's assistance and steps that the regulator will
take to ensure we will not be blocked in establishing our new and
advanced network; the developments in the IoT fields that depend on
development of the communications infrastructures; and the expected
decrease of the Israeli corporate tax rate and its impact on the
Company's effective tax rate. 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 (i)
technological, technical or other difficulties that might delay or
block the Company from establishing independent communication
infrastructure; (ii) lack of receipt of the regulator's assistance
in developing the infrastructures in the communications market and
assistance in creating a true and better alternative for the
consumer in light of the competitors that currently control the
market and (iii) whether the Company will have the financial
resources and commercial strategies which allow it to successfully
achieve its strategic Company projects 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 December 31, 2016: US $1.00 equals NIS 3.845. The
translations were made purely for the convenience of the
reader.
Use of Non-GAAP Financial
MeasuresThe 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)addIncome tax expenses,Finance costs,
net,Depreciation and amortization expenses(including amortization
of intangible assets,deferred expenses-right of use andimpairment
charges), Other expenses (mainlyamortization of share based
compensation) Profit (Loss)
Adjusted EBITDA
margin (%)
Adjusted EBITDA margin (%):Adjusted EBITDAdivided byTotal 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 deposits
Cash flows from operatingactivities
deduct
Cash flows from investingactivities
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
ofemployee share based compensation)
Sum of:
Cost of service revenues,
Selling and marketing expenses,
General and administrativeexpenses
Net Debt
Net Debt:
Current maturities of notes payable
andborrowings
add
Notes payable
add
Borrowings from banks and others
deduct
Cash and cash equivalents
deduct
Short-term deposits
Sum of:
Current maturities of notespayable and
borrowings,
Notes payable,
Borrowings from banks andothers
* 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 and internet 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
1 The quarterly financial results are unaudited. See also the
Company’s 2016 audited annual report which will be attached to the
Company's 2016 Annual Report (20-F) to be filed with the SEC.2 For
the definition of this and other Non-GAAP financial measures, see
“Use of Non-GAAP Financial Measures” in this press release.3 In Q4
2015, the Company recorded an impairment charge on its fixed line
assets which reduced operating profit by NIS 98 million and profit
by NIS 72 million in 2015.
PARTNER COMMUNICATIONS COMPANY LTD.(An
Israeli Corporation)CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
New Israeli Shekels
Convenience translation
into U.S. dollars
December 31, 2015 2016
2016 In millions CURRENT ASSETS Cash and cash
equivalents 926 716 186 Short-term deposits 452 118 Trade
receivables 1,057 990 257 Other receivables and prepaid expenses 47
57 15 Deferred expenses – right of use 33 28 7 Inventories 120 96
25 Income tax receivable 2 2,185 2,339 608
NON CURRENT ASSETS Trade receivables 492 333 87 Deferred
expenses – right of use 20 75 20 Property and equipment 1,414 1,207
314 Licenses and other intangible assets 956 793 206 Goodwill 407
407 106 Deferred income tax asset 49 41 10 Prepaid expenses and
other 3 2 1 3,341 2,858 744
TOTAL ASSETS 5,526 5,197
1,352
PARTNER COMMUNICATIONS COMPANY LTD.(An
Israeli Corporation)CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
New Israeli Shekels
Convenience translation
into U.S. dollars
December 31, 2015 2016 2016
In millions CURRENT LIABILITIES Current maturities of
notes payable and borrowings 554 498 130 Trade payables 715 681 177
Payables in respect of employees 77 101 26 Other payables (mainly
institutions) 45 28 7 Income tax payable 52 45 12 Deferred income
with respect to settlement agreement with Orange 217 108 28
Deferred revenues from HOT mobile 31 8 Other deferred revenues 28
38 10 Provisions 77 77 20 1,765 1,607 418
NON CURRENT
LIABILITIES Notes payable 1,190 646 168 Borrowings from banks
and others 1,357 1,550 403 Liability for employee rights upon
retirement, net 34 39 10 Dismantling and restoring sites obligation
36 35 9 Deferred income with respect to settlement agreement with
Orange 108 Deferred revenues from HOT mobile 195 51 Other
non-current liabilities 16 14 4 2,741 2,479 645
TOTAL
LIABILITIES 4,506 4,086 1,063
EQUITY Share
capital – ordinary shares of NIS 0.01
par value: authorized – December 31,
2015
and 2016 – 235,000,000 shares;
issued and outstanding -
2 2 1 December 31, 2015 – *156,087,456 shares December 31, 2016 –
*156,993,337 shares Capital surplus 1,102 1,034 269 Accumulated
retained earnings 267 358 93 Treasury shares, at cost –
December 31, 2015 – **4,461,975 shares
December 31, 2016 – **3,603,578 shares
(351) (283) (74)
TOTAL EQUITY 1,020 1,111 289
TOTAL
LIABILITIES AND EQUITY 5,526 5,197 1,352
* Net of treasury shares.** Including restricted shares in
amount of 2,061,201 and 2,911,806 as of December 31, 2016 and
December 31, 2015, 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)CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Convenience
translation
into U.S. dollars
New Israeli Shekels Year ended December 31
2014 2015 2016 2016 In
millions (except earnings per share) Revenues, net 4,400 4,111
3,544
922
Cost of revenues 3,419 3,472 2,924 760
Gross profit 981 639
620
162
Selling and marketing expenses 438 417 426
111
General and administrative expenses 193 223 263
68
Income with respect to settlement agreement with Orange 61 217
56
Other income, net 50 47 45
12
Operating profit 400 107 193
51
Finance income 3 13 13
3
Finance expenses 162 156 118
31
Finance costs, net 159 143 105
28
Profit (loss) before income tax 241 (36) 88
23
Income tax expenses 79 4 36
9
Profit (loss) for the year 162 (40) 52
14
Earnings (loss) per share Basic 1.04 (0.26) 0.33
0.09
Diluted 1.04 (0.26) 0.33
0.09
PARTNER COMMUNICATIONS COMPANY LTD.(An
Israeli Corporation)CONDENSED CONSOLIDATED STATEMENTSOF
COMPREHENSIVE INCOME
New Israeli Shekels
Convenience translation
into U.S. dollars
Year ended December 31 2014 2015
2016 2016 In millions
Profit (loss) for the year
162 (40) 52 14
Other comprehensive income (loss), items
that will not be reclassified to profit
or loss
Remeasurements of post-employment benefit obligations (9) 5 (8) (2)
Income taxes relating to remeasurements
ofpost-employment benefit obligations
2 (1) 2 *
Other comprehensive income (loss) for the year,
net of income taxes (7) 4 (6) (2)
TOTAL COMPREHENSIVE
INCOME (LOSS) FOR THE YEAR 155 (36) 46 12
* Representing an amount of less than 1 million.
PARTNER COMMUNICATIONS COMPANY LTD.(An
Israeli Corporation)SEGMENT INFORMATION
New Israeli Shekels Year ended December 31,
2016 In millions
Cellular segment
Fixed-line segment
Elimination Consolidated Segment
revenue - Services 2,080 672 2,752 Inter-segment revenue - Services
19 194 (213) Segment revenue - Equipment 729 63 792
Total
revenues 2,828 929 (213) 3,544 Segment cost of revenues
- Services 1,659 617 2,276 Inter-segment cost of revenues- Services
192 21 (213) Segment cost of revenues - Equipment 596 52 648
Cost of revenues 2,447 690 (213) 2,924
Gross profit
381 239 620 Operating expenses (3) 571 118 689 Income with
respect to settlement agreement with Orange 217
217
Other income, net 41 4 45
Operating profit 68 125 193
Adjustments to presentation of Segment Adjusted EBITDA
–Depreciation and amortization 447 148 595 –Other (1) 47 (1) 46
Segment Adjusted EBITDA (2) 562 272 834
Reconciliation of profit for the year to
Adjusted EBITDA
Profit for the year 52
- Depreciation and amortization
595
- Finance costs, net
105
- Income tax expenses
36
- Other (1)
46
Adjusted EBITDA (2) 834
PARTNER COMMUNICATIONS COMPANY LTD.(An
Israeli Corporation)SEGMENT INFORMATION
New Israeli Shekels Year ended December 31,
2015 In millions
Cellular segment
Fixed-line segment
Elimination Consolidated Segment
revenue - Services 2,275 717 2,992 Inter-segment revenue - Services
22 189 (211) Segment revenue - Equipment 1,051 68 1,119
Total revenues 3,348 974 (211) 4,111 Segment cost of
revenues - Services 1,856 736 2,592 Inter-segment cost of revenues-
Services 187 24
(211)
Segment cost of revenues - Equipment 832 48 880
Cost of
revenues 2,875 808 (211) 3,472
Gross profit 473 166 639
Operating expenses (3) 506 134 640 Income with respect to
settlement agreement with Orange 61
61
Other income, net 44 3 47
Operating profit 72 35 107
Adjustments to presentation of Segment Adjusted EBITDA
–Depreciation and amortization (including impairment charges) 510
243 753 –Other (1) 15 1 16
Segment Adjusted EBITDA (2) 597
279 876
Reconciliation of loss for the year to
Adjusted EBITDA
Loss for the year (40)
- Depreciation and amortization
(including impairment charges)
753
- Finance costs, net
143
- Income tax expenses
4
- Other (1)
16
Adjusted EBITDA (2) 876
(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
New Israeli shekels
Convenience translation into U.S.
dollars
12 monthperiod ended December 31, 3
monthperiod ended December 31 12
monthperiod ended December 31, 3
monthperiod ended December 31, 2015
2016 2015 2016 2016 2016
(Audited) (Audited) (Unaudited)
(Unaudited) (Audited) (Unaudited)
In millions
CASH FLOWS FROM OPERATING ACTIVITIES: Cash generated from
operations (Appendix) 955 975
287
323 253 84 Income tax paid (33) (30)
(2)
(10) (8) (3) Net cash provided by operating activities 922 945 285
313 245 81
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of property and equipment (216) (127) (37) (30) (33)
(8) Acquisition of intangible assets (143) (69) (19) (17) (18) (4)
Short-term investment in deposits (452) (452) (118) (118) Interest
received 3 2 1 1 Proceeds from sale of property and equipment 1 7 1
3 2 1 Investment in PHI (1)
(1)
Proceeds from (repayment of) derivative financial instruments, net
* * * * Net cash used in investing activities (356)
(639) (55) (496) (166) (129)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from exercise of stock options granted to employees *
*
* * Interest paid (137)
(108)
(58)
(28)
(28) (7) Repayment of current borrowings (52)
(14)
Non-current borrowings received 675
250
250
65
65
Repayment of non-current borrowings (533)
(15)
(356)
(4)
(4)
(1)
Repayment of notes payables (308)
(643)
(308) (408) (167) (106) Net cash used in financing activities (303)
(516)
(722) (242) (134) (63)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
263
(210)
(492)
(425)
(55)
(111)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD
663
926
1,418
1,141
241
297
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
926
716
926
716
186 186
* 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
New Israeli shekels
Convenience translation into U.S.
dollars
12 monthperiod ended December 31, 3
monthperiod ended December 31, 12
monthperiod ended December 31, 3
monthperiod ended December 31, 2015
2016 2015 2016 2016 2016
(Audited) (Audited) (Unaudited)
(Unaudited) (Audited) (Unaudited)
In millions
Cash generated from operations: Profit (loss) for the period
(40) 52 (65) (7) 14 (2) Adjustments for: Depreciation and
amortization (including impairment) 641 565 174 138 147 36
Amortization (including impairment) of deferred expenses - Right of
use 112 30 85 9 8 2 Amortization of employee share based
compensation 17 45 7 9 12 2 Liability for employee rights upon
retirement, net (12) (3) (10) (1) Finance costs, net (8) 1 (9) (1)
* * Change in fair value of derivative financial instruments (2) *
(1) * * * Interest paid 137 108 58 28 28 7 Interest received (3)
(2) (1) * (1) * Deferred income taxes (40) 10 (39) (2) 3 (1) Income
tax paid 33 30
2
10 8 3 Capital loss (gain) from property and equipment * * * (1) *
* Changes in operating assets and liabilities: Decrease (increase)
in accounts receivable: Trade (183) 226 28 104 58 27 Other (13) (9)
(9) (17) (2) (4) Increase (decrease) in accounts payable and
accruals: Trade (5) (38) (58) (35) (10) (9) Other payables (12) *
(31) 38 * 10 Provisions 19 * 11 6 * 2 Deferred revenues with
respect to settlement agreement with Orange 325 (217) 175 (54) (56)
(14) Deferred revenues from HOT mobile 227 173 59 45
Other deferred revenues
(6) 10 1 4 3 1 Increase in deferred expenses - Right of use (34)
(80) (12) (28) (22) (8) Current income tax liability 11 (4) 10 (15)
(1) (4) Decrease (increase) in inventories 18 24 (29) (36) 6 (9)
Cash generated from operations 955 975
287
323 253 84
* Representing an amount of less than 1 million.
Reconciliation of Non-GAAP
Measures:
Adjusted Free
Cash Flow
New Israeli Shekels
Convenience translation into
U.S. Dollars
Convenience translation into
U.S. Dollars
12 month
period ended December 31,
12 month
period ended December 31,
3 month
period ended
December 31,
3 month
period ended December 31,
12 month
period ended
December 31,
3 month
period ended
December 31,
2015 2016 2015 2016 2016
2016 (Audited) (Audited) (Unaudited)
(Unaudited) (Audited) (Unaudited) In
millions Net cash provided by operating activities 922 945 285
313 245 81 Net cash used in investing activities (356) (639) (55)
(496) (166) (129) Short-term investment in deposits 452
452 118 118
Adjusted Free Cash Flow 566 758 230 269
197 70 Interest paid (137) (108) (58) (28) (28) (7)
Adjusted Free Cash Flow After Interest 429 650 172 241 169
63
Total Operating
Expenses (OPEX)
New Israeli Shekels
Convenience translation into
U.S. Dollars
Convenience translation into
U.S. Dollars
12 month
period ended December 31,
12 month
period ended December 31,
3 month
period ended
December 31,
3 month
period ended December 31,
12 month
period ended
December 31,
3 month
period ended
December 31,
2015 2016 2015 2016 2016
2016 (Audited) (Audited) (Unaudited)
(Unaudited) (Audited) (Unaudited) In
millions Cost of revenues – Services 2,592 2,276 698 555 592
144 Selling and marketing expenses 417 426 122 96 111 25 General
and administrative expenses 223 263 53 75 68 20 Depreciation and
amortization (2) (753) (595) (258) (147) (155) (38) Other (1) (16)
(46) (7) (9) (12) (3)
OPEX 2,463 2,324
608
570
604
148
(1) Mainly amortization of employee share based compensation.(2)
Including impairment charges.
Key Financial and Operating Indicators
(unaudited)*
NIS M unless otherwise stated Q4' 14 Q1' 15
Q2' 15 Q3' 15 Q4' 15 Q1' 16 Q2' 16
Q3' 16 Q4' 16 2015 2016
Cellular Segment Service Revenues 613 579 581
587 550 543 527 531 498
2,297 2,099 Cellular Segment Equipment
Revenues 282 277 271 234 269
244 188 139 158
1,051 729 Fixed-Line Segment Service Revenues 250
232 226 225 223 222 219
220 205 906 866
Fixed-Line Segment Equipment Revenues 18 18 16
12 22 23 17 12 11
68 63 Reconciliation for consolidation
(55)
(52) (50) (52) (57) (55)
(54) (53) (51) (211)
(213) Total Revenues 1,108 1,054 1,044
1,006 1,007 977 897 849 821
4,111 3,544 Gross Profit from Equipment
Sales 61 59 67 52 61 56
42 28 18 239 144
Operating Profit (Loss) 73 56 67 32
(48) 54 67 64 8
107 193 Cellular Segment Adjusted EBITDA 161
148 160 137 152 142 155
156 109 597 562
Fixed-Line Segment Adjusted EBITDA 88 79 76
59 65 80 73 64 55
279 272 Total Adjusted EBITDA 249
227 236 196 217 222 228
220 164 876 834 Adjusted
EBITDA Margin (%) 22% 22% 23% 19%
22% 23% 25% 26% 20%
21% 24% OPEX 630 604 601
650 608 612 572 570 570
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
61 217 Finance costs, net 36
18 46 40 39 24 28
30 23 143 105 Profit (loss)
24 25 9 (9) (65) 14
26 19 (7) (40) 52
Capital Expenditures (cash) 90 128 111
64 56 48 57 44 47
359 196 Capital Expenditures (additions) 145
50 84 51 86 34 40
44
84
271 202 Adjusted Free Cash Flow
71 21 24 291 230 114 160
215 269 566 758 Adjusted
Free Cash Flow After Interest 21 8 (28)
277 172 89 119 201 241
429 650 Net Debt 2,612 2,581
2,626 2,355 2,175 2,079 1,964
1,768 1,526 2,175 1,526
Cellular Subscriber Base (Thousands) 2,837 2,774
2,747 2,739 2,718 2,692 2,700
2,693 2,686 2,718 2,686
Post-Paid Subscriber Base (Thousands) 2,132 2,112
2,112 2,136 2,156 2,174 2,191
2,215 2,241 2,156 2,241
Pre-Paid Subscriber Base (Thousands) 705 662
635 603 562 518 509 478
445 562 445 Cellular ARPU (NIS)
71 69 70 71 67 67 65
66 62 69 65 Cellular
Churn Rate (%) 11.5% 12.7% 10.9% 10.8%
11.1% 11.2% 9.8% 9.7% 9.4%
46% 40% Number of Employees (FTE)
3,575 3,535 3,354 3,017 2,882
2,827 2,740 2,742 2,686
2,882 2,686
* See footnote 2 regarding use of non-GAAP measures.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170329006335/en/
Partner CommunicationsZiv Leitman, Tel:
+972-54-781-4951Chief Financial OfficerorLiat Glazer Shaft, Tel:
+972-54-781-5051Head of Investor Relations and Corporate
ProjectsE-mail: investors@partner.co.il
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