Partner Communications Company Ltd. ("Partner") (Nasdaq:PTNR)
(LSE:PCCD) (TASE:PTNR):
Q3 2007 Highlights (compared with Q3 2006)
-- Total revenues: NIS 1.6 billion (US$ 399 million), an increase
of 9.5%
-- Operating Profit: NIS 390 million (US$ 97 million), an
increase of 22.0%
-- Net Income: NIS 214 million (US$ 53 million), an increase of
15.9%
-- EBITDA(1): NIS 539 million (US$ 134 million), an increase of
13.2%
-- EBITDA Margin: 33.7% of total revenue compared with 32.6%
-- Subscriber Base: increase of 62,000 in the quarter, to reach
2.796 million, including 488,000 3G subscribers
-- Dividend Declared: NIS 200 million dividend for the third
quarter.
Partner Communications Company Ltd., a leading Israeli mobile
communications operator, today announced its results for the third
quarter of 2007. Partner reported Q3 2007 revenues of NIS 1.6 billion
(US$ 399 million), EBITDA of NIS 539 million (US$ 134 million), and
net income of NIS 214 million (US$ 53 million).
Commenting on the quarter´s results, Partner´s CEO, David Avner,
said: "I am very pleased with the third quarter´s results and with the
company´s financial and operational achievements. This quarter was a
very strong quarter for Partner, in which the Company recruited 62,000
new subscribers, 80% of them are post-paid subscribers. With an
increasing 3G customers´ base of 488,000 subscribers, and by leading
the 3.5G market in Israel, Partner continues to build a solid
foundation for future revenue growth. The positive customers´
experience in 3.5G networks pushes forward the data services demand
and usage."
Mr. Avner added: "I am also very proud that this quarter
orange(TM) was again re-elected the leading telecom brand in Israel
for the fifth consecutive year by Globes, the Israeli daily business
newspaper. The strength of our brand is a result of Partner´s focus on
our service organization which continues to excel and to meet our
customers´ needs."
Mr. Avner also said: "We are getting closer to the implementation
of number portability. Partner is prepared and ready to leverage the
assets it has built in the last ten years, including its superb
network, the best customer service in Israel, the strongest brand in
the telecom market and a wide range of handsets and content services,
in order to reach out to subscribers of other companies and to ensure
the continued satisfaction of Partner´s subscribers from the advanced
cellular services the company provides."
(1) See "Use of Non-GAAP Financial Measures" below.
Key Financial and Operational Parameters
-0-
*T
Q3´07 Q3´07
Q3 2006 Q2 2007 Q3 2007 vs vs
Q2´07 Q3´06
Revenues (NIS millions) 1,462.0 1,467.5 1,601.0 9.1% 9.5%
Operating Profit (NIS millions) 319.5 367.2 389.7 6.1% 22.0%
Net Income (NIS millions) 184.7 228.1 214.0 -6.2% 15.9%
Cash flow from operating
activities net of investing
activities (NIS millions) 312.3 234.3 135.3 -42.4% -56.7%
-------------------------------- ------- ------- ------- ------ ------
EBITDA (NIS millions) 476.7 519.3 539.3 3.9% 13.2%
Subscribers (thousands) 2,626 2,733 2,796 2.3% 6.5%
Estimated Market Share (%) 32 32 32 - -
Quarterly Churn Rate (%) 3.7 3.5 3.3 -0.2 -0.4
Average Monthly Usage per
Subscriber (minutes) 322 331 343 3.6% 6.5%
Average Monthly Revenue per
Subscriber (NIS) 164 157 165 5.1% 0.6%
-------------------------------- ------- ------- ------- ------ ------
*T
Financial Review
Partner´s total net revenues were NIS 1,601.0 million (US$ 399.0
million) in Q3 2007, an increase of 9.5% from NIS 1,462.0 million in
Q3 2006.
The increase is primarily a result of service revenues growth,
which increased by 6.4% from NIS 1,316.4 million in Q3 2006 to NIS
1,401.1 million (US$ 349.1 million) in Q3 2007. This reflects the
subscriber base growth, an improvement in the quality of the
subscriber base, and higher average minutes of use per subscriber. The
increase was partially offset by a decrease in average revenue per
minute resulting from competitive pressures and regulatory
intervention including the approximate 10% reduction in interconnect
tariffs which went into effect on March 1st 2007, as part of the
Ministry of Communications´ program of mandated gradual reductions
from 2005 to 2008, as well as the regulation restricting our ability
to charge for calls directed to voice mail which went into effect
January 1st 2007.
Content and data revenues (including SMS) in Q3 2007 increased by
33.0% from Q3 2006 to NIS 184.2 million, accounting for 13.1% of total
service revenues, compared with 10.5% of total service revenues in Q3
2006. Compared with Q3 2006, non-SMS data and content revenues
increased by 28% in Q3 2007.
Gross profit from services in Q3 2007 was NIS 593.5 million (US$
147.9 million), representing an increase of 13.7% from NIS 522.2
million in Q3 2006. The increase reflects the higher service revenues,
offset by a 1.7% increase in the cost of service revenues which is
primarily due to higher variable airtime and content costs.
In Q3 2007, equipment revenues totaled NIS 199.9 million (US$ 49.8
million), a 37.4% increase from 145.6 million in Q3 2006. The increase
is primarily attributed to the increase in the total number of sales
and the proportion of 3G handsets sold compared with 2G handsets.
Gross loss on equipment was NIS 66.0 million (US$ 16.5 million) in Q3
2007, compared with NIS 64.9 million in Q3 2006, a 1.8% increase.
Gross profit overall in Q3 2007 increased 15.3% to NIS 527.5
million (US$ 131.4 million) from NIS 457.4 million in Q3 2006.
Selling, marketing, general and administration expenses amounted
to NIS 137.8 million (US$ 34.3 million) in Q3 2007, no change from NIS
137.8 million in Q3 2006. Within the total, selling and marketing
expenses increased marginally by 2.6% and general and administrative
expenses decreased by 4.2%, reflecting the continuing efforts of the
Company to increase operating efficiency.
Overall, operating profit was NIS 389.7 million (US$ 97.1 million)
in Q3 2007, a 22.0% increase compared with NIS 319.5 million in Q3
2006.
Quarterly EBITDA in Q3 2007 totaled NIS 539.3 million (US$ 134.4
million) or 33.7% of total revenues, the equivalent of a 13.2%
increase, compared with NIS 476.7 million, or 32.6% of total revenues,
in Q3 2006.
Financial expenses in Q3 2007 were NIS 73.8 million (US$ 18.4
million), compared with NIS 44.7 million in Q3 2006, a 65.0% increase.
The increase is mainly attributed to higher linkage expenses due to
the increase of 2.5% in the CPI level of Q3 2007 compared to an
increase in the CPI level of 0.2% in Q3 2006.
Following the ruling of the Supreme Court, on November 20, 2006 on
the matter of Paz Gas Marketing Company Ltd. and others vs. the
assessing officer and others, which overturned the rules regarding the
recognition of financing expenses, the Company has accumulated a
provision for taxes in the amount of approximately NIS 55 million as
of September 30, 2007, including a provision of approximately NIS 12
million for Q3 2007. The accumulated provision is an estimate of the
additional tax expense relating to the possibility that part of the
financing expenses accrued in the years 2005 to 2007 in respect of a
financial debt, which is attributable, inter alia, to the financing of
a repurchase of Company shares, will not be recognized as an expense
for tax purposes. On October 28 and 29, 2007, the Israeli Supreme
Court issued two new rulings readdressing the same issue. The Company
is currently re-examining the requirement for this provision in the
light of these new rulings.
Net income for Q3 2007 totaled NIS 214.0 million (US$ 53.3
million), representing an increase of 15.9% from NIS 184.7 million in
Q3 2006.
Basic earnings per share or ADS, based on the average number of
shares outstanding during Q3 2007, was NIS 1.37 (34 US cents), up by
14.2% from NIS 1.20 in Q3 2006.
Funding and Investing Review
In Q3 2007, cash flows generated from operating activities, net of
cash flows from investing activities totaled NIS 135.3 million (US$
33.7 million), compared with NIS 312.3 million in Q3 2006, a decrease
of 56.7%. The decrease is explained by two main factors. Firstly,
because the final day of both Q3 2006 and Q2 2007 were non-working
days, payments to suppliers and interest charges were deferred to the
respective quarters that followed. Secondly, inventories were built up
during Q3 2007 for reasons related to number portability.
Net investment in fixed assets was NIS 96.7 million (US$ 24.1
million) in Q3 2007, a decrease of 29.0% from NIS 136.2 million in Q3
2006.
The Board has approved the distribution of a dividend for Q3 2007
of NIS 1.28 (US$ 0.32) per share (in total approximately NIS 200
million or US$ 50 million) to shareholders and ADS holders of record
on November 21st, 2007. The dividend will be paid on December 6th,
2007.
Operational Review
The Company´s active subscriber base at the end of the third
quarter 2007 was approximately 2,796,000, including approximately
679,000 business subscribers (24.3% of the base), 1,325,000 postpaid
private subscribers (47.4% of the base) and 792,000 prepaid
subscribers (28.3% of the base). Approximately 488,000 subscribers
were subscribed to the 3G network.
Total market share at the end of the quarter is estimated to be
32%. During the quarter, approximately 62,000 net new subscribers
joined the Company, including approximately 28,000 business
subscribers, approximately 23,000 postpaid private subscribers and
approximately 11,000 prepaid subscribers. The quarterly churn rate
decreased from 3.7% in Q3 2006 to 3.3% in Q3 2007. Most of the churn
comes from the prepaid segment.
Average minutes of use per subscriber ("MOU") was 343 minutes in
Q3 2007, compared with 322 minutes in Q3 2006. The average revenue per
user ("ARPU") in Q3 2007 totaled NIS 165 (US$ 41), marginally highly
than NIS 164 in Q3 2006.
Outlook and Guidance
Commenting on the Company´s results, Mr. Emanuel Avner, Partner´s
Chief Financial Officer said: "We are delighted with the results of
the third quarter 2007. Our efforts to increase revenue potential and
improve efficiency are beginning to show through the key financial and
performance indicators. This has enabled us to increase the amount of
dividends distributed to NIS 200 million for this quarter and we
continue to offer a strong dividend yield for the Company´s
shareholders."
Commenting on the Company´s outlook, Mr. Emanuel Avner said: "We
continue to have confidence in our annual guidance for 2007, bearing
in mind that the fourth quarter is seasonally slower than the third
quarter and that the introduction of number portability is expected to
increase marketing expenses over the quarter."
Conference Call Details
Partner Communications will hold a conference call to discuss the
company´s third quarter results on Wednesday, October 31st, 2007, at
16:00 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 November 7th, 2007.
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 orange(TM) brand.
The Company provides quality service and a range of features to 2.796
million subscribers in Israel (as of September 30, 2007). Partner´s
ADSs are quoted on the NASDAQ Global Select Market(TM) and the London
Stock Exchange. Its shares are also traded on the Tel Aviv Stock
Exchange (NASDAQ and TASE: PTNR; LSE: PCCD).
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 2007), 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 12, 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 September 30th, 2007: US $1.00 equals NIS 4.013. 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 in order to
improve the understanding of the Company´s operating results and to
provide further perspective on these results. Our management uses
EBITDA as a basis for measuring our core operating performance and
comparing such performance to that of prior periods and to the
performance of our competitors. EBITDA, however, should not be
considered as an alternative to operating income or net income for the
year as an indicator of the operating performance of the Company.
Similarly, EBITDA should not be considered as an alternative to cash
flows 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
the historic operating results of the Company; 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)
CONDENSED CONSOLIDATED BALANCE SHEETS
-0-
*T
Convenience
translation into
New Israeli shekels U.S. dollars
--------------------- ---------------------
September December September December
30, 31, 30, 31,
2007 2006 2007 2006
----------- --------- ----------- ---------
(Unaudited) (Audited) (Unaudited) (Audited)
----------- --------- ----------- ---------
In thousands
-------------------------------------------
Assets
CURRENT ASSETS:
Cash and cash
equivalents 37,460 77,547 9,335 19,324
Accounts receivable:
Trade 1,090,016 964,309 271,621 240,296
Other 97,469 65,533 24,289 16,330
Inventories 178,432 126,466 44,463 31,514
Deferred income taxes 44,422 40,495 11,070 10,091
----------- --------- ----------- ---------
Total current assets 1,447,799 1,274,350 360,778 317,555
----------- --------- ----------- ---------
INVESTMENTS AND LONG-TERM
RECEIVABLES:
Accounts receivables -
trade 350,706 274,608 87,392 68,429
Funds in respect of
employee rights upon
retirement 85,792 80,881 21,379 20,155
----------- --------- ----------- ---------
436,498 355,489 108,771 88,584
----------- --------- ----------- ---------
FIXED ASSETS, net of
accumulated depreciation
and amortization 1,667,105 1,747,459 415,426 435,450
----------- --------- ----------- ---------
LICENSE, DEFERRED CHARGES
AND INTANGIBLE ASSETS,
net of amortization 1,177,117 1,247,084 293,326 310,761
----------- --------- ----------- ---------
DEFERRED INCOME TAXES 95,623 76,139 23,828 18,973
----------- --------- ----------- ---------
4,824,142 4,700,521 1,202,129 1,171,323
=========== ========= =========== =========
*T
-0-
*T
Convenience
translation into
New Israeli shekels U.S. dollars
----------------------- ---------------------
September December September December
30, 31, 30, 31,
2007 2006 2007 2006
----------- ----------- ----------- ---------
(Unaudited) (Audited) (Unaudited) (Audited)
----------- ----------- ----------- ---------
In thousands
---------------------------------------------
Liabilities and
shareholders´ equity
CURRENT LIABILITIES:
Current maturities of
long-term liabilities 37,899 40,184 9,444 10,013
Accounts payable and
accruals:
Trade 709,437 690,424 176,785 172,047
Other 326,255 281,403 81,299 70,122
Related party -
trade 1,664 15,830 415 3,945
----------- ----------- ----------- ---------
Total current
liabilities 1,075,255 1,027,841 267,943 256,127
----------- ----------- ----------- ---------
LONG-TERM LIABILITIES:
Bank loans, net of
current maturities 272,508 67,906
Notes payable 2,072,636 2,016,378 516,480 502,462
Liability for employee
rights upon
retirement 126,953 113,380 31,636 28,253
Other liabilities 15,922 15,947 3,968 3,974
----------- ----------- ----------- ---------
Total long-term
liabilities 2,215,511 2,418,213 552,084 602,595
----------- ----------- ----------- ---------
Total
liabilities 3,290,766 3,446,054 820,027 858,722
----------- ----------- ----------- ---------
SHAREHOLDERS´ EQUITY:
Share capital -
ordinary shares of
NIS 0.01 par value:
authorized - December
31, 2006 and
September 30, 2007 -
235,000,000 shares;
issued and
outstanding -
December 31, 2006
154,516,217 shares
and September 30,
2007 156,724,677
shares 1,567 1,545 391 385
Capital surplus 2,523,649 2,452,682 628,868 611,184
Accumulated deficit (991,840) (1,199,760) (247,157) (298,968)
----------- ----------- ----------- ---------
Total
shareholders´
equity 1,533,376 1,254,467 382,102 312,601
----------- ----------- ----------- ---------
4,824,142 4,700,521 1,202,129 1,171,323
=========== =========== =========== =========
*T
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-0-
*T
New Israeli shekels
------------------------------------------------
9 month 3 month
period ended period ended
September 30, September 30,
----------------------- ------------------------
2007 2006 2007 2006
----------- ----------- ----------- ------------
(Unaudited)
------------------------------------------------
In thousands (except per share data)
------------------------------------------------
REVENUES - net:
Services 3,966,982 3,745,120 1,401,057 1,316,420
Equipment 519,293 416,458 199,945 145,569
----------- ----------- ----------- ------------
4,486,275 4,161,578 1,601,002 1,461,989
----------- ----------- ----------- ------------
COST OF REVENUES:
Services 2,315,363 2,311,409 807,540 794,191
Equipment 695,479 587,319 265,967 210,446
----------- ----------- ----------- ------------
3,010,842 2,898,728 1,073,507 1,004,637
----------- ----------- ----------- ------------
GROSS PROFIT 1,475,433 1,262,850 527,495 457,352
SELLING AND MARKETING
EXPENSES 259,801 216,953 86,315 84,124
GENERAL AND
ADMINISTRATIVE
EXPENSES 157,612 141,362 51,483 53,717
----------- ----------- ----------- ------------
417,413 358,315 137,798 137,841
----------- ----------- ----------- ------------
OPERATING PROFIT 1,058,020 904,535 389,697 319,511
FINANCIAL EXPENSES -
net 132,846 144,515 73,768 44,710
----------- ----------- ----------- ------------
INCOME BEFORE TAXES ON
INCOME 925,174 760,020 315,929 274,801
TAXES ON INCOME 287,243 241,725 101,974 90,148
----------- ----------- ----------- ------------
INCOME BEFORE
CUMULATIVE EFFECT OF
A CHANGE IN
ACCOUNTING PRINCIPLES 637,931 518,295 213,955 184,653
CUMULATIVE EFFECT, AT
BEGINNING OF YEAR, OF
A CHANGE IN
ACCOUNTING PRINCIPLES 1,012
----------- ----------- ----------- ------------
NET INCOME FOR THE
PERIOD 637,931 519,307 213,955 184,653
=========== =========== =========== ============
EARNINGS PER SHARE
("EPS") :
Basic:
Before
cumulative
effect 4.08 3.38 1.37 1.20
Cumulative
effect 0.01
----------- ----------- ----------- ------------
4.08 3.39 1.37 1.20
=========== =========== =========== ============
Diluted:
Before
cumulative
effect 4.05 3.36 1.36 1.19
Cumulative
effect 0.01
----------- ----------- ----------- ------------
4.05 3.37 1.36 1.19
=========== =========== =========== ============
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING:
Basic 156,213,495 153,391,479 156,683,913 153,916,260
=========== =========== =========== ============
Diluted 157,579,035 154,266,141 157,883,303 154,740,926
=========== =========== =========== ============
Convenience translation
into U.S. dollars
-----------------------
9 month 3 month
period period
ended ended
September September
30, 30,
2007 2007
----------- -----------
(Unaudited)
-------------------------
In thousands (except per
share data)
-------------------------
REVENUES - net:
Services 988,532 349,130
Equipment 129,403 49,824
----------- -----------
1,117,935 398,954
----------- -----------
COST OF REVENUES:
Services 576,965 201,232
Equipment 173,307 66,276
----------- -----------
750,272 267,508
----------- -----------
GROSS PROFIT 367,663 131,446
SELLING AND MARKETING EXPENSES 64,740 21,509
GENERAL AND ADMINISTRATIVE EXPENSES 39,275 12,829
----------- -----------
104,015 34,338
----------- -----------
OPERATING PROFIT 263,648 97,108
FINANCIAL EXPENSES - net 33,104 18,382
----------- -----------
INCOME BEFORE TAXES ON INCOME 230,544 78,726
TAXES ON INCOME 71,578 25,411
----------- -----------
INCOME BEFORE CUMULATIVE EFFECT OF A CHANGE
IN ACCOUNTING PRINCIPLES 158,966 53,315
CUMULATIVE EFFECT, AT BEGINNING OF YEAR, OF A
CHANGE IN ACCOUNTING PRINCIPLES
----------- -----------
NET INCOME FOR THE PERIOD 158,966 53,315
=========== ===========
EARNINGS PER SHARE
("EPS") :
Basic:
Before cumulative effect 1.02 0.34
Cumulative effect
----------- -----------
1.02 0.34
=========== ===========
Diluted:
Before cumulative effect 1.01 0.34
Cumulative effect
----------- -----------
1.01 0.34
=========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING:
Basic 156,213,495 156,683,913
=========== ===========
Diluted 157,579,035 157,883,303
=========== ===========
*T
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-0-
*T
Convenience
translation into
New Israeli shekels U.S. dollars
------------------- --------------------
9 month period 9 month period
ended September 30, ended September 30,
-------------------
2007 2006 2007
--------- --------- --------------------
(Unaudited)
----------------------------------------
In thousands
----------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income for the period 637,931 519,307 158,966
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 449,643 475,173 112,047
Amortization of deferred
compensation related to
employee stock option
grants, net 13,179 17,378 3,284
Liability for employee
rights upon retirement 13,573 8,242 3,382
Accrued interest and
exchange and linkage
differences on long-term
liabilities 60,147 34,124 14,988
Deferred income taxes (23,411) 31,096 (5,834)
Income tax benefit in
respect of exercise of
option granted to
employees
Capital loss on sale of
fixed assets 1,146 318 286
Cumulative effect, at
beginning of year, of
a change in accounting
principles (1,012)
Changes in operating assets
and liabilities:
Increase in accounts
receivable:
Trade (201,805) (223,248) (50,288)
Other (32,957) (24,370) (8,213)
Increase (decrease) in
accounts payable and
accruals:
Related
Parties (14,166) 8,890 (3,530)
Trade 106,944 65,105 26,650
Other 44,795 (14,428) 11,162
Decrease (increase) in
inventories (51,966) 53,425 (12,949)
Increase (decrease) in
asset retirement
obligations 352 895 88
--------- --------- --------------------
Net cash provided by
operating activities 1,003,405 950,895 250,039
--------- --------- --------------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of fixed assets (387,177) (218,970) (96,481)
Acquisition of optic fibers
activity (701) (71,125) (175)
Purchase of additional
spectrum (46,480)
Proceeds from sale of fixed
assets 43 34 11
Funds in respect of
employee rights upon
retirement (4,911) (3,150) (1,224)
--------- --------- --------------------
Net cash used in investing
activities (392,746) (339,691) (97,869)
--------- --------- --------------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Financial lease undertaken 7,416 1,848
Repayment of capital lease (6,713) (3,620) (1,673)
Proceeds from exercise of
stock options granted to
employees 57,810 30,995 14,406
Dividend Paid (429,955) (277,808) (107,141)
Windfall tax benefit in
respect of exercise of
options granted to
employees 1,021 254
Repayment of long term bank
loans (280,325) (360,658) (69,854)
--------- --------- --------------------
Net cash used in financing
activities (650,746) (611,091) (162,160)
--------- --------- --------------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (40,087) 113 (9,990)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 77,547 4,008 19,324
--------- --------- --------------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD 37,460 4,121 9,334
========= ========= ====================
*T
Supplementary information on investing not involving cash flows
At September 30, 2007 and 2006, trade payables include NIS 114
million ($ 30 million) (unaudited) and NIS 202 million (unaudited) in
respect of acquisition of fixed assets, respectively.
These balances will be given recognition in these statements upon
payment.
-0-
*T
Convenience
New Israeli shekels translation into
U.S. dollars
------------------- --------------------
9 Month Period 9 Month Period
Ended Ended September 30,
September 30,
------------------- --------------------
2007 2006 2007
--------- --------- --------------------
(Unaudited)
----------------------------------------
In thousands
----------------------------------------
Net cash provided by
operating activities 1,003,405 950,895 250,039
Liability for employee rights
upon retirement (13,573) (8,242) (3,382)
Accrued interest and exchange
and linkage differences on
long-term liabilities (60,147) (34,124) (14,988)
Increase in accounts
receivable:
Trade 201,805 223,248 50,288
Other (excluding tax
provision) 343,611 234,999 85,624
Decrease (increase) in
accounts payable and
accruals:
Trade (106,944) (65,105) (26,650)
Related party - trade 14,166 (8,890) 3,530
Other (44,795) 14,428 (11,162)
Increase (decrease) in
inventories 51,966 (53,425) 12,949
Increase in Assets Retirement
Obligation (352) (895) (88)
Financial Expenses 124,219 135,558 30,954
--------- --------- --------------------
EBITDA 1,513,361 1,388,447 377,114
--------- --------- --------------------
*T
The convenience translation of the New Israeli Shekel (NIS)
figures into US dollars was made at the exchange prevailing at
September 30, 2007: US $1.00 equals 4.013 NIS.
Financial expenses excluding any charge for the amortization of
pre-launch financial costs.
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
SUMMARY OPERATING DATA
-0-
*T
Q3 Q2 Q3
2006 2007 2007
---------------------------------------------------- ----- ----- -----
Subscribers (in thousands) 2,626 2,733 2,796
---------------------------------------------------- ----- ----- -----
Estimated share of total Israeli mobile telephone
subscribers 32% 32% 32%
---------------------------------------------------- ----- ----- -----
Churn rate in quarter 3.7% 3.5% 3.3%
---------------------------------------------------- ----- ----- -----
Average monthly usage in quarter per subscriber
(actual minutes use) 322 331 343
---------------------------------------------------- ----- ----- -----
Average monthly revenue in year per subscriber,
including in-roaming revenue (NIS) 164 157 165
---------------------------------------------------- ----- ----- -----
*T
