Partner Communications Reports First Quarter 2008 Results
Partner Communications Company Ltd. ("Partner" or "the Company")
(Nasdaq:PTNR)(TASE:PTNR), a leading Israeli mobile communications
operator, today announced its results for the first quarter of 2008. Partner
reported total revenues in Q1 2008 of NIS 1.6 billion (US$ 447 million)
EBITDA of NIS 533 million (US$ 150 million), and net income of
NIS 243 million (US$ 68 million).
Commenting on the quarter´s results, Partner´s
CEO, Mr. David Avner, said: "We are pleased with the results of the
first quarter of 2008, in which Partner again delivered a strong
performance and improved its EBITDA and net income margins. This
achievement should be appreciated in light of the intense competition
regulatory changes and our continued investment in our high-standard
customer service.
In the first quarter, we have again succeeded in realizing our strategy
to focus on the post-paid segment, resulting in the recruitment of 40
thousand high-quality post-paid subscribers, 60% of whom are business
customers. The number of our 3G subscribers has continued to grow
reaching above 750 thousand at quarter end, or 36% of our post-paid
subscriber base. Our content business serves as an important growth
driver, reaching revenues of approximately NIS 200 million. Partner will
continue to invest in introducing new content and media applications and
enrich its content offering in order to maintain our leadership in this
strategic area.
Partner is determined to become a player in the broadband residential
market and has several alternatives for doing so. Technology and
regulatory trends, worldwide and in Israel, including the recent
recommendations of the Gronau committee to promote full local loop
unbundling, enable new entrants to offer high quality multimedia and
content services by using various access methods. We are currently
actively working on establishing our non-cellular platform, which I
believe will be introduced at the beginning of next year."
Mr. Avner concluded: "I am certain that Partner´s core strengths and
leadership will enable us to broaden our product and service portfolio
and to provide a comprehensive and rich solution to our customers´
communication needs."
1 See "Use of
Non-GAAP Financial Measures" below (p10)
2 Equivalent to 39.7% of service revenues in
Q1 2008, compared with 36.2% of service revenues in Q1 2007
3 On January 1st
2008 the Company adopted a more conservative and rigorous policy for
recognizing prepaid subscribers. The aim of the new policy is to ensure
that purchased prepaid SIM cards are only recognized in the subscriber
base after the prepaid SIM cards are actually used by the prepaid
subscribers. The change had the effect of reducing the subscriber base
on January 1st, 2008 by
approximately 61,000 subscribers.
= = = = = = = = = = =
Key Financial and Operational Parameters
- - - - - -
- - - - - -
Q1 2007
Q4 2007
Q1 2008
Q1´08 vs Q4´07
Q1´08 vs Q1´07
- - - - - -
Revenues (NIS millions)
1,417.8
1,627.4
1,587.8
-2.4%
12.0%
- - - - - -
Operating Profit (NIS millions)
301.1
346.5
348.8
0.7%
15.8%
- - - - - -
Net Income (NIS millions)
195.8
301.9
243.3
-19.4%
24.2%
- - - - - -
Cash flow from operating activities net of investing activities (NIS
millions)
241.1
305.5
-20.0
-106.5%
-108.3%
- - - - - -
EBITDA (NIS millions)
454.9
501.3
532.6
6.2%
17.1%
- - - - - -
Subscribers (thousands) 4
2,703
2,860
2,823
-1.3%
4.4%
- - - - - -
Estimated Market Share (%)
32
32
32
-
-
- - - - - -
Quarterly Churn Rate (%)
4.4
4.0
5.1
1.1
0.7
- - - - - -
Average Monthly Usage per Subscriber (minutes)
323
345
359
4.1%
11.1%
- - - - - -
Average Monthly Revenue per Subscriber (NIS)
153
157
155
-1.3%
1.3%
- - - - - -
Financial Review
Partner´s Q1 2008 net revenues totaled NIS 1,587.8 million (US$
446.9 million), an increase of 12.0% from NIS 1,417.8 million in Q1 2007.
Service revenues increased by 6.7% from NIS 1,258.3 million in Q1
2007 to NIS 1,342.5 million (US$ 377.8 million) in Q1 2008. The increase
primarily reflects the growth in the subscriber base4
an increase in the weight of post-paid subscribers in our subscriber
base, higher average minutes of use, as well as an increase in content
and data revenues. This was partially offset by a decrease in average
revenue per minute resulting from competitive pressures and regulatory
intervention including the approximate 14% reduction in interconnect
tariffs which went into effect on March 1st 2008, the final reduction in the Ministry of Communications´ program of
mandated gradual reductions from 2005 to 2008.
Revenues from content and data excluding SMS were NIS 122.4
million (US$ 34.5 million) in Q1 2008, representing an increase of 40.8%
from Q1 2007, the equivalent of 9.1% of service revenues in Q1 2008
compared with 6.9% of service revenues in Q1 2007. Revenues from SMS totaled
NIS 75.9 million (US$ 21.4 million), increasing by 32.7% from Q1 2007
the equivalent of 5.7% of service revenues in Q1 2008, compared with
4.5% in Q1 2007.
Gross profit from services increased by 8.2% in Q1 2008
compared with Q1 2007, from NIS 499.9 million to NIS 540.9 million (US$
152.2 million). The increase reflects the higher service revenues
offset by a 5.7% increase in the cost of service revenues. The cost of
service revenues increased primarily due to additional depreciation
expenses of approximately NIS 36 million resulting from the accelerated
depreciation of the equipment to be replaced under an agreement with LM
Ericsson Israel Ltd. Most of the accelerated depreciation is expected to
be recorded during 2008, resulting in additional full year depreciation
expenses of approximately NIS 70 million.
Equipment revenues totaled NIS 245.3 million (US$ 69.0 million)
in Q1 2008, a 53.8% increase from NIS 159.5 million in Q1 2007. The
increase is primarily attributable to the higher proportion of 3G
handsets sold compared with 2G handsets. Gross loss on equipment in Q1 2008 was NIS 34.4 million (US$ 9.7 million), compared with NIS
53.9 million in Q1 2007, a decrease of 36.1%. This resulted from
increased use of more competitive airtime rate plan tariffs that offer
lower subsidies, as well as from a decrease in the cost per handset sold.
Overall, gross profit in Q1 2008 increased by 13.6%, from NIS
446.0 million in Q1 2007 to NIS 506.5 million (US$ 142.5 million) in Q1
2008.
Selling, marketing, general and administration expenses totaled
NIS 157.7 million (US$ 44.4 million) in Q1 2008, an 8.9% increase from
NIS 144.9 million in Q1 2007. The increase was due mainly to additional
costs of growing the subscriber base, including larger provisions for
doubtful accounts from receivables on handset sales and service revenues
and higher selling and distribution costs.
Overall, Q1 2008 operating profit was NIS 348.8 million (US$ 98.2
million), representing a 15.8% increase compared with NIS 301.1 million
in Q1 2007.
Quarterly EBITDA in Q1 2008 amounted to NIS 532.6 million (US$
149.9 million), equivalent to 39.7% of service revenues or 33.5% of
total revenues, an increase of 17.1% from NIS 454.9 million, 36.2% of
service revenues or 32.1% of total revenues, in Q1 2007.
Financial expenses in Q1 2008 were NIS 15.6 million (US$ 4.4
million), decreasing by 20.5% from NIS 19.6 million in Q1 2007. The
decrease is primarily due to an increase in gains from currency exchange
movements, partially offset by higher linkage expenses due to the higher
CPI level.
Quarterly net income in the first quarter 2008 was NIS 243.3
million (US$ 68.5 million), compared with NIS 195.8 million in Q1 2007
an increase of 24.2%.
Basic earnings per share or ADS, based on the average number of
shares outstanding during Q1 2008, was NIS 1.55 (44 US cents), up by
23.0% from NIS 1.26 in Q1 2007.
4 See footnote 3 on page 1.
Funding and Investing Review
Cash flows generated from operating activities, net of cash flows
from investing activities totaled negative NIS 20.0 million (US$ 5.6
million) in Q1 2008, compared with NIS 241.1 million in Q1 2007, a
decrease of 108.3%. The decrease was primarily due to a decrease in cash
flows from operating activities of 75.8% from NIS 384.6 million in Q1
2007 to NIS 93.1 million (US$ 26.2 million) in Q1 2008, reflecting the
large increase in cash flows from operating activities in Q1 2007 due to
a change in payment terms to suppliers, as well as payments during Q1
2008 for handset inventories. This decrease was partially offset by a
decrease in cash flows used for investing activities which totaled NIS
113.1 million (US$ 31.8 million) in Q1 2008, a decrease of 21.2% from
NIS 143.5 million in Q1 2007.
In February 2008, the Board approved a share buy-back plan throughout 2008 in an amount of up to NIS 600 million, subject to
appropriate market conditions. As of March 31st
2008, the Company had repurchased approximately 625,000 of its shares at
an average price per share of NIS 77.61, for a total consideration of
approximately NIS 49 million.
The Board has approved the distribution of a dividend for Q1
2008 of NIS 1.24 (35 US cents) per share (in total approximately
NIS 195 million or US$ 55 million) to shareholders and ADS holders of
record on May 28th, 2008. The dividend will be
paid on June 12th, 2008.
Operational Review
On January 1st, 2008 the Company adopted a more
conservative and rigorous policy for recognizing prepaid subscribers.
The aim of the new policy is to ensure that purchased prepaid SIM cards
are only recognized in the subscriber base after the prepaid SIM cards
are actually used by the prepaid subscribers. The change had the effect
of reducing the subscriber base on January 1st
2008 by approximately 61,000 subscribers.
Approximately 24,000 net active subscribers joined the Company in
Q1 2008, comprising approximately 40,000 net active postpaid subscribers
joining the Company and 16,000 net active prepaid subscribers leaving
the Company. Following the change in the subscriber recognition policy
the Company´s active subscriber base at the end of Q1 2008 was
approximately 2,823,000, including approximately 727,000 business
subscribers (25.8% of the base), 1,381,000 postpaid private subscribers
(48.9% of the base) and 715,000 prepaid subscribers (25.3% of the base).
Total market share at the end of the quarter is estimated to be
unchanged at 32%.
The Company´s 3G subscriber base reached approximately 753,000 by
the end of Q1 2008, with approximately 120,000 subscribers joining the
3G network during the quarter.
The quarterly churn rate increased from 4.4% in Q1 2007 to 5.1%
in Q1 2008. The increase is generally explained by the effect of the
introduction of number portability in December 2007, with most of the
increase being attributable to higher churn in the prepaid segment
(churn does not include the impact of the change in subscriber
recognition policy).
Q1 2008 average monthly usage per subscriber (MOU) was 359 minutes, an
increase of 11.1% from 323 in Q1 2007. Average revenue per user (ARPU)
was approximately NIS 155 (US$ 44) in Q1 2008, an increase of 1.3% from
NIS 153 in Q1 2007.
Outlook and Guidance
Commenting on the Company´s results, Mr. Emanuel Avner, Partner´s Chief
Financial Officer said: "We are pleased that our trend of improvement in
operational and financial performance has continued this quarter. And
whilst free cash flow was negative in the quarter due to activities
related to the introduction of number portability, it is expected to
return to a normal level in the second quarter. Partner continues to
offer shareholders an attractive high dividend yield, and the ongoing
share buy-back program for 2008 provides for a further opportunity to
raise the EPS."
Mr. Avner added: "Our quarterly results and future prospects support the
annual guidance for 2008 we gave in the press release of February 6th
2008."
Conference Call Details
Partner Communications will hold a conference call to discuss the company´s
first quarter results on Monday, May 5th, 2008
at 17:00 Israel local time (10AM EST). This conference call will be
broadcast live over the Internet and can be accessed by all interested
parties through our investor relations web site at http://www.orange.co.il/investor_site/.
To listen to the broadcast, please go to the web site at least 15
minutes prior to the start of the call to register, download and install
any necessary audio software. For those unable to listen to the live
broadcast, an archive of the call will be available via the Internet (at
the same location as the live broadcast) shortly after the call ends
and until midnight of May 12th, 2008.
About Partner Communications
Partner Communications Company Ltd. ("Partner") is a leading Israeli
mobile communications operator providing GSM / GPRS / UMTS / HSDPA
services and wire free applications under the orangeâ„¢brand. The Company provides quality service and a range of features to
2.823 million subscribers in Israel (as of March 31st
2008). Partner´s ADSs are quoted on the NASDAQ
Global Select Marketâ„¢ and its shares are
traded on the Tel Aviv Stock Exchange (NASDAQ and TASE: PTNR).
Partner is a subsidiary of Hutchison Telecommunications International
Limited ("Hutchison Telecom"), a leading global provider of
telecommunications services. Hutchison Telecom currently offers mobile
and fixed line telecommunications services in Hong Kong, and operates
mobile telecommunications services in Israel, Macau, Thailand, Sri
Lanka, Ghana, Vietnam and Indonesia. It was the first provider of 3G
mobile services in Hong Kong and Israel and operates brands including "Hutch"
"3" and "orange".
Hutchison Telecom, a subsidiary of Hutchison Whampoa Limited, is a
listed company with American Depositary Shares quoted on the New York
Stock Exchange under the ticker "HTX" and shares listed on the Stock
Exchange of Hong Kong under the stock code "2332". For more information
about Hutchison Telecom, see www.htil.com.
For more information about Partner, see http://www.orange.co.il/investor_site/
Note: This press release includes forward-looking statements within
the meaning of Section 27A of the US Securities Act of 1933, as amended
Section 21E of the US Securities Exchange Act of 1934, as amended, and
the safe harbor provisions of the US Private Securities Litigation
Reform Act of 1995. We have based these forward-looking statements on
our current expectations and projections about future events. These
forward-looking statements are subject to risks, uncertainties and
assumptions about Partner.
Words such as "believe," "anticipate," "expect," "intend," "seek," "will," "plan," "could," "may," "project," "goal," "target" and
similar expressions often identify forward-looking statements but are
not the only way we identify these statements. All statements other than
statements of historical fact included in this press release regarding
our future performance (including our outlook and guidance for 2008)
plans to increase revenues or margins or preserve or expand market share
in existing or new markets, reduce expenses and any statements regarding
other future events or our future prospects, are forward-looking
statements.
Because such statements involve risks and uncertainties, actual
results may differ materially from the results currently expected.
Factors that could cause such differences include, but are not limited
to:
the effects of the high degree of regulation in the
telecommunications market in which we operate;
regulatory developments related to the implementation of number
portability;
regulatory developments relating to tariffs, including interconnect
tariffs, roaming charges, and SMS tariffs;
the difficulties associated with obtaining all permits required for
building and operating of antenna sites;
the requirement to indemnify planning committees in respect of
claims made against them relating to the depreciation of property
values or to alleged health damage resulting from antenna sites;
the effects of vigorous competition in the market in which we
operate and for more valuable customers, which may decrease prices
charged, increase churn and change our customer mix, profitability and
average revenue per user, and the response of competitors to industry
and regulatory developments;
regulatory developments which permit the Ministry of Communications
to require us to offer our network infrastructure to other operators
which may lower the entry barrier for new competitors;
uncertainties about the degree of growth in the number of consumers
in Israel using wireless personal communications services and the
growth in the Israeli population;
the risks associated with the implementation of a third generation
(3G) network and business strategy, including risks relating to the
operations of new systems and technologies, potential unanticipated
costs
uncertainties regarding the adequacy of suppliers on whom we must
rely to provide both network and consumer equipment and consumer
acceptance of the products and services to be offered, and the risk
that the use of internet search engines by our 3G customers will be
restricted;
the results of litigation filed or that may be filed against us;
the risk that, following a possible rearrangement of spectrum, we
may lose some of our frequencies or we may be allocated spectrum of
inferior quality;
the risks associated with technological requirements, technology
substitution and changes and other technological developments;
alleged health risks related to antenna sites and use of
telecommunication devices;
the impact of existing and new competitors in the market in which
we compete, including competitors that may offer less expensive
products and services, desirable or innovative products, technological
substitutes, or have extensive resources or better financing;
fluctuations in foreign exchange rates;
the possibility of the market in which we compete being impacted by
changes in political, economic or other factors, such as monetary
policy, legal and regulatory changes or other external factors over
which we have no control; and
the availability and cost of capital and the consequences of
increased leverage.
as well as the risks discussed in Risk Factors, Information on the
Company and Operating and Financial Review and Prospects in form 20-F
filed with the SEC on June 12th
2007. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this report might not occur.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information
future events or otherwise.
The financial results presented in this press release are preliminary
un-audited financial results.
The results were prepared in accordance with U.S. GAAP, other than
EBITDA which is a non-GAAP financial measure.
The convenience translations of the Nominal New Israeli Shekel (NIS)
figures into US Dollars were made at the rate of exchange prevailing at
March 31st, 2008: US $1.00 equals
NIS 3.553. The translations were made purely for the convenience of the
reader.
Use of Non-GAAP Financial Measure:
Earnings before interest, taxes, depreciation, amortization
exceptional items and capitalization of intangible assets (´EBITDA´) is
presented because it is a measure commonly used in the
telecommunications industry and is presented solely to enhance the
understanding of our operating results. EBITDA, however, should not be
considered as an alternative to operating income or income for the year
as an indicator of our operating performance. Similarly, EBITDA should
not be considered as an alternative to cash flow from operating
activities as a measure of liquidity. EBITDA is not a measure of
financial performance under generally accepted accounting principles and
may not be comparable to other similarly titled measures for other
companies. EBITDA may not be indicative of our historic operating
results nor is it meant to be predictive of potential future results.
Reconciliation between our net cash flow from operating activities
and EBIDTA is presented in the attached summary financial results.
= = = = = = = = = = =
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
SUMMARY OPERATING DATA
- - - - - -
- - - - - -
Q1 2007
Q4 2007
Q1 2008
- - - - - -
Subscribers (in thousands)5
2,703
2,860
2,823
- - - - - -
Estimated share of total Israeli mobile telephone subscribers
32%
32%
32%
- - - - - -
Churn rate in quarter
4.4%
4.0%
5.1%
- - - - - -
Average monthly usage in quarter per subscriber (actual minutes use)
323
345
359
- - - - - -
Average monthly revenue in year per subscriber, including in-roaming
revenue (NIS)
153
157
155
- - - - - -
5 See footnote 3 on page 1
= = = = = = = = = = =
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED BALANCE SHEETS
- - - - - -
- - - - - -
New Israeli shekels
Convenience translation into U.S. dollars
- - - - - -
March 31
December 31
March 31
December 31
- - - - - -
2008
2007
2008
2007
- - - - - -
(Unaudited)
(Audited)
(Unaudited)
(Audited)
- - - - - -
In thousands
- - - - - -
Assets
- - - - - -
CURRENT ASSETS:
- - - - - -
Cash and cash equivalents
5,490
148,096
1,545
41,682
- - - - - -
Accounts receivable:
- - - - - -
Trade
1,163,594
1,120,842
327,496
315,464
- - - - - -
Other
75,293
55,273
21,192
15,556
- - - - - -
Inventories
220,902
143,022
62,173
40,254
- - - - - -
Deferred income taxes
51,269
46,089
14,430
12,972
- - - - - -
Total current assets
1,516,548
1,513,322
426,836
425,928
- - - - - -
INVESTMENTS AND LONG-TERM RECEIVABLES:
- - - - - -
Accounts receivable - trade
504,552
446,899
142,007
125,780
- - - - - -
Funds in respect of employee rights upon retirement
85,279
88,522
24,002
24,915
- - - - - -
589,831
535,421
166,009
150,695
- - - - - -
FIXED ASSETS, net of accumulated depreciation and
amortization
1,679,899
1,734,964
472,811
488,310
- - - - - -
LICENSE, DEFERRED CHARGES AND OTHER INTANGIBLE ASSETS, net
of accumulated amortization
1,130,631
1,153,926
318,219
324,775
- - - - - -
DEFERRED INCOME TAXES
92,794
93,745
26,117
26,385
- - - - - -
Total assets
5,009,703
5,031,378
1,409,992
1,416,093
- - - - - -
= = = = = = = = = = =
New Israeli shekels
Convenience translation into U.S. dollars
- - - - - -
March 31
December 31
March 31
December 31
- - - - - -
2008
2007
2008
2007
- - - - - -
(Unaudited)
(Audited)
(Unaudited)
(Audited)
- - - - - -
In thousands
- - - - - -
Liabilities and shareholders´ equity
- - - - - -
CURRENT LIABILITIES:
- - - - - -
Short term liabilities and current
100,891
28,280
28,396
7,959
- - - - - -
Accounts payable and accruals:
- - - - - -
Trade
688,345
749,623
193,736
210,984
- - - - - -
Other
296,786
375,510
83,531
105,688
- - - - - -
Parent group - trade
1,742
3,405
490
958
- - - - - -
Dividend payable
156,249
43,977
- - - - - -
Total current liabilities
1,244,013
1,156,818
350,130
325,589
- - - - - -
LONG-TERM LIABILITIES:
- - - - - -
Notes payable
2,080,866
2,072,636
585,665
583,348
- - - - - -
Liability for employee rights upon retirement
132,897
131,960
37,404
37,140
- - - - - -
Other liabilities
13,069
14,492
3,678
4,079
- - - - - -
Total long-term liabilities
2,226,832
2,219,088
626,747
624,567
- - - - - -
COMMITMENTS AND CONTINGENT LIABILITIES
- - - - - -
Total liabilities
3,470,845
3,375,906
976,877
950,156
- - - - - -
SHAREHOLDERS´ EQUITY:
- - - - - -
Share capital - ordinary shares of NIS 0.01 par value: authorized
- December 31, 2007 and March 2008 - 235,000,000 shares; issued
and outstanding - December 31, 2007 "“157,320,770
shares March 31, 2008 "“157,461,853
shares
1,575
1,573
444
443
- - - - - -
Less "“ treasury shares, at cost (625,000
Ordinary Shares)
(48,611)
(13,681)
- - - - - -
Capital surplus
2,551,606
2,544,943
718,155
716,280
- - - - - -
Accumulated deficit
(965,712)
(891,044)
(271,803)
(250,786)
- - - - - -
Total shareholders´ equity
1,538,858
1,655,472
433,115
465,937
- - - - - -
5,009,703
5,031,378
1,409,992
1,416,093
- - - - - -
= = = = = = = = = = =
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
- - - - - -
- - - - - -
New Israeli shekels
Convenience
translation into U.S. dollars
- - - - - -
3 month period endedMarch 31
3 month period endedMarch 31
- - - - - -
2008
2007
2008
- - - - - -
(Unaudited)
- - - - - -
In thousands (except per share data)
- - - - - -
REVENUES - net:
- - - - - -
Services
1,342,485
1,258,315
377,845
- - - - - -
Equipment
245,295
159,469
69,039
- - - - - -
1,587,780
1,417,784
446,884
- - - - - -
COST OF REVENUES:
- - - - - -
Services
801,576
758,445
225,606
- - - - - -
Equipment
279,732
213,370
78,731
- - - - - -
1,081,308
971,815
304,337
- - - - - -
GROSS PROFIT
506,472
445,969
142,547
- - - - - -
OPERATING EXPENSES
157,703
144,868
44,386
- - - - - -
OPERATING PROFIT
348,769
301,101
98,161
- - - - - -
FINANCIAL EXPENSES, net
15,605
19,618
4,391
- - - - - -
INCOME BEFORE TAXES ON INCOME
333,164
281,483
93,770
- - - - - -
TAXES ON INCOME
89,894
85,634
25,301
- - - - - -
CUMULATIVE EFFECT, AT BEGINNING OF YEAR, OF A CHANGE IN
ACCOUNTING PRINCIPLES
- - - - - -
NET INCOME FOR THE YEAR
243,270
195,849
68,469
- - - - - -
EARNINGS PER SHARE ("EPS"):
- - - - - -
- - - - - -
Basic:
1.55
1.26
0.44
- - - - - -
- - - - - -
Diluted:
1.54
1.25
0.43
- - - - - -
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
- - - - - -
Basic
157,288,016
155,573,108
157,288,016
- - - - - -
Diluted
158,383,739
156,881,429
158,383,739
- - - - - -
= = = = = = = = = = =
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
- - - - - -
- - - - - -
New Israeli shekels
Convenience
translation intoU.S. dollars
- - - - - -
3 month period endedMarch 31
3 month period endedMarch 31
- - - - - -
2008
2007
2008
- - - - - -
(Unaudited)
- - - - - -
In thousands (except per share data)
- - - - - -
CASH FLOWS FROM OPERATING ACTIVITIES:
- - - - - -
Net income for the period
243,270
195,849
68,469
- - - - - -
Adjustments to reconcile net income to net cash provided by
operating activities:
- - - - - -
Depreciation and amortization
183,530
151,092
51,655
- - - - - -
Amortization of deferred compensation related to employee stock
option grants, net
2,959
4,826
833
- - - - - -
Liability for employee rights upon retirement
937
2,552
264
- - - - - -
Accrued interest and exchange and linkage differences on long-term
liabilities
7,160
(9,348)
2,015
- - - - - -
Deferred income taxes
(4,229)
(2,118)
(1,190)
- - - - - -
Capital loss on sale of fixed assets
964
- - - - - -
Changes in operating assets and liabilities:
- - - - - -
Increase in accounts receivable:
- - - - - -
Trade
(100,405)
(47,350)
(28,259)
- - - - - -
Other
(20,020)
(8,568)
(5,636)
- - - - - -
Decrease in accounts payable and accruals:
- - - - - -
Related parties
(1,663)
(763)
(468)
- - - - - -
Trade
(49,889)
126,468
(14,042)
- - - - - -
Other
(90,844)
(25,196)
(25,568)
- - - - - -
Increase in inventories
(77,880)
(3,935)
(21,920)
- - - - - -
Increase in asset retirement obligations
174
114
49
- - - - - -
Net cash provided by operating activities
93,100
384,587
26,202
- - - - - -
CASH FLOWS FROM INVESTING ACTIVITIES:
- - - - - -
Purchase of fixed assets
(116,352)
(140,462)
(32,748)
- - - - - -
Purchase of license
(700)
- - - - - -
Funds in respect of employee rights upon retirement
3,243
(2,319)
913
- - - - - -
Net cash used in investing activities
(113,109)
(143,481)
(31,835)
- - - - - -
CASH FLOWS FROM FINANCING ACTIVITIES:
- - - - - -
Proceeds from exercise of stock options granted to employees
3,706
42,892
1,043
- - - - - -
Dividend paid
(149,658)
(98,693)
(42,122)
- - - - - -
Repayment of capital lease
(1,789)
(2,250)
(504)
- - - - - -
Short term credit from banks, net
83,600
23,529
- - - - - -
Windfall tax benefit in respect of exercise of options granted to
employees
88
2,178
25
- - - - - -
Capital lease received
7,416
- - - - - -
Repayment of long term bank loans
(9,933)
(9,179)
(2,795)
- - - - - -
Treasury stock
(48,611)
(13,680)
- - - - - -
Net cash used in financing activities
(122,597)
(57,636)
(34,504)
- - - - - -
DECREASE IN CASH AND CASH EQUIVALENTS
(142,606)
183,470
(40,137)
- - - - - -
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
148,096
77,547
41,682
- - - - - -
CASH AND CASH EQUIVALENTS AT END OF YEAR
5,490
261,017
1,545
- - - - - -
At March 31, 2008, trade payables include NIS 149 million ($ 42 million)
(unaudited) in respect of acquisition of fixed assets.
At March 31, 2008, dividend payable of approximately NIS 156 million ($
44 million) (unaudited) is outstanding.
These balances are recognized in the cash flow statements upon payment.
At March 31, 2008, tax withholding related to dividend of approximately
NIS 19 million is outstanding. These balances are recognized in the cash
flow statements upon payment.
= = = = = = = = = = =
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
RECONCILIATION BETWEEN OPERATING CASH FLOWS AND EBITDA
- - - - - -
New Israeli shekels
Convenience translation into
U.S. dollars
- - - - - -
3 Month Period Ended
March 31
3 Month Period
Ended
March 31
- - - - - -
2008
2007
2008
- - - - - -
(Unaudited)
- - - - - -
In thousands
- - - - - -
Net cash provided by operating activities
93,100
384,587
26,202
- - - - - -
- - - - - -
Liability for employee rights upon retirement
(937)
(2,552)
(264)
- - - - - -
Accrued interest and exchange and linkage differences on long-term
liabilities
(7,160)
9,348
(2,015)
- - - - - -
Increase in accounts receivable:
- - - - - -
Trade
100,405
47,350
28,259
- - - - - -
Other
20,020
96,220
5,636
- - - - - -
Decrease (increase) in accounts payable and accruals:
- - - - - -
Trade
49,889
(126,468)
14,042
- - - - - -
Shareholder "“ current account
1,663
763
468
- - - - - -
Other (excluding tax provision)
184,964
25,196
52,058
- - - - - -
Increase in inventories
77,880
3,935
21,920
- - - - - -
Increase in Assets Retirement Obligation
(174)
(114)
49))
- - - - - -
Financial Expenses **
12,951
16,637
3,645
- - - - - -
- - - - - -
EBITDA
532,601
454,902
149,902
- - - - - -
- - - - - -
* The convenience translation of the New Israeli Shekel (NIS) figures
into US dollars was made at the exchange prevailing at March 31, 2008 :
US $1.00 equals 3.553 NIS.
** Financial expenses excluding any charge for the amortization of
pre-launch financial costs.