ROSH HA'AYIN, Israel,
March 25, 2021 /PRNewswire/ --
2020 Annual Highlights (compared with 2019)
- Total Revenues: NIS
3,189 million (US$ 992
million), a decrease of 1%
- Service Revenues: NIS
2,508 million (US$ 780
million), a decrease of 2%
- Equipment Revenues: NIS
681 million (US$ 212 million),
an increase of 1%
- Total Operating Expenses
(OPEX) 2: NIS
1,871 million (US$ 582
million), a decrease of 1%
- Adjusted EBITDA: NIS
822 million (US$ 256 million),
a decrease of 4%
- Adjusted EBITDA Margin2: 26% of
total revenues, unchanged from 2019
- Profit for the Year:
NIS 17 million (US$ 5 million) a decrease of 11%
- Net Debt: NIS 657
million (US$ 204 million), a
decrease of NIS 300 million
- Adjusted Free Cash Flow (before
interest)2: NIS 72
million (US$ 22 million), an
increase of NIS 23 million
- Cellular ARPU: NIS
51 (US$ 16), a decrease of
11%
- Cellular Subscriber Base: approximately 2.84
million at year-end, an increase of 179 thousand
- Fiber-Optic Subscriber Base: 139
thousand subscribers at year-end, an increase of 63
thousand
- Homes Connected (HC) to Partner's
Fiber-Optic
Infrastructure: 465 thousand at
year-end, an increase of 141 thousand
- Infrastructure-Based Internet Subscriber Base:
329 thousand subscribers at year-end, an increase of
61 thousand
- TV Subscriber Base: 232 thousand
subscribers at year-end, an increase of 44
thousand
Fourth quarter 2020 highlights (compared with fourth quarter
2019)
- Total Revenues: NIS 808
million (US$ 251 million), a
decrease of 3%
- Service Revenues: NIS
632 million (US$ 197 million),
a decrease of 1%
- Equipment Revenues: NIS
176 million (US$ 55 million),
a decrease of 11%
- Total Operating Expenses (OPEX): NIS 480 million (US$ 149
million), an increase of 3%
- Adjusted EBITDA: NIS
203 million (US$ 63 million),
a decrease of 6%
- Adjusted EBITDA Margin: 25% of total revenues
compared with 26%
- Profit for the Period: NIS 5 million (US$ 2
million), a decrease of 29%
- Net Debt: NIS 657
million (US$ 204 million), a
decrease of NIS 300 million
- Adjusted Free Cash Flow (before interest):
negative NIS 3 million
(US$ -1 million), a decrease of
NIS 19 million
- Cellular ARPU: NIS
49 (US$ 15), a decrease of
11%
- Cellular Subscriber Base: approximately 2.84
million at quarter-end, an increase of 179 thousand since Q4 2019
and an increase of 74 thousand in the quarter
- Fiber-Optic Subscriber Base: 139
thousand subscribers at quarter-end, an increase of 63
thousand since Q4 2019 and an increase of 19 thousand
in the quarter
- Homes Connected (HC) to Partner's
Fiber-Optic Infrastructure: 465 thousand at
quarter-end, an increase of 141 thousand since Q4
2019 and an increase of 33 thousand in the
quarter
- Infrastructure-Based Internet Subscriber Base:
329 thousand subscribers at quarter-end, an increase
of 61 thousand since Q4 2019 and an increase of 18 thousand in the
quarter
- TV Subscriber Base: 232 thousand
subscribers at quarter-end, an increase of 44
thousand since Q4 2019 and an increase of 8 thousand
in the quarter
[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.
Partner Communications Company
Ltd. ("Partner" or the "Company")
(NASDAQ: PTNR) (TASE: PTNR), a leading Israeli communications
provider, announced today its results for the quarter and year
ended December 31, 2020.
Commenting on the results for the fourth quarter and full
year 2020, Mr. Isaac Benbenisti, CEO
of Partner, noted:
"In summary of the year of COVID-19 and its
operational complexity, Partner was able to maintain stability in
revenues and to present a net profit. During the year 2020,
hundreds of thousands of subscribers joined the Company's services,
in cellular, internet and television. During the past year, Partner
has expanded its growth engines – in cellular with the launch of
the 5G network, 'Partner 5G', in internet with the further rollout
of our independent fiber-optic infrastructure, 'Partner Fiber', and
in TV, the fastest growing TV service in Israel, 'Partner TV', with the deepening of
our cooperation with Netflix in a unique bundled offer.
In cellular, Partner's subscriber base grew by 179 thousand
cellular subscribers, net, in 2020, to total approximately 2.84
million, alongside the continued increase in customer loyalty, with
the lowest churn rates for over a decade.
In 2020, we made a big leap in the Group's activity in the
internet sphere, with a 23% increase in the Company's
infrastructure-based internet subscriber base, to total 329
thousand subscribers at year-end, the growth resulting from the
joining of tens of thousands of new subscribers to services over
'Partner Fiber', the Company's independent fiber-optic
infrastructure. Partner's independent fiber-optic infrastructure
already reaches more than
760 thousand households as of today, of
which more than 500 thousand reside in buildings already
connected to the infrastructure and more than 150 thousand of which
are already subscribed to internet services over Partner's
fiber-optic infrastructure.
In 2020, Partner TV was again the fastest growing of all
television services in Israel,
with 44 thousand subscribers joining, net, during the year. As of
today, 'Partner TV' is enjoyed by
approximately 234 thousand subscribers, most of them also
customers of the Company's internet services.
At the outset of the year 2021, Partner stands in an excellent
position for growth in all areas of activity, thanks to the
long-term preparations we have made in recent years, which have
included both a significant reduction in debt and investment in
independent communications infrastructures that enable us to
increase profitability."
Mr. Tamir Amar, Partner's
Chief Financial Officer & VP Fiber-Optics, commented on the
results:
"The steps we've taken during the year, alongside the continued
subscriber growth in the cellular and fixed-line segments lessened
the impact of COVID-19 on our results. In the fourth quarter and
during 2020 as a whole, the positive momentum in our growth engines
continued, while accelerating the rollout of our fiber-optic
infrastructure. Our success this year in the
5G frequencies tender and our compliance with the
milestones in the deployment of 5G sites set by the Ministry of
Communications will enable us to advance the rollout and connect
more and more customers to the 5G network, and gradually expand the
range of advanced services offered to Partner's growing subscriber
base. In addition, the Company managed to position itself in first
place, together with another operator, in bidding for a deployment
grant in 5G, thus benefiting from additional financial support for
the continued deployment of 5G sites, in addition to our
eligibility for a significant discount on frequency fees, subject
to certain tender conditions.
Our cellular subscriber base increased this year by 179
thousand. The increase included 74 thousand subscribers, net, who
joined in the last quarter of the year, including 25 thousand
subscribers to twelve-month data package for modems provided to
students by the Ministry of Education as part of their COVID-19
crisis program. The churn rate in the fourth quarter amounted to
7.2%, similar to that in the corresponding quarter last year. ARPU
in the fourth quarter totaled NIS 49
compared to NIS 55 in the fourth
quarter last year, mainly reflecting the negative impact of the
decline in roaming service revenues as a result of the sharp
decline in international travel due to COVID-19.
In the fixed-line segment, our fiber-optic infrastructure
already reaches more than 760 thousand households as of today. The
number of Homes Connected (HC) within buildings connected to our
fiber-optic infrastructure was 465 thousand at year-end 2020,
an increase of 141 thousand in the year and 33 thousand in the
fourth quarter. As of the end of 2020, Partner has 139 thousand
fiber-optic subscribers, an increase of 63 thousand in the year,
and 19 thousand in the fourth quarter. The number of
fiber-optic subscribers from households within HC buildings
reflects an HC penetration rate of approximately 30% as of the end
of 2020, compared with approximately 23% at the end of 2019.
Regarding television, the number of subscribers grew by 8
thousand in the last quarter of 2020, bringing the total increase
this year to 44 thousand. As of today, the number of TV subscribers
totals approximately 234 thousand. The rate of growth from the
beginning of 2021 mainly reflects the temporary impact of the
technical malfunction in the television broadcasts during the
second week of January 2021.
As we expected, we finished the fourth quarter of 2020 with
only a small decrease of 6% in Adjusted EBITDA compared to the
corresponding quarter, in light of the continued cost-cutting
measures along with growth in the fixed-line activity which
partially offset the impact of the almost complete cessation of
international travel due to COVID-19.
Looking ahead, the Company expects that, in the first quarter of
2021, the negative impact will continue as a result of the almost
complete cessation of air travel and closure of stores for part of
the quarter; however, the overall impact is not expected to differ
materially from its scope in the preceding quarter.
The Adjusted Free Cash Flow (before interest and including lease
payments) for 2020 totaled NIS 72 million. CAPEX totaled
NIS 573 million. For the fourth
quarter, the Adjusted Free Cash Flow (before interest and including
lease payments) was negative and totaled approximately minus
NIS 3 million, with CAPEX totaling NIS
156 million. The investments in 2020 reflect the continued
efforts of the Company to expand the deployment of the fiber-optic
infrastructure, for which we expect to complete the major rollout
phase during the year 2023, and the continued penetration of
the television market. These investments continue to be made
possible as a result of Partner's financial stability and strong
balance sheet, and they continue even during the challenging period
of the COVID-19 crisis.
Net debt was NIS 657 million at
the end of the year 2020, compared with NIS
957 million at the end of last year, a decrease of
NIS 300 million, mainly reflecting
the Company's successful capital raising in January 2020 in the amount of NIS 276 million, net. The Company's net debt to
Adjusted EBITDA ratio stood at 0.8 at year-end 2020, which
demonstrates the Company's financial strength."
Q4 2020 compared with Q3 2020
NIS
Million
|
Q3'20
|
Q4'20
|
Comments
|
Service
Revenues
|
631
|
632
|
The results reflected
a stability in service revenues in both the cellular and the
fixed-line segments
|
Equipment
Revenues
|
169
|
176
|
The increase
reflected a higher volume of equipment sales mainly in the
fixed-line segment
|
Total
Revenues
|
800
|
808
|
|
Gross profit from
equipment sales
|
38
|
40
|
|
OPEX
|
475
|
480
|
The increase
reflected a reduction in the intensity of the cost-cutting
measures compared with the previous quarter
|
Adjusted
EBITDA
|
204
|
203
|
|
Profit (loss) for the
period
|
(5)
|
5
|
The increase in
profit mainly reflected the decrease in finance costs, net
primarily due to one-time expenses of NIS 7 million in
Q3'20
|
Capital Expenditures
(cash)
|
147
|
156
|
|
Adjusted Free Cash
Flow (before interest payments)
|
21
|
(3)
|
The decrease resulted
mainly from changes in operating assets and liabilities and an
increase in cash used in capital expenditures
|
Net Debt
|
646
|
657
|
|
|
Q3'20
|
Q4'20
|
Comments
|
Cellular Subscribers
(end of period, thousands)
|
2,762
|
2,836
|
Increase of 58
thousand Post-Paid subscribers (of which 25 thousand from Ministry
of Education) and increase of 16 thousand Pre-Paid
subscribers
|
Monthly Average
Revenue per Cellular User (ARPU) (NIS)
|
51
|
49
|
|
Quarterly Cellular
Churn Rate (%)
|
7.3%
|
7.2%
|
|
Fiber-Optic
Subscribers (end of period, thousands)
|
120
|
139
|
Active subscribers to
an end-to-end service including both Partner's fiber-optic
infrastructure and access to the internet
|
Homes Connected to
the Fiber-Optic Infrastructure (HC) end of period,
thousands)
|
432
|
465
|
The total number of
households within buildings connected to the Partner fiber-optic
infrastructure
|
Infrastructure-Based
Internet Subscribers (end of period, thousands)
|
311
|
329
|
Active subscribers to
an end-to-end service including both infrastructure (either through
the wholesale market on Bezeq/Hot infrastructure and or through
Partner's fiber-optic infrastructure) and access to the
internet
|
TV Subscribers (end
of period, thousands)
|
224
|
232
|
|
Key Financial Results
NIS MILLION
(except EPS)
|
2016*
|
2017*
|
2018*
|
2019
|
2020
|
Revenues
|
3,544
|
3,268
|
3,259
|
3,234
|
3,189
|
Cost of
revenues
|
2,924
|
2,627
|
2,700
|
2,707
|
2,664
|
Gross
profit
|
620
|
641
|
559
|
527
|
525
|
S,G&A and credit
losses
|
689
|
465
|
471
|
468
|
459
|
Income with respect
to settlement
agreement with Orange
|
217
|
108
|
|
|
|
Other
income
|
45
|
31
|
28
|
28
|
30
|
Operating
profit
|
193
|
315
|
116
|
87
|
96
|
Finance costs,
net
|
105
|
180
|
53
|
68
|
69
|
Income tax
expenses
|
36
|
21
|
7
|
0
|
10
|
Profit for the
year
|
52
|
114
|
56
|
19
|
17
|
Earnings per share
(basic, NIS)
|
0.33
|
0.70
|
0.34
|
0.12
|
0.09
|
* The Company adopted IFRS 15 from the beginning of 2017 and
IFRS 16 from the beginning of 2019. For more information see the
Company's Annual Report on Form 20-F for the year ended
December 31, 2020.
NIS MILLION
(except EPS)
|
Q4'19
|
Q1'20
|
Q2'20
|
Q3'20
|
Q4'20
|
Revenues
|
834
|
807
|
774
|
800
|
808
|
Cost of
revenues
|
693
|
655
|
653
|
677
|
679
|
Gross
profit
|
141
|
152
|
121
|
123
|
129
|
S,G&A and credit
losses
|
116
|
122
|
108
|
111
|
118
|
Other
income
|
5
|
6
|
7
|
8
|
9
|
Operating
profit
|
30
|
36
|
20
|
20
|
20
|
Finance costs,
net
|
20
|
19
|
13
|
24
|
13
|
Income tax
expenses
|
3
|
7
|
0
|
1
|
2
|
Profit (Loss) for the
period
|
7
|
10
|
7
|
(5)
|
5
|
Earnings (Loss) per
share (basic, NIS)
|
0.05
|
0.05
|
0.04
|
(0.03)
|
0.03
|
NIS MILLION
(except EPS)
|
Q4'19
|
Q4'20
|
%
Change
|
Revenues
|
834
|
808
|
-3%
|
Cost of
revenues
|
693
|
679
|
-2%
|
Gross
profit
|
141
|
129
|
-9%
|
Operating
profit
|
30
|
20
|
-33%
|
Profit for the
period
|
7
|
5
|
-29%
|
Earnings per share
(basic, NIS)
|
0.05
|
0.03
|
|
Adjusted Free Cash
Flow (before interest)
|
16
|
(3)
|
|
Key Operating Indicators
|
2016*
|
2017*
|
2018*
|
2019
|
2020
|
Adjusted EBITDA (NIS
million)
|
834
|
917
|
722
|
853
|
822
|
Adjusted EBITDA (as a
% of total revenues)
|
24%
|
28%
|
22%
|
26%
|
26%
|
Adjusted Free Cash
Flow (NIS million)
|
758
|
599
|
124
|
49
|
72
|
Cellular Subscribers
(end of period, thousands)
|
2,686
|
2,662
|
2,646
|
2,657
|
2,836
|
Estimated Cellular
Market Share (%)
|
26%
|
25%
|
25%
|
25%
|
27%
|
Annual Cellular Churn
Rate (%)
|
40%
|
38%
|
35%
|
31%
|
30%
|
Average Monthly
Revenue per Cellular Subscriber (ARPU) (NIS)
|
65
|
62
|
58
|
57
|
51
|
Fiber-Optic
Subscribers (end of period, thousands)
|
|
|
|
76
|
139
|
Homes Connected to
fiber-optic network (end of period, thousands)
|
|
|
|
324
|
465
|
Infrastructure-Based
Internet Subscribers (end of period, thousands)
|
|
|
|
268
|
329
|
TV subscribers (end
of period, thousands)
|
|
43
|
122
|
188
|
232
|
* The Company adopted IFRS 15 from the beginning of 2017 and
IFRS 16 from the beginning of 2019. For more information see the
Company's Annual Report on Form 20-F for the year ended
December 31, 2020.
|
Q4'19
|
Q4'20
|
Change
|
Adjusted EBITDA (NIS
million)
|
217
|
203
|
-6%
|
Adjusted EBITDA
margin (as a % of total revenues)
|
26%
|
25%
|
-1
|
Quarterly Cellular
Churn Rate (%)
|
7.2%
|
7.2%
|
-
|
Monthly Average
Revenue per Cellular User (ARPU) (NIS)
|
55
|
49
|
-6
|
Partner Consolidated Results
|
Cellular
Segment
|
Fixed-Line
Segment
|
Elimination
|
Consolidated
|
NIS
Million
|
2019
|
2020
|
Change
%
|
2019
|
2020
|
Change
%
|
2019
|
2020
|
2019
|
2020
|
Change
%
|
Total
Revenues
|
2,369
|
2,208
|
-7%
|
1,028
|
1,129
|
+10%
|
(163)
|
(148)
|
3,234
|
3,189
|
-1%
|
Service
Revenues
|
1,798
|
1,663
|
-8%
|
925
|
993
|
+7%
|
(163)
|
(148)
|
2,560
|
2,508
|
-2%
|
Equipment
Revenues
|
571
|
545
|
-5%
|
103
|
136
|
+32%
|
-
|
-
|
674
|
681
|
+1%
|
Operating
Profit
|
77
|
73
|
-5%
|
10
|
23
|
+130%
|
-
|
-
|
87
|
96
|
+10%
|
Adjusted
EBITDA
|
635
|
533
|
-16%
|
218
|
289
|
+33%
|
-
|
-
|
853
|
822
|
-4%
|
|
Cellular
Segment
|
Fixed-Line
Segment
|
Elimination
|
Consolidated
|
NIS
Million
|
Q4'19
|
Q4'20
|
Change
%
|
Q4'19
|
Q4'20
|
Change
%
|
Q4'19
|
Q4'20
|
Q4'19
|
Q4'20
|
Change
%
|
Total
Revenues
|
610
|
551
|
-10%
|
264
|
293
|
+11%
|
(40)
|
(36)
|
834
|
808
|
-3%
|
Service
Revenues
|
438
|
416
|
-5%
|
238
|
252
|
+6%
|
(40)
|
(36)
|
636
|
632
|
-1%
|
Equipment
Revenues
|
172
|
135
|
-22%
|
26
|
41
|
+58%
|
-
|
-
|
198
|
176
|
-11%
|
Operating Profit
(loss)
|
30
|
27
|
-10%
|
0
|
(7)
|
|
-
|
-
|
30
|
20
|
-33%
|
Adjusted
EBITDA
|
156
|
138
|
-12%
|
61
|
65
|
+7%
|
-
|
-
|
217
|
203
|
-6%
|
Financial Review
In 2020, total revenues were NIS 3,189 million (US$ 992
million), a decrease of 1% from NIS
3,234 million in 2019.
Annual service revenues in 2020 totaled NIS 2,508 million (US$ 780
million), a decrease of 2% from NIS
2,560 million in 2019.
Service revenues for the cellular segment in 2020
totaled NIS 1,663 million
(US$ 517 million), a decrease of 8%
from NIS 1,798 million in 2019. The
decrease was mainly the result of the negative impact of the
COVID-19 crisis which caused a significant reduction in revenues
from roaming services, and the continued price erosion of cellular
services due to on-going competitive market conditions. These
decreases in service revenues were partially offset by an increase
in interconnect revenues due to the significant increase in
incoming call volumes related to the COVID-19 crisis, and an
increase in revenues due to the growth of the cellular subscriber
base.
Service revenues for the fixed-line segment in 2020
totaled NIS 993 million (US$ 309 million), an increase of 7% from
NIS 925 million in 2019. This
increase mainly reflected the growth in internet and TV services,
which was partially offset by a decline in revenues from
international calling services (including the market for wholesale
international traffic) which continue to be adversely affected by
the increased penetration of internet-based solutions.
In Q4 2020, total revenues were NIS 808 million (US$
251 million), a decrease of
3% from NIS 834 million in Q4
2019.
Service revenues in Q4 2020 totaled NIS 632 million (US$ 197
million), a decrease of 1% from NIS
636 million in Q4 2019.
Service revenues for the cellular segment in Q4 2020
totaled NIS 416 million (US$ 129 million), a decrease of 5% from
NIS 438 million in Q4 2019. The
decrease was mainly the result of the negative impact of the
COVID-19 crisis on roaming service revenues and the continued price
erosion of cellular services due to the continued competitive
market conditions, which were partially offset by an increase in
interconnect revenues and by an increase in revenues due to the
growth of the cellular subscriber base.
Service revenues for the fixed-line segment in Q4
2020 totaled NIS 252 million
(US$ 78 million), an increase of 6%
from NIS 238 million in Q4 2019. The
increase mainly reflected higher revenues from the growth in
internet and TV services, which were partially offset by a decline
in revenues from international calling services.
Equipment revenues in 2020 totaled NIS 681 million (US$ 212
million), an increase of 1% from NIS
674 million in 2019, principally reflecting significant
increases in cellular equipment sales to wholesale customers and in
sales of fixed-line equipment for both business and private
customers, partially offset by lower volumes of retail sales of
cellular equipment following the closure of some sales points at
certain COVID-19-related lockdown periods during the year.
Gross profit from equipment sales in 2020 was
NIS 145 million (US$ 45 million), compared with NIS 144 million in 2019, an increase of 1%. The
increase mainly reflected an increase in gross profit from sales of
fixed-line equipment, partially offset by a decrease in gross
profit from sales of cellular equipment.
Equipment revenues in Q4 2020 totaled NIS 176 million (US$ 55
million), a decrease of 11% from NIS
198 million in Q4 2019, mainly reflecting a decrease in
equipment sales in the cellular segment, largely a result of the
adverse impact of the COVID-19 crisis on retail customer sales,
partially offset by increased sales in the fixed-line segment.
Gross profit from equipment sales in Q4 2020
was NIS 40 million (US$ 12 million), compared with NIS 37 million in Q4 2019, an increase of 8%,
mainly reflecting a change in the product mix which led to an
increase in the average profit per sale.
Total operating expenses ('OPEX') totaled
NIS 1,871 million (US$ 582 million) in 2020, a decrease of 1% or
NIS 14 million from 2019. The
decrease mainly reflected a reduction in workforce and related
expenses as part of the cost-cutting measures taken to mitigate the
impact of the COVID-19 crisis on revenues, a decrease in wholesale
internet infrastructure access expenses following receipt of a
government-mandated refund from Bezeq of approximately NIS 20 million of surplus payments for access to
the wholesale internet infrastructure in previous years and a
decrease in international calling services expenses. The
decreases in these expenses were partially offset by increases in
interconnect expenses due to the significant increase in outgoing
call volumes related to the COVID-19 crisis. Including
depreciation, amortization and other expenses (mainly amortization
of employee share-based compensation), OPEX in 2020 decreased by 2%
compared with 2019.
Total operating expenses ('OPEX') totaled NIS 480 million (US$ 149
million) in Q4 2020, an increase of 3% or NIS 13 million from Q4 2019, mainly reflecting an
increase in interconnect expenses, partially offset by a decrease
in workforce and related expenses and in international calling
services expenses. Including depreciation and amortization
expenses and other expenses (mainly amortization of employee share
based compensation), OPEX in Q4 2020 increased by 2% compared with
Q4 2019.
Operating profit for 2020 totaled NIS 96 million (US$ 30
million), an increase of 10% compared with NIS 87 million in 2019. The increase in operating
profit mainly reflected the decrease in operating expenses
including depreciation and amortization expenses, which more than
offset the decrease in service revenues.
Adjusted EBITDA in 2020 totaled NIS 822 million (US$ 256
million), a decrease of 4% from NIS 853 million in
2019. As a percentage of total revenues, Adjusted EBITDA in 2020
was 26%, unchanged from 2019.
Adjusted EBITDA for the cellular segment was
NIS 533 million (US$ 166 million) in 2020, a decrease of 16% from
NIS 635 million in 2019, largely
reflecting the decrease in cellular segment service revenues and
the decrease in gross profit from equipment sales which were
partially offset by the decrease in operating expenses. The
decrease in operating expenses for the cellular segment was
principally due to a decrease in workforce and related expenses
which were partially offset by an increase in interconnect expenses
due to the significant increase in outgoing call volumes related to
the COVID-19 crisis. As a percentage of total cellular segment
revenues, Adjusted EBITDA for the cellular segment in 2020 was 24%
compared with 27% in 2019.
Adjusted EBITDA for the fixed-line
segment was NIS 289 million
(US$ 90 million) in 2020, an increase
of 33% from NIS 218 million in 2019,
mainly reflecting the growth in TV and internet services and the
increase in gross profit from fixed-line equipment sales, which
were partially offset by the increase in total operating expenses.
The increase in total operating expenses for the fixed-line segment
principally reflected increased workforce and related
expenses related to the growth in fixed-line segment services
and an increase in interconnect expenses, partially offset by the
receipt of a government mandated refund from Bezeq of approximately
NIS 20 million of surplus payments
for access to the wholesale internet infrastructure in previous
years and a decrease in international calling
services expenses. As a percentage of total fixed-line segment
revenues, Adjusted EBITDA for the fixed-line segment was 26% in
2020, compared with 21% in 2019.
Operating profit for Q4 2020 was 20 million
(US$ 6 million), a decrease of 33%
compared with NIS 30 million in Q4
2019.
Adjusted EBITDA in Q4 2020 totaled NIS
203 million (US$ 63
million), a decrease of 6% from NIS 217 million in Q4
2019. As a percentage of total revenues, Adjusted EBITDA in Q4 2020
was 25% compared with 26% in Q4 2019.
Adjusted EBITDA for the cellular segment was
NIS 138 million (US$ 43 million) in Q4 2020, a decrease of 12%
from NIS 156 million in Q4 2019,
largely reflecting the decrease in cellular service revenues mainly
as a result of the COVID-19 crisis, the increase in interconnect
expenses and the decrease in gross profit from equipment sales,
partially offset by a decrease in various cellular operating
expenses including in workforce expenses and other cost-cutting
measures. As a percentage of total cellular segment revenues,
Adjusted EBITDA for the cellular segment was 25% in Q4 2020,
compared with 26% in Q4 2019.
Adjusted EBITDA for the fixed-line segment was
NIS 65 million (US$ 20 million) in Q4 2020, an increase of 7%
from NIS 61 million in Q4 2019,
mainly reflecting the increase in fixed-line segment service
revenues and the increase in gross profit from equipment
sales, which were partially offset by an increase in fixed-line
operating expenses, including in workforce and related
expenses related to the growth in fixed-line segment services.
As a percentage of total fixed-line segment revenues,
Adjusted EBITDA for the fixed-line segment was 22% in Q4 2020,
compared with 23% in Q4 2019.
Finance costs, net in 2020 were NIS 69 million (US$ 22
million), an increase of 1% compared with NIS 68 million in 2019. The increase mainly
reflected the one-time expense in an amount of approximately
NIS 7 million relating to the partial
early repayment of the Company's Notes Series F during the year,
partially offset by a decrease in lease interest and an increase in
interest from cash and deposits.
Finance costs, net in Q4 2020 were NIS 13 million (US$ 4
million), a decrease of 35% compared with NIS 20 million in Q4 2019. The decrease mainly
reflected lower interest expenses due to the lower average debt
level in Q4 2020 compared with Q4 2019.
Income tax expenses for 2020 were NIS 10 million (US$ 3 million),
compared with no income tax expenses in 2019. In 2019, a one-time
income of NIS 6 million was recorded
in income tax expenses.
Income tax expenses in Q4 2020 were NIS 2 million (US$ 1
million), a decrease of 33% compared with NIS 3 million in Q4 2019.
Overall, the Company's profit in 2020 totaled
NIS 17 million (US$
5 million), a decrease of 11% compared with
profit of NIS 19 million in 2019.
Based on the weighted average number of shares outstanding
during 2020, basic earnings per share or ADS, was
NIS 0.09 (US$
0.03) a decrease of 25% compared with basic earnings per
share of NIS 0.12 in 2019.
Profit in Q4 2020 was NIS 5
million (US$ 2 million), a
decrease of 29% compared with NIS 7
million in Q4 2019. The profit in Q4 2019 included an
increase of NIS 12 million as a
result of the change in the estimated useful life of the cellular
license.
Based on the weighted average number of shares outstanding
during Q4 2020, basic earnings per share or ADS, was
NIS 0.03 (US$
0.01) compared with basic earnings per share or ADS, of
NIS 0.05 in Q4 2019.
Cellular Segment Operational Review
At the end of 2020, the Company's cellular subscriber
base (including mobile data, 012 Mobile subscribers and
M2M subscriptions) was approximately 2.84 million, including
approximately 2.50 million Post-Paid subscribers or 88% of the
base, and 341 thousand Pre-Paid subscribers, or 12% of the
subscriber base.
Over the year 2020, the cellular subscriber base increased by
179 thousand subscribers. The Post-Paid subscriber base increased
by 129 thousand subscribers, and the Pre-Paid subscriber base
increased by 50 thousand subscribers. The increase in the Post-Paid
subscriber base included approximately 25 thousand subscribers to a
time-limited 12 month data package for modems provided to students
by the Ministry of Education as part of their COVID-19 crisis
program. As part of the same program, a further approximate
42,000 subscribers are expected to join the Post-Paid subscriber
base during the first half of 2021.
Total cellular market share (based on the number of
subscribers) at the end of 2020 was estimated to be approximately
27%, compared with 25% in 2019.
The annual churn rate for cellular subscribers in
2020 was 30%, compared with 31% in 2019 and with 35% in 2018.
The monthly Average Revenue Per User ("ARPU") for
cellular subscribers in 2020 was NIS
51 (US$ 16), a decrease of 11%
from NIS 57 in 2019. The decrease
resulted from the impact of the COVID-19 crisis on roaming service
revenues and the continued price erosion of cellular services due
to the continued competitive market conditions, which were
partially offset by an increase in interconnect revenues due to the
significant increase in incoming call volumes related to the
COVID-19 crisis and the contribution of Partner's value
strategy, Partner More.
During the fourth quarter of 2020, the cellular subscriber
base increased net by 74 thousand subscribers. The
Post-Paid subscriber base increased by 58 thousand subscribers and
the Pre-Paid subscriber base increased by 16 thousand subscribers.
The increase in the Post-Paid subscriber base included
approximately 25 thousand subscribers to a time-limited 12-month
data package for modems provided to students by the Ministry of
Education as part of their COVID-19 crisis program.
The quarterly churn rate for cellular subscribers in
Q4 2020 was 7.2%, unchanged from Q4 2019.
The monthly Average Revenue Per User ("ARPU") for
cellular subscribers in Q4 2020 was NIS
49 (US$ 15), a decrease of 11%
from NIS 55 in Q4 2019, largely for
the same reasons as the annual decrease in ARPU.
Fixed-Line Segment Operational Review
At the end of 2020, the Company's fiber-optic subscriber
base was 139 thousand subscribers, an increase, net, of 63
thousand subscribers in the year, and of 19 thousand subscribers
during the fourth quarter of 2020.
At the end of 2020, the Company's
infrastructure-based internet subscriber base was
329 thousand subscribers, an increase, net, of 61 thousand
subscribers in the year, and of 18 thousand subscribers during the
fourth quarter of 2020.
At the end of 2020, households in buildings connected to our
fiber-optic infrastructure (HC) totaled 465 thousand, an
increase of 141 thousand in the year, and of 33 thousand
subscribers during the fourth quarter of 2020.
At the end of 2020, the Company's TV subscriber
base totaled 232 thousand subscribers, an increase, net,
of 44 thousand subscribers in the year, and of 8 thousand
subscribers during the fourth quarter of 2020.
Funding and Investing Review
In 2020, Adjusted Free Cash Flow (including lease
payments) totaled NIS 72
million (US$ 22 million), an
increase of 47% from NIS 49 million
in 2019.
Cash generated from operating activities decreased
by 6% to NIS 786 million
(US$ 244 million) in 2020 from
NIS 837 million in 2019, mainly
reflecting the decrease in Adjusted EBITDA.
Lease payments (principal and interest), recorded in
cash flows from financing activities under IFRS 16 totaled
NIS 147 million (US$ 46 million) in 2020, a decrease of 8% from
NIS 159 million in 2019.
Cash capital expenditures (Capex payments), as
represented by cash flows used for the acquisition of property and
equipment and intangible assets, were NIS
573 million (US$ 178 million)
in 2020, a decrease of 9% from NIS 629
million in 2019.
In Q4 2020, Adjusted Free Cash Flow (including lease
payments) was negative and totaled minus NIS 3 million (US$ -1
million), a decrease of NIS 19
million compared with NIS 16
million in Q4 2019.
Cash generated from operating activities totaled
NIS 182 million (US$ 57 million) in Q4 2020, an increase of 2%
from NIS 178 million in Q4 2019.
Lease payments (principal and interest), recorded in cash
flows from financing activities under IFRS 16, totaled NIS 32 million (US$ 10
million) in Q4 2020, a decrease of 9% from Q4 2019.
Cash capital expenditures (CAPEX payments), as
represented by cash flows used for the acquisition of property and
equipment and intangible assets, were NIS
156 million (US$ 49 million)
in Q4 2020, an increase of 23% from NIS 127
million in Q4 2019.
The level of net debt at the end of 2020 amounted to
NIS 657 million (US$ 204 million), compared with NIS 957 million at the end of 2019, a decrease of
NIS 300 million. The decrease mainly
reflected the Company's share issuance in January 2020 for which the total net
consideration received was approximately NIS
276 million.
Conference Call Details
Partner will host a conference call to discuss its financial
results on Thursday, March 25, 2021
at 11.00 a.m. Eastern Time /
5.00 p.m. Israel
Time.
Please dial the following numbers (at least 10 minutes before
the scheduled time) in order to participate:
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:
http://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 25, 2021
until April 8, 2021, at the following
numbers:
International: +972.3.925.5921
North America toll-free:
+1.888.326.9310
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. In particular, this
press release communicates our belief that (i) we are in an
excellent position for growth in all areas of activity and to
increase profitability, (ii) we will be able to advance the rollout
and connect more customers to our 5G network and gradually expand
the range of services offered, and we may benefit from additional
financial support for the continued deployment of 5G sites and a
significant discount on frequency fees, subject to certain
conditions, (iii) the overall negative impact of COVID-19 will not
differ materially from its scope in the preceding quarter, and (iv)
we will further expand the deployment of the fiber optic
infrastructure, for which we expect to complete the major rollout
phase during the year 2023, and continue to penetrate the
television market. 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 in
particular (i) the severity and duration of the impact on our
business of the current health crisis, including employee absences
and disruptions in our equipment supply chain (ii)
unexpected technical issues which may arise as we rollout our 5G
network and expand the range of services, and as we deploy the
fiber optic infrastructure, and (iii) currently unanticipated
demands on our financial resources which could limit our ability to
pursue our strategic objectives. In light of the current
unreliability of predictions as to the ultimate severity and
duration of the health crisis, as well as the specific regulatory
and business risks facing our business, future results may differ
materially from those currently anticipated. 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, 2020: US
$1.00 equals NIS 3.215. 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
|
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
divided
by
Total
revenues
|
|
Adjusted Free
Cash Flow
|
Net cash provided by
operating activities
add
Net cash used in
investing activities
deduct
Proceeds from
(investment in) deposits, net
deduct
Lease principal
payments
deduct
Lease interest
payments
|
Net cash provided by
operating activities
add
Net cash used in
investing activities
|
Total Operating
Expenses (OPEX)
|
Cost of service
revenues
add
Selling and marketing
expenses
add
General and
administrative expenses
add
Credit losses
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,
Credit
losses
|
Net Debt
|
Current maturities of
notes payable and borrowings
add
Notes
payable
add
Borrowings from
banks
add
Financial liability
at fair value
deduct
Cash and cash
equivalents
deduct
Short-term and
long-term deposits
|
Sum of:
Current maturities of
notes payable and borrowings,
Notes
payable,
Borrowings from
banks,
Financial liability
at fair value
Less
Sum of:
Cash and cash
equivalents,
Short-term
deposits,
Long-term
deposits.
|
About Partner Communications
Partner Communications Company Ltd. is a leading Israeli
provider of telecommunications services (cellular, fixed-line
telephony, internet services and TV 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:
|
Tamir
Amar
|
Amir
Adar
|
Chief Financial
Officer & VP Fiber-Optics
|
Head of Investor
Relations and Corporate Projects
|
Tel:
+972-54-781-4951
|
Tel:
+972-54-781-5051
|
|
E-mail:
investors@partner.co.il
|
PARTNER
COMMUNICATIONS COMPANY LTD. (An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
|
|
New Israeli
Shekels
|
Convenience
translation
into U.S.
Dollars
|
|
|
December
31,
|
|
|
2019
|
2020
|
2020
|
|
|
In
millions
|
CURRENT
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
299
|
376
|
117
|
Short-term
deposits
|
|
552
|
411
|
128
|
Trade
receivables
|
|
624
|
560
|
174
|
Other receivables and
prepaid expenses
|
|
39
|
46
|
14
|
Deferred expenses –
right of use
|
|
26
|
26
|
8
|
Inventories
|
|
124
|
77
|
24
|
|
|
1,664
|
1,496
|
465
|
|
|
|
|
|
NON CURRENT
ASSETS
|
|
|
|
|
Long-term
deposits
|
|
|
155
|
48
|
Trade
receivables
|
|
250
|
232
|
72
|
Deferred expenses –
right of use
|
|
102
|
118
|
37
|
Lease – right of
use
|
|
582
|
663
|
206
|
Property and
equipment
|
|
1,430
|
1,495
|
465
|
Intangible and other
assets
|
|
538
|
521
|
162
|
Goodwill
|
|
407
|
407
|
127
|
Deferred income tax
asset
|
|
41
|
29
|
9
|
Prepaid
expenses and other assets
|
|
1
|
9
|
3
|
|
|
3,351
|
3,629
|
1,129
|
|
|
|
|
|
TOTAL
ASSETS
|
|
5,015
|
5,125
|
1,594
|
PARTNER
COMMUNICATIONS COMPANY LTD. (An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
|
|
New Israeli
Shekels
|
Convenience
translation into
U.S. Dollars
|
|
|
December
31,
|
|
|
2019
|
2020
|
2020
|
|
|
In
millions
|
CURRENT
LIABILITIES
|
|
|
|
|
Current maturities of
notes payable and borrowings
|
|
367
|
290
|
90
|
Trade
payables
|
|
716
|
666
|
207
|
Payables in respect of
employees
|
|
103
|
58
|
18
|
Other payables (mainly
institutions)
|
|
23
|
29
|
9
|
Income tax
payable
|
|
30
|
27
|
8
|
Lease
liabilities
|
|
131
|
120
|
37
|
Deferred revenues from
HOT mobile
|
|
31
|
31
|
10
|
Other deferred
revenues
|
|
45
|
100
|
31
|
Provisions
|
|
43
|
13
|
4
|
|
|
1,489
|
1,334
|
414
|
NON CURRENT
LIABILITIES
|
|
|
|
|
Notes
payable
|
|
1,275
|
1,219
|
379
|
Borrowings from
banks
|
|
138
|
86
|
27
|
Financial
liability at fair value
|
|
28
|
4
|
1
|
Liability for
employee rights upon retirement, net
|
|
43
|
42
|
13
|
Lease
liabilities
|
|
486
|
582
|
181
|
Deferred
revenues from HOT mobile
|
|
102
|
71
|
22
|
Provisions and
other non-current liabilities
|
|
37
|
64
|
21
|
|
|
2,109
|
2,068
|
644
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
3,598
|
3,402
|
1,058
|
|
|
|
|
|
EQUITY
|
|
|
|
|
Share capital –
ordinary shares of NIS 0.01
par value: authorized – December 31, 2019
and 2020 – 235,000,000 shares;
issued and outstanding
-
|
|
2
|
2
|
1
|
December 31,
2019 – *162,915,990 shares
|
|
|
|
|
December 31,
2020 – *182,826,973 shares
|
|
|
|
|
Capital
surplus
|
|
1,077
|
1,311
|
408
|
Accumulated retained
earnings
|
|
576
|
606
|
188
|
Treasury shares, at
cost December 31, 2019 –
**8,275,837 shares
December 31, 2020 – **7,741,784
shares
|
|
(238)
|
(196)
|
(61)
|
TOTAL
EQUITY
|
|
1,417
|
1,723
|
536
|
TOTAL LIABILITIES
AND EQUITY
|
|
5,015
|
5,125
|
1,594
|
* Net of treasury shares.
** Including restricted shares in an amount of 1,247,583 and
1,008,735 as of December 31, 2019
and December 31, 2020, respectively, held by a trustee under
the Company's Equity Incentive Plan, such shares may become
outstanding upon completion of vesting conditions.
PARTNER
COMMUNICATIONS COMPANY LTD. (An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
Convenience
|
|
|
|
|
|
translation
|
|
|
New Israeli
Shekels
|
into U.S.
dollars
|
|
|
Year ended
December 31,
|
|
|
2018**
|
2019
|
2020
|
2020
|
|
|
In millions
(except earnings per share)
|
Revenues,
net
|
|
3,259
|
3,234
|
3,189
|
992
|
Cost of
revenues
|
|
2,700
|
2,707
|
2,664
|
829
|
Gross
profit
|
|
559
|
527
|
525
|
163
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
293
|
301
|
291
|
90
|
General and
administrative expenses
|
|
148
|
149
|
145
|
45
|
Credit
losses
|
|
30
|
18
|
23
|
7
|
Other income,
net
|
|
28
|
28
|
30
|
9
|
|
|
|
|
|
|
Operating
profit
|
|
116
|
87
|
96
|
30
|
Finance
income
|
|
2
|
7
|
8
|
2
|
Finance
expenses
|
|
55
|
75
|
77
|
24
|
Finance costs,
net
|
|
53
|
68
|
69
|
22
|
|
|
|
|
|
|
Profit before
income tax
|
|
63
|
19
|
27
|
8
|
Income tax
expenses
|
|
7
|
*
|
10
|
3
|
Profit for the
year
|
|
56
|
19
|
17
|
5
|
Attributable
to:
|
|
|
|
|
|
Owners of the
Company
|
|
57
|
19
|
17
|
5
|
Non-controlling
interests
|
|
(1)
|
*
|
|
|
|
|
|
|
|
|
Profit for the
year
|
|
56
|
19
|
17
|
5
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
Basic
|
|
0.34
|
0.12
|
0.09
|
0.03
|
Diluted
|
|
0.34
|
0.12
|
0.09
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Representing an amount of less than 1 million.
** See report 20-F regarding the adoption of IFRS 16 – Leases, from
the beginning of 2019.
PARTNER
COMMUNICATIONS COMPANY LTD. (An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
|
|
|
|
New Israeli
Shekels
|
Convenience
translation
into U.S.
dollars
|
|
|
Year ended
December 31,
|
|
|
2018**
|
2019
|
2020
|
2020
|
|
|
In
millions
|
Profit for the
year
|
|
56
|
19
|
17
|
5
|
Other
comprehensive income, items
|
|
|
|
|
|
that will not
be reclassified to profit or loss
|
|
|
|
|
|
Remeasurements
of post-employment benefit
|
|
|
|
|
|
obligations
|
|
1
|
(2)
|
1
|
*
|
Income taxes relating
to remeasurements of
|
|
|
|
|
|
post-employment benefit
obligations
|
|
*
|
*
|
*
|
*
|
Other
comprehensive income (loss)
|
|
|
|
|
|
for the year,
net of income taxes
|
|
1
|
(2)
|
1
|
*
|
|
|
|
|
|
|
TOTAL
COMPREHENSIVE INCOME
|
|
|
|
|
|
FOR THE
YEAR
|
|
57
|
17
|
18
|
5
|
Total comprehensive
income attributable to:
|
|
|
|
|
|
Owners of the
Company
|
|
58
|
17
|
18
|
5
|
Non-controlling
interests
|
|
(1)
|
*
|
|
|
TOTAL COMPREHENSIVE
INCOME FOR
THE YEAR
|
|
57
|
17
|
18
|
5
|
|
|
|
|
|
|
* Representing an amount of less than 1 million.
** See report 20-F regarding the adoption of IFRS 16 – Leases, from
the beginning of 2019.
PARTNER
COMMUNICATIONS COMPANY LTD. (An Israeli Corporation)
SEGMENT INFORMATION & ADJUSTED EBITDA RECONCILIATION
|
|
|
|
|
|
|
|
|
New Israeli
Shekels
|
|
|
New Israeli
Shekels
|
|
|
Year ended
December 31, 2020
|
|
|
Year ended December
31, 2019
|
|
|
In
millions
|
|
|
In
millions
|
|
|
Cellular segment
|
|
Fixed line
segment
|
|
Elimination
|
|
Consolidated
|
|
|
Cellular
segment
|
|
Fixed line
segment
|
|
Elimination
|
|
Consolidated
|
|
Segment revenue -
Services
|
1,647
|
|
861
|
|
|
|
2,508
|
|
|
1,783
|
|
777
|
|
|
|
2,560
|
|
Inter-segment revenue -
Services
|
16
|
|
132
|
|
(148)
|
|
|
|
|
15
|
|
148
|
|
(163)
|
|
|
|
Segment revenue -
Equipment
|
545
|
|
136
|
|
|
|
681
|
|
|
571
|
|
103
|
|
|
|
674
|
|
Total
revenues
|
2,208
|
|
1,129
|
|
(148)
|
|
3,189
|
|
|
2,369
|
|
1,028
|
|
(163)
|
|
3,234
|
|
Segment cost of
revenues - Services
|
1,272
|
|
856
|
|
|
|
2,128
|
|
|
1,367
|
|
810
|
|
|
|
2,177
|
|
Inter-segment cost
of revenues - Services
|
131
|
|
17
|
|
(148)
|
|
|
|
|
147
|
|
16
|
|
(163)
|
|
|
|
Segment cost of
revenues - Equipment
|
451
|
|
85
|
|
|
|
536
|
|
|
464
|
|
66
|
|
|
|
530
|
|
Cost of
revenues
|
1,854
|
|
958
|
|
(148)
|
|
2,664
|
|
|
1,978
|
|
892
|
|
(163)
|
|
2,707
|
|
Gross
profit
|
354
|
|
171
|
|
|
|
525
|
|
|
391
|
|
136
|
|
|
|
527
|
|
Operating expenses
(3)
|
300
|
|
159
|
|
|
|
459
|
|
|
334
|
|
134
|
|
|
|
468
|
|
Other income,
net
|
19
|
|
11
|
|
|
|
30
|
|
|
20
|
|
8
|
|
|
|
28
|
|
Operating
profit
|
73
|
|
23
|
|
|
|
96
|
|
|
77
|
|
10
|
|
|
|
87
|
|
Adjustments to
presentation of segment
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
–Depreciation and
amortization
|
450
|
|
264
|
|
|
|
|
|
|
542
|
|
209
|
|
|
|
|
|
–Other
(1)
|
10
|
|
2
|
|
|
|
|
|
|
16
|
|
(1)
|
|
|
|
|
|
Segment Adjusted
EBITDA (2)
|
533
|
|
289
|
|
|
|
|
|
|
635
|
|
218
|
|
|
|
|
|
Reconciliation of
segment subtotal Adjusted EBITDA to profit for the
year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segments subtotal
Adjusted EBITDA (2)
|
|
|
|
|
|
|
822
|
|
|
|
|
|
|
|
|
853
|
|
-
Depreciation and amortization
|
|
|
|
|
|
|
(714)
|
|
|
|
|
|
|
|
|
(751)
|
|
- Finance
costs, net
|
|
|
|
|
|
|
(69)
|
|
|
|
|
|
|
|
|
(68)
|
|
- Income tax expenses
|
|
|
|
|
|
|
(10)
|
|
|
|
|
|
|
|
|
*
|
|
- Other
(1)
|
|
|
|
|
|
|
(12)
|
|
|
|
|
|
|
|
|
(15)
|
|
Profit for the
year
|
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
|
19
|
|
* Representing an amount of less than 1 million.
PARTNER
COMMUNICATIONS COMPANY LTD. (An Israeli Corporation)
INTERIM SEGMENT INFORMATION & ADJUSTED EBITDA
RECONCILIATION
|
|
|
|
|
|
|
|
|
New Israeli
Shekels
|
|
|
New Israeli
Shekels
|
|
|
3 months ended
December 31, 2020
|
|
|
3 months ended
December 31, 2019
|
|
|
In millions
(Unaudited)
|
|
|
In millions
(Unaudited)
|
|
|
Cellular segment
|
|
Fixed line
segment
|
|
Elimination
|
|
Consolidated
|
|
|
Cellular segment
|
|
Fixed line segment
|
|
Elimination
|
|
Consolidated
|
|
Segment revenue -
Services
|
412
|
|
220
|
|
|
|
632
|
|
|
435
|
|
201
|
|
|
|
636
|
|
Inter-segment revenue -
Services
|
4
|
|
32
|
|
(36)
|
|
|
|
|
3
|
|
37
|
|
(40)
|
|
|
|
Segment revenue -
Equipment
|
135
|
|
41
|
|
|
|
176
|
|
|
172
|
|
26
|
|
|
|
198
|
|
Total
revenues
|
551
|
|
293
|
|
(36)
|
|
808
|
|
|
610
|
|
264
|
|
(40)
|
|
834
|
|
Segment cost of
revenues - Services
|
312
|
|
231
|
|
|
|
543
|
|
|
323
|
|
209
|
|
|
|
532
|
|
Inter-segment cost
of revenues - Services
|
31
|
|
5
|
|
(36)
|
|
|
|
|
36
|
|
4
|
|
(40)
|
|
|
|
Segment cost of
revenues - Equipment
|
112
|
|
24
|
|
|
|
136
|
|
|
143
|
|
18
|
|
|
|
161
|
|
Cost of
revenues
|
455
|
|
260
|
|
(36)
|
|
679
|
|
|
502
|
|
231
|
|
(40)
|
|
693
|
|
Gross
profit
|
96
|
|
33
|
|
|
|
129
|
|
|
108
|
|
33
|
|
|
|
141
|
|
Operating expenses
(3)
|
73
|
|
45
|
|
|
|
118
|
|
|
81
|
|
35
|
|
|
|
116
|
|
Other income,
net
|
4
|
|
5
|
|
|
|
9
|
|
|
3
|
|
2
|
|
|
|
5
|
|
Operating profit
(loss)
|
27
|
|
(7)
|
|
|
|
20
|
|
|
30
|
|
0
|
|
|
|
30
|
|
Adjustments to
presentation of segment
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
–Depreciation and
amortization
|
108
|
|
72
|
|
|
|
|
|
|
124
|
|
60
|
|
|
|
|
|
–Other
(1)
|
3
|
|
*
|
|
|
|
|
|
|
2
|
|
1
|
|
|
|
|
|
Segment Adjusted
EBITDA (2)
|
138
|
|
65
|
|
|
|
|
|
|
156
|
|
61
|
|
|
|
|
|
Reconciliation of
segment subtotal Adjusted EBITDA to profit for the
period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segments subtotal
Adjusted EBITDA (2)
|
|
|
|
|
|
|
203
|
|
|
|
|
|
|
|
|
217
|
|
-
Depreciation and amortization
|
|
|
|
|
|
|
(180)
|
|
|
|
|
|
|
|
|
(184)
|
|
- Finance
costs, net
|
|
|
|
|
|
|
(13)
|
|
|
|
|
|
|
|
|
(20)
|
|
- Income tax expenses
|
|
|
|
|
|
|
(2)
|
|
|
|
|
|
|
|
|
(3)
|
|
- Other
(1)
|
|
|
|
|
|
|
(3)
|
|
|
|
|
|
|
|
|
(3)
|
|
Profit for the
period
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
7
|
|
* 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.
(3) Operating expenses include selling and marketing expenses,
general and administrative expenses and credit losses.
PARTNER
COMMUNICATIONS COMPANY LTD. (An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
New Israeli
Shekels
|
Convenience
translation
into
U.S. Dollars
|
|
Year ended
December 31,
|
|
2018**
|
2019
|
2020
|
2020
|
|
In
millions
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Cash generated from
operations (Appendix)
|
627
|
838
|
787
|
244
|
Income tax
paid
|
(2)
|
(1)
|
(1)
|
*
|
Net cash provided by
operating activities
|
625
|
837
|
786
|
244
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Acquisition of
property and equipment
|
(343)
|
(462)
|
(409)
|
(127)
|
Acquisition of
intangible and other assets
|
(159)
|
(167)
|
(164)
|
(51)
|
Acquisition of a
business, net of cash acquired
|
|
(3)
|
|
|
Proceeds from
(investment in) deposits, net
|
150
|
(552)
|
(14)
|
(4)
|
Interest
received
|
1
|
1
|
6
|
2
|
Consideration received
from sales of property and equipment
|
3
|
2
|
*
|
*
|
Payment for
acquisition of subsidiary, net of cash acquired
|
(3)
|
|
|
|
Net cash used in
investing activities
|
(351)
|
(1,181)
|
(581)
|
(180)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Lease principal
payments
|
|
(139)
|
(129)
|
(40)
|
Lease interest
payments
|
|
(20)
|
(18)
|
(6)
|
Share issuance, net of
issuance costs
|
|
|
276
|
86
|
Acquisition of
treasury shares
|
(100)
|
|
|
|
Proceeds from issuance
of notes payable, net of issuance costs
|
150
|
562
|
466
|
145
|
Proceeds from issuance
of option warrants exercisable for notes
payables
|
|
37
|
|
|
Interest
paid
|
(69)
|
(37)
|
(49)
|
(15)
|
Repayment of
non-current borrowings
|
(382)
|
(52)
|
(52)
|
(16)
|
Repayment of current
borrowings
|
|
(13)
|
|
|
Repayment of notes
payables
|
(324)
|
(109)
|
(620)
|
(193)
|
Settlement of
contingent consideration
|
|
|
(2)
|
(1)
|
Transactions with
non-controlling interests
|
|
(2)
|
|
|
Net cash provided by
(used in) financing activities
|
(725)
|
227
|
(128)
|
(40)
|
|
|
|
|
|
INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS
|
(451)
|
(117)
|
77
|
24
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING
OF PERIOD
|
867
|
416
|
299
|
93
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
416
|
299
|
376
|
117
|
|
|
|
|
|
* Representing an amount of less than 1 million.
** See report 20-F regarding the adoption of IFRS 16 – Leases, from
the beginning of 2019.
PARTNER
COMMUNICATIONS COMPANY LTD. (An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
Appendix - Cash
generated from operations and supplemental
information
|
|
|
|
|
New Israeli
Shekels
|
Convenience
translation
into
U.S. Dollars
|
|
Year ended
December 31,
|
|
2018**
|
2019
|
2020
|
2020
|
|
In
millions
|
|
|
|
|
|
Cash generated from
operations:
|
|
|
|
|
Profit for the
year
|
56
|
19
|
17
|
5
|
|
|
|
|
|
Adjustments for:
|
|
|
|
|
Depreciation and amortization
|
545
|
723
|
683
|
212
|
Amortization of deferred expenses - Right of use
|
47
|
28
|
31
|
10
|
Employee share based compensation expenses
|
15
|
17
|
12
|
4
|
Liability for employee rights upon retirement, net
|
1
|
1
|
(1)
|
*
|
Finance costs,
net
|
(7)
|
5
|
(2)
|
(1)
|
Lease interest
payments
|
|
20
|
18
|
6
|
Interest
paid
|
69
|
37
|
49
|
15
|
Interest
received
|
(1)
|
(1)
|
(6)
|
(2)
|
Deferred income taxes
|
16
|
4
|
12
|
4
|
Income tax paid
|
2
|
1
|
1
|
*
|
Capital loss from
property and equipment
|
*
|
(2)
|
*
|
*
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Decrease (increase) in accounts receivable:
|
|
|
|
|
Trade
|
124
|
42
|
82
|
26
|
Other
|
16
|
(1)
|
(6)
|
(2)
|
Increase (decrease) in accounts payable and accruals:
|
|
|
|
|
Trade
|
(69)
|
63
|
(57)
|
(18)
|
Other payables
|
(18)
|
12
|
(37)
|
(12)
|
Provisions
|
(11)
|
(21)
|
(30)
|
(9)
|
Deferred
revenues from HOT mobile
|
(31)
|
(31)
|
(31)
|
(10)
|
Other deferred revenues
|
*
|
4
|
55
|
17
|
Increase in deferred expenses -
Right of use
|
(107)
|
(51)
|
(47)
|
(15)
|
Current
income tax
|
(15)
|
(5)
|
(3)
|
(1)
|
Decrease
(increase) in inventories
|
(5)
|
(26)
|
47
|
15
|
Cash generated from
operations
|
627
|
838
|
787
|
244
|
|
|
|
|
|
* Representing an amount of less than 1 million.
** See report 20-F regarding the adoption of IFRS 16 – Leases, from
the beginning of 2019.
At December 31, 2018, 2019 and
2020, trade and other payables, net include NIS 157 million, NIS 115
million and NIS 139 million
(US$ 43 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. Cost of inventory used as fixed assets during 2019 and
2020 were NIS 24 million and
NIS 8 million (US$ 2 million), respectively.
Reconciliation of Non-GAAP Measures:
Adjusted Free
Cash Flow
|
New Israeli
Shekels
|
Convenience
translation into
U.S. Dollars
|
|
12 months
ended
December
31,
|
3 months
ended
December
31,
|
12 months
ended
December 31,
|
3 months
ended
December 31,
|
|
2019
|
2020
|
2019
|
2020
|
2020
|
2020
|
|
(Audited)
|
(Audited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
(Unaudited)
|
|
In
millions
|
Net cash provided by
operating activities
|
837
|
786
|
178
|
182
|
244
|
57
|
Net cash used in
investing activities
|
(1,181)
|
(581)
|
(523)
|
(61)
|
(180)
|
(19)
|
Investment in
(proceeds from) deposits, net
|
552
|
14
|
396
|
(92)
|
4
|
(29)
|
Lease principal
payments
|
(139)
|
(129)
|
(30)
|
(27)
|
(40)
|
(8)
|
Lease interest
payments
|
(20)
|
(18)
|
(5)
|
(5)
|
(6)
|
(2)
|
Adjusted Free Cash
Flow
|
49
|
72
|
16
|
(3)
|
22
|
(1)
|
Interest
paid
|
(37)
|
(49)
|
(16)
|
(7)
|
(15)
|
(2)
|
Adjusted Free Cash
Flow After Interest
|
12
|
23
|
0
|
(10)
|
7
|
(3)
|
Total Operating
Expenses (OPEX)
|
New Israeli
Shekels
|
Convenience
translation into
U.S. Dollars
|
|
12 months
ended
December
31,
|
3 months
ended
December
31,
|
12 months
ended
December 31,
|
3
months ended
December 31,
|
|
2019
|
2020
|
2019
|
2020
|
2020
|
2020
|
|
(Audited)
|
(Audited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
(Unaudited)
|
|
In
millions
|
Cost of revenues -
Services
|
2,177
|
2,128
|
532
|
543
|
663
|
168
|
Selling and marketing
expenses
|
301
|
291
|
73
|
79
|
90
|
25
|
General and
administrative expenses
|
149
|
145
|
40
|
35
|
45
|
11
|
Credit
losses
|
18
|
23
|
3
|
4
|
7
|
1
|
Depreciation and
amortization
|
(751)
|
(714)
|
(184)
|
(180)
|
(222)
|
(56)
|
Other (1)
|
(9)
|
(2)
|
3
|
(1)
|
(1)
|
*
|
OPEX
|
1,885
|
1,871
|
467
|
480
|
582
|
149
|
|
|
|
|
|
|
|
* Representing an amount of less than 1
million.
(1) Mainly amortization of employee share based
compensation.
Key Financial and Operating Indicators
(unaudited) ***
NIS M unless
otherwise stated
|
Q4'
18
|
Q1'
19
|
Q2'
19
|
Q3'
19
|
Q4'
19
|
Q1'
20
|
Q2'
20
|
Q3'
20
|
Q4'
20
|
|
2019
|
2020
|
Cellular Segment
Service Revenues
|
447
|
441
|
453
|
466
|
438
|
423
|
409
|
415
|
416
|
|
1,798
|
1,663
|
Cellular Segment
Equipment Revenues
|
165
|
142
|
115
|
142
|
172
|
146
|
130
|
134
|
135
|
|
571
|
545
|
Fixed-Line Segment
Service Revenues
|
220
|
224
|
230
|
233
|
238
|
245
|
244
|
252
|
252
|
|
925
|
993
|
Fixed-Line Segment
Equipment Revenues
|
24
|
28
|
24
|
25
|
26
|
32
|
28
|
35
|
41
|
|
103
|
136
|
Reconciliation for
consolidation
|
(42)
|
(41)
|
(41)
|
(41)
|
(40)
|
(39)
|
(37)
|
(36)
|
(36)
|
|
(163)
|
(148)
|
Total
Revenues
|
814
|
794
|
781
|
825
|
834
|
807
|
774
|
800
|
808
|
|
3,234
|
3,189
|
Gross Profit from
Equipment Sales
|
42
|
39
|
35
|
33
|
37
|
37
|
30
|
38
|
40
|
|
144
|
145
|
Operating
Profit*
|
14
|
9
|
22
|
26
|
30
|
36
|
20
|
20
|
20
|
|
87
|
96
|
Cellular Segment
Adjusted EBITDA*
|
119
|
150
|
159
|
170
|
156
|
132
|
129
|
134
|
138
|
|
635
|
533
|
Fixed-Line Segment
Adjusted EBITDA*
|
53
|
47
|
55
|
55
|
61
|
83
|
71
|
70
|
65
|
|
218
|
289
|
Total Adjusted
EBITDA*
|
172
|
197
|
214
|
225
|
217
|
215
|
200
|
204
|
203
|
|
853
|
822
|
Adjusted EBITDA
Margin (%)*
|
21%
|
25%
|
27%
|
27%
|
26%
|
27%
|
26%
|
26%
|
25%
|
|
26%
|
26%
|
OPEX*
|
502
|
472
|
472
|
474
|
467
|
460
|
456
|
475
|
480
|
|
1,885
|
1,871
|
Finance costs,
net*
|
12
|
14
|
16
|
18
|
20
|
19
|
13
|
24
|
13
|
|
68
|
69
|
Profit
(Loss)*
|
19
|
2
|
3
|
7
|
7
|
10
|
7
|
(5)
|
5
|
|
19
|
17
|
Capital Expenditures
(cash)
|
143
|
185
|
143
|
174
|
127
|
151
|
119
|
147
|
156
|
|
629
|
573
|
Capital Expenditures
(additions)
|
177
|
157
|
142
|
150
|
129
|
129
|
121
|
179
|
166
|
|
578
|
595
|
Adjusted Free Cash
Flow
|
(22)
|
(11)
|
31
|
13
|
16
|
10
|
44
|
21
|
(3)
|
|
49
|
72
|
Adjusted Free Cash
Flow (after interest)
|
(37)
|
(15)
|
15
|
12
|
0
|
8
|
13
|
12
|
(10)
|
|
12
|
23
|
Net Debt
|
950
|
977
|
965
|
956
|
957
|
673
|
658
|
646
|
657
|
|
957
|
657
|
Cellular Subscriber
Base (Thousands)
|
2,646
|
2,620
|
2,616
|
2,651
|
2,657
|
2,676
|
2,708
|
2,762
|
2,836
|
|
2,657
|
2,836
|
Post-Paid Subscriber
Base (Thousands)
|
2,361
|
2,340
|
2,337
|
2,366
|
2,366
|
2,380
|
2,404
|
2,437
|
2,495
|
|
2,366
|
2,495
|
Pre-Paid Subscriber
Base (Thousands)
|
285
|
280
|
279
|
285
|
291
|
296
|
304
|
325
|
341
|
|
291
|
341
|
Cellular ARPU
(NIS)
|
57
|
56
|
58
|
59
|
55
|
53
|
51
|
51
|
49
|
|
57
|
51
|
Cellular Churn Rate
(%)
|
8.5%
|
8.5%
|
7.9%
|
7.7%
|
7.2%
|
7.5%
|
7.5%
|
7.3%
|
7.2%
|
|
31%
|
30%
|
Infrastructure-Based
Internet Subscribers (Thousands)
|
|
|
|
|
268
|
281
|
295
|
311
|
329
|
|
268
|
329
|
Fiber-Optic
subscribers (Thousands)
|
|
|
|
|
76
|
87
|
101
|
120
|
139
|
|
76
|
139
|
Homes connected to
fiber-optic infrastructure
(Thousands)
|
|
|
|
|
324
|
361
|
396
|
432
|
465
|
|
324
|
465
|
TV Subscriber Base
(Thousands)
|
122
|
141
|
160
|
176
|
188
|
200
|
215
|
224
|
232
|
|
188
|
232
|
Number of Employees
(FTE)**
|
2,782
|
2,897
|
2,895
|
2,923
|
2,834
|
1,867
|
2,745
|
2,731
|
2,655
|
|
2,834
|
2,655
|
Comments:
* Figures from 2019 include impact of adoption
of IFRS 16 - Leases (see also report 20-F).
** From 2019, the number of employees (FTE) also includes the
number of FTE of PHI on a proportional basis of Partner's share in
the subsidiary (50%). Excluding employees on unpaid leave in
2020.
***See footnote 2 regarding use of non-GAAP measures.
Disclosure for notes holders as of December 31, 2020
Information regarding the notes series issued by the Company, in
million NIS
Series
|
Original
issuance
date
|
Principal on
the date of
issuance
|
As of
31.12.2020
|
Annual interest
rate
|
Principal
repayment
dates
|
Interest
repayment dates
|
Interest
linkage
|
Trustee contact
details
|
Principal
book value
|
Linked principal
book value
|
Interest
accumulated
in books
|
Market
value
|
From
|
To
|
|
|
|
D
|
25.04.10
04.05.11*
|
400
146
|
109
|
109
|
**
|
110
|
1.252%
(MAKAM+1.2%)
|
30.12.17
|
30.12.21
|
30.03, 30.06, 30.09,
30.12
|
Variable
interest
MAKAM (4)
|
Hermetic Trust (1975)
Ltd.
Merav Offer. 113 Hayarkon
St., Tel Aviv. Tel: 03-5544553.
|
F
(2) (3)
|
20.07.17
12.12.17*
04.12.18*
01.12.19*
|
255
389
150
226.75
|
512
|
512
|
**
|
524
|
2.16%
|
25.06.20
|
25.06.24
|
25.06,
25.12
|
Not Linked
|
Hermetic Trust (1975)
Ltd.
Merav Offer. 113
Hayarkon
St., Tel Aviv. Tel: 03-5544553.
|
G
(1) (2)
|
06.01.19
01.07.19*
28.11.19*
27.02.20*
31.05.20*
01.07.20*
02.07.20*
26.11.20*
|
225
38.5
86.5
15.1
84.8
12.2
300
62.2
|
824
|
824
|
17
|
939
|
4%
|
25.06.22
|
25.06.27
|
25.06
|
Not Linked
|
Hermetic Trust (1975)
Ltd.
Merav Offer. 113
Hayarkon
St., Tel Aviv. Tel: 03-5544553.
|
(1) In April 2019, the
Company issued in a private placement 2 series of untradeable
option warrants that are exercisable for the Company's Series G
debentures. The exercise period of the first series is between
July 1, 2019 and May 31, 2020 and of the second series is between
July 1, 2020 and May 31, 2021. The Series G debentures that will
be allotted upon the exercise of an option warrant will be
identical in all their rights to the Company's Series G debentures
immediately upon their allotment, and will be entitled to any
payment of interest or other benefit, the effective date of which
is due after the allotment date. The debentures that will be
allotted as a result of the exercise of option warrants will be
registered on the TASE. The total amount received by the Company on
the allotment date of the option warrants is NIS 37 million. For additional details see the
Company's press release dated April 17,
2019. Following exercise of option warrants from the first
series, the Company issued Series G Notes in a total principal
amount of NIS 225 million. Following
exercise of option warrants from the second series in July 2020 and November
2020, the Company issued Series G Notes in a principal
amount of NIS 12.2 million and
NIS 62.2 million, respectively. As of
today, the total future considerations expected to the Company in
respect of the allotment of the option warrants from the second
series (after the exercises of option warrants as described above)
and in respect of their full exercise (and assuming that there will
be no change to the exercise price) is approximately NIS 23 million.
In July 2020, the Company issued in a
private placement additional Series G Notes in a principal amount
of NIS 300 million, under the same
conditions of the original series.
(2) Regarding Series F and G 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 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
December 31, 2020, the ratio of Net
Debt to Adjusted EBITDA was 0.8. Additional stipulations regarding
Series F and G Notes mainly include: shareholders' equity shall not
decrease below NIS 400 million and NIS
600 million, respectively; 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. In any case, the total maximum additional
interest for Series F and G, shall not exceed 1.25% or 1%,
respectively. For more information see the Company's Annual Report
on Form 20-F for the year ended December 31,
2020.
In the reporting period, the Company was in compliance with all
financial covenants and obligations and no cause for early
repayment occurred.
(3) In July 2020, the Company
executed a partial early redemption of Series F Notes in a total
principal amount of NIS 305 million.
The total amount paid was NIS 313
million.
(4) '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.
** Representing an amount of less than NIS 1 million.
Disclosure for Notes holders as of December 31, 2020 (cont.)
Notes Rating Details*
Series
|
Rating
Company
|
Rating as of
31.12.2020 and
25.03.2021 (1)
|
Rating assigned
upon issuance of
the Series
|
Recent date of
rating
as of 31.12.2020 and
25.03.2021
|
Additional ratings
between the original issuance date and the recent date of rating
(2)
|
Date
|
Rating
|
D
|
S&P
Maalot
|
ilA+
|
ilAA-
|
11/2020
|
07/2010, 09/2010,
10/2010, 09/2012, 12/2012,
06/2013, 07/2014,
07/2015, 07/2016, 07/2017,
08/2018, 11/2018,
12/2018, 01/2019, 04/2019,
08/2019, 02/2020,
05/2020, 06/2020, 07/2020,
08/2020,
11/2020
|
ilAA-, ilAA-, ilAA-,
ilAA-, ilAA-,
ilAA-, ilAA-, ilA+,
ilA+, ilA+,
ilA+, ilA+, ilA+,
ilA+, ilA+,
ilA+, ilA+, ilA+,
ilA+, ilA+,
ilA+, ilA+
|
F
|
S&P
Maalot
|
ilA+
|
ilA+
|
11/2020
|
07/2017, 09/2017,
12/2017, 01/2018, 08/2018,
11/2018, 12/2018,
01/2019, 04/2019, 08/2019,
02/2020, 05/2020,
06/2020, 07/2020, 08/2020,
11/2020
|
ilA+, ilA+, ilA+,
ilA+, ilA+,
ilA+, ilA+,
ilA+, ilA+, ilA+,
ilA+, ilA+, ilA+,
ilA+, ilA+,
ilA+
|
G (3)
|
S&P
Maalot
|
ilA+
|
ilA+
|
11/2020
|
12/2018, 01/2019,
04/2019, 08/2019, 02/2020,
05/2020,
06/2020, 07/2020, 08/2020, 11/2020
|
ilA+, ilA+, ilA+,
ilA+, ilA+,
ilA+, ilA+, ilA+,
ilA+, ilA+
|
(1) In August 2020, S&P Maalot
reaffirmed the Company's ilA+ credit rating and updated the
Company's rating outlook from "negative" to "stable".
(2) For details regarding the rating of the notes see the
S&P Maalot reports dated August 10,
2020.
(3) In January 2019, the Company
issued Series G Notes in a principal amount of NIS 225 million. In July
2019, November 2019,
February 2020, May 2020, July 2020
and November 2020 the Company issued
additional Series G Notes in a principal amount of NIS 38.5 million, NIS 86.5
million, NIS 15.1 million,
NIS 84.8 million, NIS 12.2 million and NIS
62.2 million, respectively. In addition, in July 2020, the Company issued in a private
placement additional Series G Notes in a principal amount of
NIS 300 million.
* 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 December 31,
2020
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
|
-
|
237,130
|
-
|
-
|
-
|
43,984
|
Second
year
|
-
|
210,334
|
-
|
-
|
-
|
39,880
|
Third year
|
-
|
210,334
|
-
|
-
|
-
|
33,820
|
Fourth
year
|
-
|
210,334
|
-
|
-
|
-
|
27,832
|
Fifth year and
on
|
-
|
577,027
|
-
|
-
|
-
|
56,054
|
Total
|
-
|
1,445,159
|
-
|
-
|
-
|
201,570
|
b. Private notes and other non-bank credit, excluding such
notes held by the Company's parent company, by a controlling
shareholder, by companies controlled by them, or by companies
controlled by the Company, based on the Company's "Solo" financial
data – None.
c. Credit from banks in Israel based on the Company's "Solo" financial
data (in thousand NIS).
|
Principal
payments
|
Gross interest
payments (without
deduction of tax)
|
|
ILS linked to
CPI
|
ILS not linked to
CPI
|
Euro
|
Dollar
|
Other
|
First year
|
-
|
52,132
|
-
|
-
|
-
|
2,915
|
Second
year
|
-
|
52,132
|
-
|
-
|
-
|
1,643
|
Third year
|
-
|
22,720
|
-
|
-
|
-
|
639
|
Fourth
year
|
-
|
11,400
|
-
|
-
|
-
|
107
|
Fifth year and
on
|
-
|
-
|
-
|
-
|
-
|
-
|
Total
|
-
|
138,384
|
-
|
-
|
-
|
5,304
|
Summary of Financial Undertakings (according to repayment
dates) as of December 31, 2020
(cont.)
d. Credit from banks abroad based on the Company's "Solo"
financial data – None.
e. Total of sections a - d above, total credit from banks,
non-bank credit and notes based on the Company's "Solo" financial
data (in thousand NIS).
|
Principal
payments
|
Gross interest
payments (without
deduction of tax)
|
|
ILS linked
to CPI
|
ILS not linked
to CPI
|
Euro
|
Dollar
|
Other
|
First year
|
-
|
289,262
|
-
|
-
|
-
|
46,899
|
Second
year
|
-
|
262,466
|
-
|
-
|
-
|
41,523
|
Third year
|
-
|
233,054
|
-
|
-
|
-
|
34,459
|
Fourth
year
|
-
|
221,734
|
-
|
-
|
-
|
27,939
|
Fifth year and
on
|
-
|
577,027
|
-
|
-
|
-
|
56,054
|
Total
|
-
|
1,583,543
|
-
|
-
|
-
|
206,874
|
f. Off-balance sheet Credit exposure based on the
Company's "Solo" financial data (in thousand NIS) – 50,000
(Guarantees on behalf of a joint arrangement, 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.
In addition to the total credit above, Company's financial debt
includes financial liability at fair value in respect of option
warrants issued in May 2019. At
December 31, 2020, this financial
liability totaled to an amount of NIS 4
million.
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content:http://www.prnewswire.com/news-releases/partner-communications-reports-fourth-quarter-and-annual-2020-results1-301255749.html
SOURCE Partner Communications Company Ltd.