• |
Total Revenues: NIS 837 million (US$ 259 million), an increase of 5%
|
• |
Service Revenues: NIS 672 million (US$ 208 million), an increase of 6%
|
• |
Equipment Revenues: NIS 165 million (US$ 51 million), a decrease of 2%
|
• |
Total Operating Expenses (OPEX)2: NIS 467 million (US$ 145 million), a decrease of 2%
|
• |
Adjusted EBITDA: NIS 250 million (US$ 77 million), an increase of 23%
|
• |
Profit for the Period: NIS 24 million (US$ 7 million), an increase of NIS 29 million
|
• |
Adjusted Free Cash Flow (before interest)2: NIS 9 million (US$ 3 million), a decrease of NIS 12 million
|
• |
Cellular ARPU: NIS 48 (US$ 15), a decrease of 6%
|
• |
Cellular Subscriber Base: approximately 3.02 million at quarter-end, an increase of 9%
|
• |
Fiber-Optic Subscriber Base: 192 thousand subscribers at quarter-end, an increase of 72 thousand subscribers since Q3 2020, and an increase
of 19 thousand in the quarter
|
• |
Homes Connected (HC) to Partner's Fiber-Optic Infrastructure: 624 thousand at quarter-end, an increase of 192 thousand since Q3 2020, and an increase of 53 thousand in the quarter
|
• |
Infrastructure-Based Internet Subscriber Base: 365 thousand subscribers at quarter-end, an increase of 54 thousand subscribers since Q3
2020, and an increase of 11 thousand in the quarter
|
• |
TV Subscriber Base: 226 thousand subscribers at quarter-end, an increase of 2 thousand subscribers since Q3 2020, and an increase of 3
thousand in the quarter3.
|
NIS Million (except EPS)
|
Q3’20
|
Q3’21
|
Comments
|
Service Revenues
|
631
|
672
|
The increase reflected growth in fixed-line and cellular services from subscriber growth in cellular and fiber-optics, with an increase in cellular roaming services
|
Equipment Revenues
|
169
|
165
|
The decrease reflected lower revenues in the fixed-line segment that was partially offset by a higher volume of equipment sales in the cellular segment
|
Total Revenues
|
800
|
837
|
|
Gross profit from equipment sales
|
38
|
37
|
|
OPEX
|
475
|
467
|
The decrease mainly reflects decreases in interconnect expenses and in wholesale internet expenses, which were partially offset by an increase in payroll and related expenses, largely
reflecting the positive impact of COVID-19 on payroll expenses in Q3 2020
|
Operating profit
|
20
|
49
|
|
Adjusted EBITDA
|
204
|
250
|
|
Adjusted EBITDA as a percentage of total revenues
|
26%
|
30%
|
|
Profit (Loss) for the period
|
(5)
|
24
|
|
Earnings (Losses) per share (basic, NIS)
|
(0.03)
|
0.13
|
|
Capital Expenditures (cash)
|
147
|
172
|
|
Adjusted free cash flow (before interest payments)
|
21
|
9
|
|
Net Debt
|
646
|
662
|
Q3'20
|
Q2’21
|
Q3’21
|
Change QoQ
|
|
Cellular Subscribers (end of period, thousands)
|
2,762
|
2,970
|
3,019
|
Post-Paid: Increase of 49 thousand from Q2’21 (including 16 thousand voice packages from Ministry of Education)
Pre-Paid: Unchanged from Q2'21
|
Monthly Average Revenue per Cellular User (ARPU) (NIS)
|
51
|
48
|
48
|
|
Quarterly Cellular Churn Rate (%)
|
7.3%
|
7.2%
|
6.4%
|
|
Fiber-Optic Subscribers (end of period, thousands)
|
120
|
173
|
192
|
Increase of 19 thousand subscribers
|
Homes Connected to the Fiber-Optic Infrastructure (HC), (end of period, thousands)
|
432
|
571
|
624
|
Increase of 53 thousand households
|
Infrastructure-Based Internet Subscribers (end of period, thousands)
|
311
|
354
|
365
|
Increase of 11 thousand subscribers
|
TV Subscribers (end of period, thousands)
|
224
|
223
|
226
|
Increase of 3 thousand subscribers.
|
NIS Million
|
Cellular Segment
|
Fixed-Line Segment
|
Elimination
|
Consolidated
|
|||||||
Q3'20
|
Q3'21
|
Change %
|
Q3'20
|
Q3'21
|
Change %
|
Q3'20
|
Q3'21
|
Q3'20
|
Q3'21
|
Change %
|
|
Total Revenues
|
549
|
571
|
+4%
|
287
|
299
|
+4%
|
(36)
|
(33)
|
800
|
837
|
+5%
|
Service Revenues
|
415
|
435
|
+5%
|
252
|
270
|
+7%
|
(36)
|
(33)
|
631
|
672
|
+6%
|
Equipment Revenues
|
134
|
136
|
+1%
|
35
|
29
|
-17%
|
-
|
-
|
169
|
165
|
-2%
|
Operating Profit (Loss)
|
20
|
66
|
+230%
|
0
|
(17)
|
-
|
-
|
20
|
49
|
+145%
|
|
Adjusted EBITDA
|
134
|
172
|
+28%
|
70
|
78
|
+11%
|
-
|
-
|
204
|
250
|
+23%
|
• |
The Company's fiber-optic subscriber base was 192 thousand subscribers, an increase, net, of 19 thousand subscribers during the third quarter of 2021.
|
• |
The Company's infrastructure-based internet subscriber base (fiber subscribers and wholesale market subscribers) was 365 thousand subscribers, an increase, net, of 11 thousand subscribers during the third quarter of 2021.
|
• |
Households in buildings connected to our fiber-optic infrastructure (HC) totaled 624 thousand, an increase of 53 thousand during the third quarter of 2021.
|
• |
The Company's TV subscriber base totaled 226 thousand subscribers, an increase, net, of 3 thousand subscribers during the third quarter of 2021, largely reflecting the impact of the strategic business change in TV services and tariff
updates during the quarter.
|
• |
Under certain conditions for communication devices that do not exceed 6 meters or 2/3 of the height of the building on which it is placed (the lower of the two);
|
• |
Replacement of broadcasting devices; and
|
• |
Under certain conditions for the addition of an antenna to an existing device with a permit.
|
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
deduct
Depreciation and amortization expenses,
Other expenses (mainly amortization of employee share based compensation)
|
Sum of:
Cost of service revenues,
Selling and marketing expenses,
General and administrative expenses
|
Net Debt
|
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.
|
Mr. Tamir Amar
Deputy CEO & Chief Financial Officer
Tel: +972-54-781-4951
|
Mr. Amir Adar
Head of Investor Relations and Corporate Projects
Tel: +972-54-781-5051
E-mail: investors@partner.co.il
|
New Israeli Shekels |
Convenience
translation
into
U.S. Dollars
|
|||||||||||
December 31,
|
September 30,
|
September 30,
|
||||||||||
2020
|
2021
|
2021
|
||||||||||
(Audited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
In millions
|
||||||||||||
CURRENT ASSETS
|
||||||||||||
Cash and cash equivalents
|
376
|
270
|
84
|
|||||||||
Short-term deposits
|
411
|
521
|
161
|
|||||||||
Trade receivables
|
560
|
568
|
176
|
|||||||||
Other receivables and prepaid expenses
|
46
|
38
|
12
|
|||||||||
Deferred expenses – right of use
|
26
|
27
|
8
|
|||||||||
Inventories
|
77
|
91
|
28
|
|||||||||
1,496
|
1,515
|
469
|
||||||||||
NON CURRENT ASSETS
|
||||||||||||
Long-term deposits
|
155
|
|||||||||||
Trade receivables
|
232
|
242
|
75
|
|||||||||
Deferred expenses – right of use
|
118
|
136
|
42
|
|||||||||
Lease – right of use
|
663
|
691
|
214
|
|||||||||
Property and equipment
|
1,495
|
1,533
|
475
|
|||||||||
Intangible and other assets
|
521
|
484
|
150
|
|||||||||
Goodwill
|
407
|
407
|
126
|
|||||||||
Deferred income tax asset
|
29
|
17
|
5
|
|||||||||
Other non-current receivables
|
9
|
36
|
11
|
|||||||||
3,629
|
3,546
|
1,098
|
||||||||||
TOTAL ASSETS
|
5,125
|
5,061
|
1,567
|
New Israeli Shekels
|
Convenience
translation
into
U.S. Dollars
|
|||||||||||
December 31,
|
September 30,
|
September 30,
|
||||||||||
2020
|
2021
|
2021
|
||||||||||
(Audited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
In millions
|
||||||||||||
CURRENT LIABILITIES
|
||||||||||||
Current maturities of notes payable and borrowings
|
290
|
377
|
117
|
|||||||||
Trade payables
|
666
|
653
|
202
|
|||||||||
Payables in respect of employees
|
58
|
79
|
24
|
|||||||||
Other payables (mainly institutions)
|
29
|
59
|
18
|
|||||||||
Income tax payable
|
27
|
33
|
10
|
|||||||||
Current maturities of lease liabilities
|
120
|
128
|
40
|
|||||||||
Deferred revenues from HOT mobile
|
31
|
32
|
10
|
|||||||||
Other deferred revenues
|
100
|
114
|
35
|
|||||||||
Provisions
|
13
|
18
|
6
|
|||||||||
1,334
|
1,493
|
462
|
||||||||||
NON CURRENT LIABILITIES
|
||||||||||||
Notes payable
|
1,219
|
1,029
|
319
|
|||||||||
Borrowings from banks
|
86
|
47
|
15
|
|||||||||
Financial liability at fair value
|
4
|
|||||||||||
Liability for employee rights upon retirement, net
|
42
|
45
|
14
|
|||||||||
Lease liabilities
|
582
|
596
|
185
|
|||||||||
Deferred revenues from HOT mobile
|
71
|
47
|
14
|
|||||||||
Provisions and other non-current liabilities
|
64
|
35
|
10
|
|||||||||
2,068
|
1,799
|
557
|
||||||||||
TOTAL LIABILITIES
|
3,402
|
3,292
|
1,019
|
|||||||||
EQUITY
|
||||||||||||
Share capital - ordinary shares of NIS 0.01
par value: authorized - December 31, 2020
and September 30, 2021 - 235,000,000 shares;
issued and outstanding -
|
2
|
2
|
1
|
|||||||||
December 31, 2020 – *182,826,973 shares
|
||||||||||||
September 30, 2021 – -*183,234,366 shares
|
||||||||||||
Capital surplus
|
1,311
|
1,279
|
396
|
|||||||||
Accumulated retained earnings
|
606
|
652
|
202
|
|||||||||
Treasury shares, at cost
December 31, 2020 – **7,741,784 shares
September 30, 2021 – *-*7,337,759 shares
|
(196
|
)
|
(164
|
)
|
(51
|
)
|
||||||
TOTAL EQUITY
|
1,723
|
1,769
|
548
|
|||||||||
TOTAL LIABILITIES AND EQUITY
|
5,125
|
5,061
|
1,567
|
*
|
Net of treasury shares
|
**
|
Including restricted shares in amount of 1,008,735 and 1,082,150 as of December 31, 2020 and September 30, 2021, respectively, held by a trustee under the Company's Equity Incentive Plan,
such shares may become outstanding upon completion of vesting conditions.
|
New Israeli shekels
|
Convenience translation into U.S. dollars
|
|||||||||||||||||||||||
9 months period ended
September 30,
|
3 months period ended
September 30,
|
9 months period ended
September 30,
|
3 months period ended
September 30,
|
|||||||||||||||||||||
2020
|
2021
|
2020
|
2021
|
2021
|
2021
|
|||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||
In millions (except per share data)
|
||||||||||||||||||||||||
Revenues, net
|
2,381
|
2,510
|
800
|
837
|
777
|
259
|
||||||||||||||||||
Cost of revenues
|
1,985
|
2,054
|
677
|
667
|
636
|
206
|
||||||||||||||||||
Gross profit
|
396
|
456
|
123
|
170
|
141
|
53
|
||||||||||||||||||
Selling and marketing expenses
|
212
|
238
|
72
|
81
|
74
|
25
|
||||||||||||||||||
General and administrative expenses
|
129
|
132
|
39
|
46
|
41
|
15
|
||||||||||||||||||
Other income, net
|
21
|
21
|
8
|
6
|
7
|
2
|
||||||||||||||||||
Operating profit
|
76
|
107
|
20
|
49
|
33
|
15
|
||||||||||||||||||
Finance income
|
4
|
5
|
1
|
2
|
2
|
1
|
||||||||||||||||||
Finance expenses
|
60
|
55
|
25
|
17
|
17
|
6
|
||||||||||||||||||
Finance costs, net
|
56
|
50
|
24
|
15
|
15
|
5
|
||||||||||||||||||
Profit (loss) before income tax
|
20
|
57
|
(4
|
)
|
34
|
18
|
10
|
|||||||||||||||||
Income tax expenses
|
8
|
19
|
1
|
10
|
6
|
3
|
||||||||||||||||||
Profit (loss) for the period
|
12
|
38
|
(5
|
)
|
24
|
12
|
7
|
|||||||||||||||||
Earnings (losses) per share
|
||||||||||||||||||||||||
Basic
|
0.06
|
0.21
|
(0.03
|
)
|
0.13
|
0.06
|
0.04
|
|||||||||||||||||
Diluted
|
0.06
|
0.21
|
(0.03
|
)
|
0.13
|
0.06
|
0.04
|
|||||||||||||||||
Weighted average number of shares outstanding (in thousands)
|
||||||||||||||||||||||||
Basic
|
182,183
|
183,145
|
182,688
|
183,212
|
183,145
|
183,212
|
||||||||||||||||||
Diluted
|
182,839
|
183,739
|
182,688
|
183,770
|
183,739
|
183,770
|
New Israeli shekels
|
Convenience translation into U.S. dollars
|
|||||||||||||||||||||||
9 months period ended
September 30,
|
3 months period ended
September 30,
|
9 months period ended
September 30,
|
3 months period ended
September 30,
|
|||||||||||||||||||||
2020
|
2021
|
2020
|
2021
|
2021
|
2021
|
|||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||
In millions
|
||||||||||||||||||||||||
Profit (loss) for the period
|
12
|
38
|
(5
|
)
|
24
|
12
|
7
|
|||||||||||||||||
Other comprehensive income for
the period, net of income tax
|
1
|
|||||||||||||||||||||||
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD
|
13
|
38
|
(5
|
)
|
24
|
12
|
7
|
New Israeli Shekels
|
New Israeli Shekels
|
|||||||||||||||||||||||||||||||
9 months period ended September 30, 2021
|
9 months period ended September 30, 2020
|
|||||||||||||||||||||||||||||||
In millions (Unaudited)
|
In millions (Unaudited)
|
|||||||||||||||||||||||||||||||
|
Cellular
segment
|
Fixed line
segment
|
Elimination
|
Consolidated
|
Cellular
segment
|
Fixed line
segment
|
Elimination
|
Consolidated
|
||||||||||||||||||||||||
Segment revenue - Services
|
1,258
|
702
|
1,960
|
1,235
|
641
|
1,876
|
||||||||||||||||||||||||||
Inter-segment revenue - Services
|
10
|
90
|
(100
|
)
|
12
|
100
|
(112
|
)
|
||||||||||||||||||||||||
Segment revenue - Equipment
|
453
|
97
|
550
|
410
|
95
|
505
|
||||||||||||||||||||||||||
Total revenues
|
1,721
|
889
|
(100
|
)
|
2,510
|
1,657
|
836
|
(112
|
)
|
2,381
|
||||||||||||||||||||||
Segment cost of revenues - Services
|
906
|
716
|
1,622
|
960
|
625
|
1,585
|
||||||||||||||||||||||||||
Inter-segment cost of revenues - Services
|
90
|
10
|
(100
|
)
|
100
|
12
|
(112
|
)
|
||||||||||||||||||||||||
Segment cost of revenues - Equipment
|
374
|
58
|
432
|
339
|
61
|
400
|
||||||||||||||||||||||||||
Cost of revenues
|
1,370
|
784
|
(100
|
)
|
2,054
|
1,399
|
698
|
(112
|
)
|
1,985
|
||||||||||||||||||||||
Gross profit
|
351
|
105
|
456
|
258
|
138
|
396
|
||||||||||||||||||||||||||
Operating expenses (3)
|
223
|
147
|
370
|
227
|
114
|
341
|
||||||||||||||||||||||||||
Other income, net
|
12
|
9
|
21
|
15
|
6
|
21
|
||||||||||||||||||||||||||
Operating profit (loss)
|
140
|
(33
|
)
|
107
|
46
|
30
|
76
|
|||||||||||||||||||||||||
Adjustments to presentation of segment
Adjusted EBITDA
|
||||||||||||||||||||||||||||||||
– Depreciation and amortization
|
310
|
248
|
342
|
192
|
||||||||||||||||||||||||||||
– Other (1)
|
4
|
3
|
7
|
2
|
||||||||||||||||||||||||||||
Segment Adjusted EBITDA (2)
|
454
|
218
|
395
|
224
|
||||||||||||||||||||||||||||
Reconciliation of segment subtotal Adjusted EBITDA to profit for the period
|
||||||||||||||||||||||||||||||||
Segments subtotal Adjusted EBITDA (2)
|
672
|
619
|
||||||||||||||||||||||||||||||
- Depreciation and amortization
|
(558
|
)
|
(534
|
)
|
||||||||||||||||||||||||||||
- Finance costs, net
|
(50
|
)
|
(56
|
)
|
||||||||||||||||||||||||||||
- Income tax expenses
|
(19
|
)
|
(8
|
)
|
||||||||||||||||||||||||||||
- Other (1)
|
(7
|
)
|
(9
|
)
|
||||||||||||||||||||||||||||
Profit for the period
|
38
|
12
|
New Israeli Shekels
|
New Israeli Shekels
|
|||||||||||||||||||||||||||||||
3 months period ended September 30, 2021
|
3 months period ended September 30, 2020
|
|||||||||||||||||||||||||||||||
In millions (Unaudited)
|
In millions (Unaudited)
|
|||||||||||||||||||||||||||||||
|
Cellular
segment
|
Fixed line
segment
|
Elimination
|
Consolidated
|
Cellular
segment
|
Fixed line
segment
|
Elimination
|
Consolidated
|
||||||||||||||||||||||||
Segment revenue - Services
|
432
|
240
|
672
|
411
|
220
|
631
|
||||||||||||||||||||||||||
Inter-segment revenue - Services
|
3
|
30
|
(33
|
)
|
4
|
32
|
(36
|
)
|
||||||||||||||||||||||||
Segment revenue - Equipment
|
136
|
29
|
165
|
134
|
35
|
169
|
||||||||||||||||||||||||||
Total revenues
|
571
|
299
|
(33
|
)
|
837
|
549
|
287
|
(36
|
)
|
800
|
||||||||||||||||||||||
Segment cost of revenues - Services
|
291
|
248
|
539
|
320
|
226
|
546
|
||||||||||||||||||||||||||
Inter-segment cost of revenues - Services
|
30
|
3
|
(33
|
)
|
32
|
4
|
(36
|
)
|
||||||||||||||||||||||||
Segment cost of revenues - Equipment
|
110
|
18
|
128
|
110
|
21
|
131
|
||||||||||||||||||||||||||
Cost of revenues
|
431
|
269
|
(33
|
)
|
667
|
462
|
251
|
(36
|
)
|
677
|
||||||||||||||||||||||
Gross profit
|
140
|
30
|
170
|
87
|
36
|
123
|
||||||||||||||||||||||||||
Operating expenses (3)
|
78
|
49
|
127
|
72
|
39
|
111
|
||||||||||||||||||||||||||
Other income, net
|
4
|
2
|
6
|
5
|
3
|
8
|
||||||||||||||||||||||||||
Operating profit (loss)
|
66
|
(17
|
)
|
49
|
20
|
*
|
20
|
|||||||||||||||||||||||||
Adjustments to presentation of segment
Adjusted EBITDA
|
||||||||||||||||||||||||||||||||
– Depreciation and amortization
|
105
|
93
|
113
|
68
|
||||||||||||||||||||||||||||
– Other (1)
|
1
|
2
|
1
|
2
|
||||||||||||||||||||||||||||
Segment Adjusted EBITDA (2)
|
172
|
78
|
134
|
70
|
||||||||||||||||||||||||||||
Reconciliation of segment subtotal Adjusted EBITDA to profit for the period
|
||||||||||||||||||||||||||||||||
Segments subtotal Adjusted EBITDA (2)
|
250
|
204
|
||||||||||||||||||||||||||||||
- Depreciation and amortization
|
(198
|
)
|
(181
|
)
|
||||||||||||||||||||||||||||
- Finance costs, net
|
(15
|
)
|
(24
|
)
|
||||||||||||||||||||||||||||
- Income tax expenses
|
(10
|
)
|
(1
|
)
|
||||||||||||||||||||||||||||
- Other (1)
|
(3
|
)
|
(3
|
)
|
||||||||||||||||||||||||||||
Profit for the period
|
24
|
(5
|
)
|
New Israeli Shekels |
Convenience
translation into
U.S. Dollars
|
|||||||||||
9 months period ended September 30,
|
||||||||||||
2020
|
2021
|
2021
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
In millions
|
||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Cash generated from operations (Appendix)
|
605
|
612
|
189
|
|||||||||
Income tax paid
|
(1
|
)
|
(1
|
)
|
*
|
|||||||
Net cash provided by operating activities
|
604
|
611
|
189
|
|||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Acquisition of property and equipment
|
(293
|
)
|
(344
|
)
|
(107
|
)
|
||||||
Acquisition of intangible and other assets
|
(124
|
)
|
(116
|
)
|
(36
|
)
|
||||||
Proceeds from (investment in) deposits, net
|
(106
|
)
|
45
|
14
|
||||||||
Interest received
|
3
|
1
|
*
|
|||||||||
Net cash used in investing activities
|
(520
|
)
|
(414
|
)
|
(129
|
)
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Lease principal payments
|
(102
|
)
|
(102
|
)
|
(31
|
)
|
||||||
Lease interest payments
|
(13
|
)
|
(14
|
)
|
(4
|
)
|
||||||
Interest paid
|
(42
|
)
|
(43
|
)
|
(13
|
)
|
||||||
Share issuance
|
276
|
*
|
*
|
|||||||||
Proceeds from issuance of notes payable, net of issuance costs
|
412
|
23
|
7
|
|||||||||
Repayment of notes payable
|
(510
|
)
|
(128
|
)
|
(39
|
)
|
||||||
Repayment of non-current borrowings
|
(39
|
)
|
(39
|
)
|
(12
|
)
|
||||||
Settlement of contingent consideration
|
(1
|
)
|
*
|
*
|
||||||||
Net cash used in financing activities
|
(19
|
)
|
(303
|
)
|
(92
|
)
|
||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
65
|
(106
|
)
|
(32
|
)
|
|||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
299
|
376
|
116
|
|||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
364
|
270
|
84
|
New Israeli Shekels |
Convenience
translation
into
U.S. Dollars
|
|||||||||||
9 months period ended September 30,
|
||||||||||||
2020
|
2021
|
2021
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
In millions
|
||||||||||||
Cash generated from operations:
|
||||||||||||
Profit for the period
|
12
|
38
|
12
|
|||||||||
Adjustments for:
|
||||||||||||
Depreciation and amortization
|
511
|
535
|
166
|
|||||||||
Amortization of deferred expenses - Right of use
|
23
|
23
|
7
|
|||||||||
Employee share based compensation expenses
|
8
|
8
|
2
|
|||||||||
Liability for employee rights upon retirement, net
|
(1
|
)
|
4
|
1
|
||||||||
Finance costs, net
|
(1
|
)
|
(3
|
)
|
(1
|
)
|
||||||
Lease interest payments
|
13
|
14
|
4
|
|||||||||
Interest paid
|
42
|
43
|
13
|
|||||||||
Interest received
|
(3
|
)
|
(1
|
)
|
*
|
|||||||
Deferred income taxes
|
6
|
12
|
4
|
|||||||||
Income tax paid
|
1
|
1
|
*
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Decrease (increase) in accounts receivable:
|
||||||||||||
Trade
|
57
|
(18
|
)
|
(6
|
)
|
|||||||
Other
|
3
|
7
|
2
|
|||||||||
Increase (decrease) in accounts payable and accruals:
|
||||||||||||
Trade
|
(14
|
)
|
(18
|
)
|
(6
|
)
|
||||||
Other payables
|
(22
|
)
|
21
|
7
|
||||||||
Provisions
|
(10
|
)
|
5
|
2
|
||||||||
Deferred revenues from HOT mobile
|
(23
|
)
|
(23
|
)
|
(7
|
)
|
||||||
Other deferred revenues
|
20
|
14
|
4
|
|||||||||
Increase (decrease) in deferred expenses - Right of use
|
(34
|
)
|
(42
|
)
|
(13
|
)
|
||||||
Current income tax
|
2
|
6
|
2
|
|||||||||
Decrease (increase) in inventories
|
15
|
(14
|
)
|
(4
|
)
|
|||||||
Cash generated from operations
|
605
|
612
|
189
|
Adjusted Free Cash Flow
|
New Israeli Shekels
|
Convenience translation into
U.S. Dollars |
||||||||||||||||||||||
9 months period ended
September 30,
|
3 months period ended
September 30,
|
9 months period ended
September 30,
|
3 months period ended
September 30,
|
|||||||||||||||||||||
2020
|
2021
|
2020
|
2021
|
2021
|
2021
|
|||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||
In millions
|
||||||||||||||||||||||||
Net cash provided by operating activities
|
604
|
611
|
207
|
224
|
189
|
69
|
||||||||||||||||||
Net cash used in investing activities
|
(520
|
)
|
(414
|
)
|
(198
|
)
|
(177
|
)
|
(129
|
)
|
(55
|
)
|
||||||||||||
Investment in (proceeds from) deposits, net
|
106
|
(45
|
)
|
51
|
5
|
(14
|
)
|
2
|
||||||||||||||||
Lease principal payments
|
(102
|
)
|
(102
|
)
|
(35
|
)
|
(38
|
)
|
(31
|
)
|
(11
|
)
|
||||||||||||
Lease interest payments
|
(13
|
)
|
(14
|
)
|
(4
|
)
|
(5
|
)
|
(4
|
)
|
(2
|
)
|
||||||||||||
Adjusted Free Cash Flow
|
75
|
36
|
21
|
9
|
11
|
3
|
||||||||||||||||||
Interest paid
|
(42
|
)
|
(43
|
)
|
(9
|
)
|
(1
|
)
|
(13
|
)
|
(1
|
)
|
||||||||||||
Adjusted Free Cash Flow After Interest
|
33
|
(7
|
)
|
12
|
8
|
(2
|
)
|
2
|
Total Operating Expenses (OPEX)
|
New Israeli Shekels
|
Convenience translation into
U.S. Dollars |
||||||||||||||||||||||
9 months period ended
September 30,
|
3 months period ended
September 30,
|
9 months period ended
September 30,
|
3 months period ended
September 30,
|
|||||||||||||||||||||
2020
|
2021
|
2020
|
2021
|
2021
|
2021
|
|||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||||||
In millions
|
||||||||||||||||||||||||
Cost of revenues - Services
|
1,585
|
1,622
|
546
|
539
|
502
|
166
|
||||||||||||||||||
Selling and marketing expenses
|
212
|
238
|
72
|
81
|
74
|
25
|
||||||||||||||||||
General and administrative expenses
|
129
|
132
|
39
|
46
|
41
|
15
|
||||||||||||||||||
Depreciation and amortization
|
(534
|
)
|
(558
|
)
|
(181
|
)
|
(198
|
)
|
(173
|
)
|
(61
|
)
|
||||||||||||
Other (1)
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
*
|
*
|
||||||||||||||
OPEX
|
1,391
|
1,433
|
475
|
467
|
444
|
145
|
(1) |
Mainly amortization of employee share based compensation and other adjustments.
|
NIS M unless otherwise stated
|
Q3' 19
|
Q4' 19
|
Q1' 20
|
Q2' 20
|
Q3' 20
|
Q4' 20
|
Q1' 21
|
Q2' 21
|
Q3' 21
|
2019
|
2020
|
|||||||||||||||||||||||||||||||||
Cellular Segment Service Revenues
|
466
|
438
|
423
|
409
|
415
|
416
|
413
|
420
|
435
|
1,798
|
1,663
|
|||||||||||||||||||||||||||||||||
Cellular Segment Equipment Revenues
|
142
|
172
|
146
|
130
|
134
|
135
|
160
|
157
|
136
|
571
|
545
|
|||||||||||||||||||||||||||||||||
Fixed-Line Segment Service Revenues
|
233
|
238
|
245
|
244
|
252
|
252
|
260
|
262
|
270
|
925
|
993
|
|||||||||||||||||||||||||||||||||
Fixed-Line Segment Equipment Revenues
|
25
|
26
|
32
|
28
|
35
|
41
|
34
|
34
|
29
|
103
|
136
|
|||||||||||||||||||||||||||||||||
Reconciliation for consolidation
|
(41
|
)
|
(40
|
)
|
(39
|
)
|
(37
|
)
|
(36
|
)
|
(36
|
)
|
(34
|
)
|
(33
|
)
|
(33
|
)
|
(163
|
)
|
(148
|
)
|
||||||||||||||||||||||
Total Revenues
|
825
|
834
|
807
|
774
|
800
|
808
|
833
|
840
|
837
|
3,234
|
3,189
|
|||||||||||||||||||||||||||||||||
Gross Profit from Equipment Sales
|
33
|
37
|
37
|
30
|
38
|
40
|
42
|
39
|
37
|
144
|
145
|
|||||||||||||||||||||||||||||||||
Operating Profit
|
26
|
30
|
36
|
20
|
20
|
20
|
28
|
30
|
49
|
87
|
96
|
|||||||||||||||||||||||||||||||||
Cellular Segment Adjusted EBITDA
|
170
|
156
|
132
|
129
|
134
|
138
|
143
|
139
|
172
|
635
|
533
|
|||||||||||||||||||||||||||||||||
Fixed-Line Segment Adjusted EBITDA
|
55
|
61
|
83
|
71
|
70
|
65
|
66
|
74
|
78
|
218
|
289
|
|||||||||||||||||||||||||||||||||
Total Adjusted EBITDA
|
225
|
217
|
215
|
200
|
204
|
203
|
209
|
213
|
250
|
853
|
822
|
|||||||||||||||||||||||||||||||||
Adjusted EBITDA Margin (%)
|
27
|
%
|
26
|
%
|
27
|
%
|
26
|
%
|
26
|
%
|
25
|
%
|
25
|
%
|
25
|
%
|
30
|
%
|
26
|
%
|
26
|
%
|
||||||||||||||||||||||
OPEX
|
474
|
467
|
460
|
456
|
475
|
480
|
481
|
485
|
467
|
1,885
|
1,871
|
|||||||||||||||||||||||||||||||||
Finance costs, net
|
18
|
20
|
19
|
13
|
24
|
13
|
19
|
16
|
15
|
68
|
69
|
|||||||||||||||||||||||||||||||||
Profit (Loss)
|
7
|
7
|
10
|
7
|
(5
|
)
|
5
|
5
|
9
|
24
|
19
|
17
|
||||||||||||||||||||||||||||||||
Capital Expenditures (cash)
|
174
|
127
|
151
|
119
|
147
|
156
|
149
|
139
|
172
|
629
|
573
|
|||||||||||||||||||||||||||||||||
Capital Expenditures (additions)
|
150
|
129
|
129
|
121
|
179
|
166
|
142
|
182
|
112
|
578
|
595
|
|||||||||||||||||||||||||||||||||
Adjusted Free Cash Flow
|
13
|
16
|
10
|
44
|
21
|
(3
|
)
|
19
|
8
|
9
|
49
|
72
|
||||||||||||||||||||||||||||||||
Adjusted Free Cash Flow (after interest)
|
12
|
0
|
8
|
13
|
12
|
(10
|
)
|
18
|
(33
|
)
|
8
|
12
|
23
|
|||||||||||||||||||||||||||||||
Net Debt
|
956
|
957
|
673
|
658
|
646
|
657
|
639
|
670
|
662
|
957
|
657
|
|||||||||||||||||||||||||||||||||
Cellular Subscriber Base (Thousands)
|
2,651
|
2,657
|
2,676
|
2,708
|
2,762
|
2,836
|
2,903
|
2,970
|
3,019
|
2,657
|
2,836
|
|||||||||||||||||||||||||||||||||
Post-Paid Subscriber Base (Thousands)
|
2,366
|
2,366
|
2,380
|
2,404
|
2,437
|
2,495
|
2,548
|
2,615
|
2,664
|
2,366
|
2,495
|
|||||||||||||||||||||||||||||||||
Pre-Paid Subscriber Base (Thousands)
|
285
|
291
|
296
|
304
|
325
|
341
|
355
|
355
|
355
|
291
|
341
|
|||||||||||||||||||||||||||||||||
Cellular ARPU (NIS)
|
59
|
55
|
53
|
51
|
51
|
49
|
48
|
48
|
48
|
57
|
51
|
|||||||||||||||||||||||||||||||||
Cellular Churn Rate (%)
|
7.7
|
%
|
7.2
|
%
|
7.5
|
%
|
7.5
|
%
|
7.3
|
%
|
7.2
|
%
|
6.8
|
%
|
7.2
|
%
|
6.4
|
%
|
31
|
%
|
30
|
%
|
||||||||||||||||||||||
Infrastructure-Based Internet Subscribers (Thousands)
|
268
|
281
|
295
|
311
|
329
|
339
|
354
|
365
|
268
|
329
|
||||||||||||||||||||||||||||||||||
Fiber-Optic Subscribers (Thousands)
|
76
|
87
|
101
|
120
|
139
|
155
|
173
|
192
|
76
|
139
|
||||||||||||||||||||||||||||||||||
Homes connected to fiber-optic infrastructure (Thousands)
|
324
|
361
|
396
|
432
|
465
|
514
|
571
|
624
|
324
|
465
|
||||||||||||||||||||||||||||||||||
TV Subscriber Base (Thousands)
|
176
|
188
|
200
|
215
|
224
|
232
|
234
|
223
|
**
|
226
|
188
|
232
|
||||||||||||||||||||||||||||||||
Number of Employees (FTE)
|
2,923
|
2,834
|
1,867
|
2,745
|
2,731
|
2,655
|
2,708
|
2,628
|
2,627
|
2,834
|
2,655
|
*
|
See footnote 2 regarding use of non-GAAP measures.
|
**
|
In Q2'21, the Company removed from its TV subscriber base approximately 21,000 subscribers who had joined the company at various different times
and had remained in trial periods of over six months without charge or usage.
|
Series
|
Original issuance date
|
Principal on the date of issuance
|
As of 30.09.2021
|
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
|
**
|
109
|
1.219%
(MAKAM+1.2%)
|
30.12.17
|
30.12.21
|
30.03, 30.06, 30.09, 30.12
|
Variable interest MAKAM (3)
|
Hermetic Trust (1975) Ltd. Merav Offer. 113 Hayarkon St., Tel Aviv. Tel: 03-5544553.
|
F
(2)
|
20.07.17
12.12.17*
04.12.18*
01.12.19*
|
255
389
150
226.75
|
384
|
384
|
2
|
394
|
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*
31.05.21*
|
225
38.5
86.5
15.1
84.8
12.2
300
62.2
26.5
|
851
|
851
|
9
|
949
|
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, November 2020 and May 2021,
the Company issued Series G Notes in a principal amount of NIS 12.2 million, NIS 62.2 million and NIS 26.5 million, respectively. The issuance in May 2021 was the final exercise of option warrants from the second 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 September 30, 2021, the ratio of Net Debt to Adjusted EBITDA
was 0.8. Additional stipulations regarding Series F, Series G Notes and
borrowings P and Q 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; debt rating will not decrease below BBB- for a certain
period. 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) |
'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.
|
Series
|
Rating Company
|
Rating as of 30.09.2021 and 29.11.2021 (1)
|
Rating assigned upon issuance of the Series
|
Recent date of rating as of 30.09.2021 and 29.11.2021
|
Additional ratings between the original issuance date and the recent date of rating (2)
|
|
Date
|
Rating
|
|||||
D
|
S&P Maalot
|
ilA+
|
ilAA-
|
08/2021
|
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, 05/2021, 08/2021
|
ilAA-, ilAA-, ilAA-, ilAA-, ilAA-,
ilAA-, ilAA-, ilA+, ilA+, ilA+,
ilA+, ilA+, ilA+, ilA+, ilA+,
ilA+, ilA+, ilA+, ilA+, ilA+,
ilA+, ilA+, ilA+, ilA+
|
F
|
S&P Maalot
|
ilA+
|
ilA+
|
08/2021
|
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, 05/2021, 08/2021
|
ilA+, ilA+, ilA+, ilA+, ilA+,
ilA+, ilA+, ilA+, ilA+, ilA+,
ilA+, ilA+, ilA+, ilA+, ilA+,
ilA+, ilA+, ilA+
|
G (3)
|
S&P Maalot
|
ilA+
|
ilA+
|
08/2021
|
12/2018, 01/2019, 04/2019, 08/2019, 02/2020,
05/2020, 06/2020, 07/2020, 08/2020, 11/2020,
05/2021, 08/2021
|
ilA+, ilA+, ilA+, ilA+, ilA+,
ilA+, ilA+, ilA+, ilA+, ilA+,
ilA+, ilA+
|
(1)
|
In August 2021, S&P Maalot reaffirmed the Company's rating of “ilA+/Stable”.
|
(2)
|
For details regarding the rating of the notes see the S&P Maalot reports dated August 11, 2021.
|
(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, November 2020 and May 2021 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, NIS 62.2 million and NIS 26.5
million, respectively.
|
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
|
-
|
322,213
|
-
|
-
|
-
|
42,650
|
Second year
|
-
|
212,985
|
-
|
-
|
-
|
36,155
|
Third year
|
-
|
212,985
|
-
|
-
|
-
|
30,064
|
Fourth year
|
-
|
85,083
|
-
|
-
|
-
|
23,823
|
Fifth year and on
|
-
|
510,501
|
-
|
-
|
-
|
34,033
|
Total
|
-
|
1,343,767
|
-
|
-
|
-
|
166,725
|
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
|
-
|
-
|
-
|
1,959
|
Second year
|
-
|
30,073
|
-
|
-
|
-
|
825
|
Third year
|
-
|
17,080
|
-
|
-
|
-
|
213
|
Fourth year
|
-
|
-
|
-
|
-
|
-
|
-
|
Fifth year and on
|
-
|
-
|
-
|
-
|
-
|
-
|
Total
|
-
|
99,285
|
-
|
-
|
-
|
2,997
|
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
|
-
|
374,345
|
-
|
-
|
-
|
44,609
|
Second year
|
-
|
243,058
|
-
|
-
|
-
|
36,980
|
Third year
|
-
|
230,065
|
-
|
-
|
-
|
30,277
|
Fourth year
|
-
|
85,083
|
-
|
-
|
-
|
23,823
|
Fifth year and on
|
-
|
510,501
|
-
|
-
|
-
|
34,033
|
Total
|
-
|
1,443,052
|
-
|
-
|
-
|
169,722
|
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 – Immaterial
amount.
|
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.
|