Partner Communications Reports Third Quarter 2020 Results[1]
Partner Communications (NASDAQ: PTNR) reported Q3 2020 results with total revenues of NIS 800 million (US$ 232 million), down 3% from Q3 2019. Service revenues decreased by 4% to NIS 631 million (US$ 183 million), impacted by reduced international roaming due to COVID-19. Adjusted EBITDA fell 9% to NIS 204 million (US$ 59 million), and the company posted a loss of NIS 5 million (US$ 1 million). Despite challenges, the company added 54,000 cellular subscribers, reaching approximately 2.76 million. Net debt decreased significantly to NIS 646 million (US$ 188 million), reflecting improved financial stability.
- Increased cellular subscriber base by 54,000, totaling 2.76 million.
- Net debt reduced by NIS 310 million to NIS 646 million.
- Adjusted free cash flow up 62% to NIS 21 million.
- Successful launch of 5G network and compliance with coverage goals for government grants.
- Total revenues dropped by 3% and service revenues down 4% year-over-year.
- Significant decline in average revenue per user (ARPU) by 14% to NIS 51.
- Loss of NIS 5 million compared to profit of NIS 7 million in Q3 2019.
ROSH HA'AYIN, Israel, Nov. 25, 2020 /PRNewswire/ -- Third quarter 2020 highlights (compared with third quarter 2019)
- Total Revenues: NIS 800 million (US
$ 232 million ), a decrease of3% - Service Revenues: NIS 631 million (US
$ 183 million ), a decrease of4% - Equipment Revenues: NIS 169 million (US
$ 49 million ), an increase of1% - Total Operating Expenses (OPEX)2: NIS 475 million (US
$ 138 million ), approx. unchanged - Adjusted EBITDA2: NIS 204 million (US
$ 59 million ), a decrease of9% - Adjusted EBITDA Margin2:
26% of total revenues compared with27% - Loss for the Period: NIS 5 million (US
$ 1 million ), a decrease in profit of NIS 12 million - Net Debt: NIS 646 million (US
$ 188 million ), a decrease of NIS 310 million - Adjusted Free Cash Flow (before interest)2: NIS 21 million (US
$ 6 million ), an increase of NIS 8 million - Cellular ARPU: NIS 51 (US
$ 15) , a decrease of 14% - Cellular Subscriber Base: approximately 2.76 million at quarter-end, an increase of
4% - TV Subscriber Base: 224 thousand subscribers at quarter-end, an increase of 48 thousand subscribers since Q3 2019, and an increase of 9 thousand in the quarter
Partner Communications Company Ltd. ("Partner" or the "Company") (NASDAQ: PTNR) (TASE: PTNR), a leading Israeli communications provider, announced today its results for the quarter ended September 30, 2020.
Commenting on the results for the third quarter 2020, Mr. Isaac Benbenisti, CEO of Partner noted:
"Despite the effects of the coronavirus crisis, Partner's results exhibit stability and resilience in the third quarter due to the consistent growth in the fixed-line segment, which contributes to a revenue mix that establishes long-term financial strength.
In the cellular segment, we added 54,000 subscribers, net, in the third quarter, and continued to strengthen customer loyalty. Since the beginning of the year we have added 105,000 subscribers, net, to Partner's cellular services.
In addition, we launched the 5G network and met the coverage goals that entitle us to a grant of tens of millions of shekels that is expected to be received from the Ministry of Communications.
The coronavirus crisis has heightened the awareness of the importance of quality communication services, with an emphasis on stable and fast internet services. In recent months, there has been a significant increase in demand for the Partner Fiber service that provides an ultra-fast internet service over Partner's independent fiber optic network, which already reaches approximately 700 thousand households in 50 cities across the country.
Partner's TV service has approximately 229 thousand subscribers as of today, an addition of over 40 thousand subscribers since the beginning of the year. Most of our TV subscribers subscribe to packages offering a combination of services, thus strengthening Partner's standing as a communications group which offers a variety of communications services among the most advanced in Israel."
Mr. Tamir Amar, Partner's Chief Financial Officer, commented on the results:
"As expected, the continuation of the significant decline in international travel into the third quarter resulted in a material negative impact on the Company's results of operations for the quarter, compared with the Company's normal seasonal trends. And whilst the Company succeeded in substantially mitigating the aforementioned effects through proactive cost cutting measures in a number of areas and also through making adjustments in a variety of business areas, including capitalizing on the increase in demand for some of the Company's services as a result of the crisis and shifting our focus towards alternative sales channels, the overall net impact remained materially negative.
Our cellular subscriber base increased by 54 thousand subscribers, net, during the quarter, including an increase of 33 thousand Post-Paid subscribers, in conjunction with a further decrease in the quarterly churn rate to
Adjusted EBITDA this quarter totaled NIS 204 million, compared with NIS 200 million in the previous quarter, the increase reflecting, among other factors, an increase in service revenues and in gross profit from equipment sales, which were partially offset by the larger reduction of expenses in the second quarter.
Looking ahead, the Company expects that for the fourth quarter of 2020, the near-complete cessation of international travel will continue to have a negative impact, although smaller in scale than in the third quarter, and, in addition, the Company will continue to take proactive cost cutting measures in a number of areas, such that the overall net impact in the fourth quarter is not expected to be material.
Adjusted Free Cash Flow (before interest) totaled NIS 21 million in the third quarter. CAPEX totaled NIS 147 million, with investments also this quarter reflecting the Company's continued efforts to expand the deployment of its fiber optic network and to further penetrate the TV market. These investments continue to be possible as a result of Partner's financial stability and strong balance sheet, and are continuing through the challenging period of the coronavirus crisis.
Net debt stood at NIS 646 million at the end of the third quarter, compared with NIS 956 million at the end of the third quarter 2019, a decrease of NIS 310 million mainly due to the Company's successful equity raise of NIS 276 million, net, in January 2020.
During the third quarter, the Company completed the partial early repayment of its Notes Series F in a total amount of NIS 305 million, which led to one-time expenses of approximately NIS 7 million being recorded under the Company's finance costs, net. In addition, in the third quarter the Company expanded its Notes Series G in a total amount of NIS 300 million. These measures lengthened the duration of the Company's debt.
During the third quarter, we participated in the Ministry of Communications' tender for 5G frequencies and secured the frequencies anticipated, at a price which reflects the lowest cost of all contenders. In addition, in view of the Company's compliance with the qualifying conditions for 5G, the Company, as a partner in the shared cellular radio access network, PHI, is expected to share with another communications group the highest grant among all the communications groups that competed in the tender. In addition, the Company is expected to benefit from a significant discount with respect to the frequency fees, provided that certain conditions are met in accordance with the terms of the tender.
Following enquiries received from a number of potential investors, the Company announced that it is considering the possibility to solicit offers from a potential partner or partners to acquire up to
Q3 2020 compared with Q2 2020
NIS Million | Q2'20 | Q3'20 | Comments |
Service Revenues | 616 | 631 | The increase resulted from increases both in cellular |
Equipment Revenues | 158 | 169 | The increase mainly reflected higher sale volumes due to |
Total Revenues | 774 | 800 | |
Gross profit from equipment sales | 30 | 38 | |
OPEX | 456 | 475 | The increase mainly reflected the larger reduction of |
Adjusted EBITDA | 200 | 204 | |
Profit (Loss) for the Period | 7 | (5) | |
Capital Expenditures (additions) | 121 | 179 | |
Adjusted Free Cash Flow (before | 44 | 21 | The decrease resulted mainly from an increase in cash |
Net Debt | 658 | 646 |
Q2'20 | Q3'20 | Comments | |
Cellular Subscribers (end of | 2,708 | 2,762 | Increase of approx. 33 thousand Post-Paid subscribers and |
Monthly Average Revenue per | 51 | 51 | |
Quarterly Cellular Churn Rate (%) | |||
TV Subscribers (end of period, | 215 | 224 |
Key Financial Results
NIS MILLION (except EPS) | Q3'19 | Q3'20 | % Change |
Revenues | 825 | 800 | - |
Cost of revenues | 687 | 677 | - |
Gross profit | 138 | 123 | - |
Operating profit | 26 | 20 | - |
Profit (Loss) for the period | 7 | (5) | |
Earnings (Losses) per share (basic, NIS) | 0.04 | (0.03) | |
Adjusted Free Cash Flow (before interest) | 13 | 21 | + |
Key Operating Indicators
Q3'19 | Q3'20 | Change | |
Adjusted EBITDA (NIS million) | 225 | 204 | - |
Adjusted EBITDA margin (as a % of total revenues) | -1 | ||
Cellular Subscribers (end of period, thousands) | 2,651 | 2,762 | +111 |
Quarterly Cellular Churn Rate (%) | -0.4 | ||
Monthly Average Revenue per Cellular User (ARPU) (NIS) | 59 | 51 | -8 |
Partner Consolidated Results
Cellular Segment | Fixed-Line Segment | Elimination | Consolidated | ||||||||
NIS Million | Q3'19 | Q3'20 | Change % | Q3'19 | Q3'20 | Change % | Q3'19 | Q3'20 | Q3'19 | Q3'20 | Change % |
Total Revenues | 608 | 549 | - | 258 | 287 | + | (41) | (36) | 825 | 800 | - |
Service Revenues | 466 | 415 | - | 233 | 252 | + | (41) | (36) | 658 | 631 | - |
Equipment Revenues | 142 | 134 | - | 25 | 35 | + | - | - | 167 | 169 | + |
Operating Profit | 24 | 20 | - | 2 | 0 | - | - | 26 | 20 | - | |
Adjusted EBITDA | 170 | 134 | - | 55 | 70 | + | - | - | 225 | 204 | - |
Financial Review
In Q3 2020, total revenues were NIS 800 million (US
Service revenues in Q3 2020 totaled NIS 631 million (US
Service revenues for the cellular segment in Q3 2020 totaled NIS 415 million (US
Service revenues for the fixed-line segment in Q3 2020 totaled NIS 252 million (US
Equipment revenues in Q3 2020 totaled NIS 169 million (US
Gross profit from equipment sales in Q3 2020 was NIS 38 million (US
Total operating expenses ('OPEX') totaled NIS 475 million (US
Operating profit for Q3 2020 was NIS 20 million (US
Adjusted EBITDA in Q3 2020 totaled NIS 204 million (US
Adjusted EBITDA for the cellular segment was NIS 134 million (US
Adjusted EBITDA for the fixed-line segment was NIS 70 million (US
Finance costs, net in Q3 2020 were NIS 24 million (US
Income tax expenses for Q3 2020 were NIS 1 million (US
Loss in Q3 2020 was NIS 5 million (US
Based on the weighted average number of shares outstanding during Q3 2020, basic losses per share or ADS, was NIS 0.03 (US
Cellular Segment Operational Review
At the end of Q3 2020, the Company's cellular subscriber base (including mobile data, 012 Mobile subscribers and M2M subscriptions included on an adjusted basis as described in the Company's annual report) was approximately 2.76 million, including approximately 2.44 million Post-Paid subscribers or
During the third quarter of 2020, the cellular subscriber base increased net by approximately 54 thousand. The Post-Paid subscriber base increased by approximately 33 thousand, and the Pre-Paid subscriber base increased by approximately 21 thousand.
Total cellular market share (based on the number of subscribers) at the end of Q3 2020 was estimated to be approximately
The quarterly churn rate for cellular subscribers in Q3 2020 was
The monthly Average Revenue per User ("ARPU") for cellular subscribers in Q3 2020 was NIS 51 (US
Funding and Investing Review
In Q3 2020, Adjusted Free Cash Flow (including lease payments) totaled NIS 21 million (US
Cash generated from operating activities totaled NIS 207 million (US
Lease payments (principal and interest), recorded in cash flows from financing activities under IFRS 16, totaled NIS 39 million (US
Cash capital expenditures ('CAPEX payments'), as represented by cash flows used for the acquisition of property and equipment and intangible assets, were NIS 147 million (US
Following the receipt of the new 5G frequencies in the third quarter, the cost of the new frequencies was recognized as capital expenditures in intangible assets, to be paid in September 2022 according to the terms of the frequencies tender.
The level of Net Debt at the end of Q3 2020 amounted to NIS 646 million (US
Regulatory Developments
Holdings of approved Israeli shareholders in the Company
The provisions of the Company's cellular license require, among others, that the "founding shareholders or their approved substitutes", as defined in the cellular license, hold at least
On November 12, 2019, the Israeli Ministry of Communications ("MoC") issued a temporary order (ending on November 1, 2020) amending the Company's cellular license and reducing the percentage that the approved Israeli Shareholders are required to hold by the amount of shares now held by the foreign entities (from
On October 26, 2020, the MoC extended the term of the abovementioned order (ending on March 1, 2021). This temporary order is expected to allow the MoC and the Company sufficient time in which to resolve the issue of holdings of approved Israeli shareholders in the Company.
Upgrade of Bezeq's infrastructure to VDSL35b Technology
On July 12, 2020, Bezeq reported that the MoC has allowed it make use of VDSL35b Technology, According to Bezeq's report, this technology will allow it to substantially improve internet connection speeds and will allow it to market connections of up to 200 Mbps. Bezeq's report states that the rollout of this new technology is expected to be limited to approximately 230,000 subscribers. According to the MoC's approval, the relevant retail offering may be launched four months after the update to the existing interface with wholesale providers is published by Bezeq. In accordance with the MoC's approval, Bezeq has informed the Company that it launched the VDSL35b Technology. The Launch of this service will allow Bezeq to better respond to FTTH (Fiber to the Home) services offered by the Company, but would also allow the Company to improve the speed of the wholesale infrastructure services it offers, thus improving its TV services.
Hearing regarding a reform in the structure of the Internet Market
The fixed internet access market in Israel was historically divided into two tiers of services: infrastructure services and ISP (internet service provider) service. This split was intended to allow entry of new competitors, which provide services over Bezeq's infrastructure.
On October 4, 2020, the MoC published a hearing regarding a reform in the structure of the Internet Market. The hearing is aimed at ending the split of this segment into two tiers and allowing Bezeq and Hot Telecom to market a unified product (comprised of both infrastructure and ISP components). This proposed reform will not apply to the business sector. According to the hearing document, the proposed reform will enter into force on January 1, 2022 allowing ISPs to prepare for the change in the structure of this market. The Company has filed its position regarding this hearing. The Company agrees with the consumer need for a unified service but has argued that Bezeq and HOT should not be allowed to market this service themselves, but rather through their subsidiaries (which would purchase the infrastructure component at the same prices and terms as all other competitors).
Maximum tariff for wholesale access to BSA service over Bezeq's fiber optic network
Further to the description in the Company's annual report for 2018 regarding policy principles for the deployment of fiber-optic infrastructure in Israel and the public hearing description in the Company's Q2 2019 report, on August 25, 2020 the MoC published its decision regarding the maximum tariff that Bezeq will be allowed to charge for access to the BSA (Bitstream Access) service over Bezeq's fiber optic network. The maximum tariffs have been set as follows - for a line with a speed of up to 550 Mbps the maximum tariff will be NIS 71 per month (excluding VAT) and for a line with a speed of up to 1,100 Mbps the maximum tariff will be NIS 79 per month (excluding VAT). These tariffs shall not include installation fees. These tariffs mark a decrease from the initial tariffs proposed by the MoC in its hearing on this matter (71 NIS for a speed of up to 400 Mbps, and 85 NIS for a speed of up to 1,100 Mbps), however, the proposed tariffs were meant to include installation costs.
Business Developments
On November 9, 2020, Hermetic Trust (1975) Ltd., which serves as a trustee, among others, of the holders of the (Series F) debentures and the (Series G) debentures issued by the Company, informed the Company that the scope of its professional liability insurance coverage totals an amount of NIS 10 million. This notice was given in accordance with the provisions of the Series F and Series G trust deeds, according to which the trustee must update the Company should the insurance amount be reduced below the amount of US
Conference Call Details
Partner will hold a conference call on Wednesday, November 25, 2020 at 10.00AM Eastern Time / 5.00PM Israel Time.
To join the call, please dial the following numbers (at least 10 minutes before the scheduled time):
International: +972.3.918.0609
North America toll-free: +1.866.860.9642
A live webcast of the call will also be available on Partner's Investors Relations website at: www.partner.co.il/en/Investors-Relations/lobby/
If you are unavailable to join live, the replay of the call will be available from November 25, 2020 until December 9, 2020, at the following numbers:
International: +972.3.925.5925
North America toll-free: +1.888.326.9310
In addition, the archived webcast of the call will be available on Partner's Investor Relations website at the above address for approximately three months.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, as amended, Section 21E of the US Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Words such as "estimate", "believe", "anticipate", "expect", "intend", "seek", "will", "plan", "could", "may", "project", "goal", "target" and similar expressions often identify forward-looking statements but are not the only way we identify these statements. In particular, this press release communicates our expectation regarding the impact of the continued cessation of international travel on the Company's results of operations for the fourth quarter of 2020 and with respect to the grant amount and/or discounts that the Company will receive due to the frequency tender. In addition, all statements other than statements of historical fact included in this press release regarding our future performance are forward-looking statements. We have based these forward-looking statements on our current knowledge and our present beliefs and expectations regarding possible future events. These forward-looking statements are subject to risks, uncertainties and assumptions, including in particular the grant amount and/or discounts due to the frequency tender and the severity and duration of the impact on our business of the current health crisis, and on the effectiveness of the proactive measures the Company has taken to cut costs. We have also assumed that we will continue to be able to take proactive cost-cutting measures. In light of the current unreliability of predictions as to the ultimate severity and duration of the health crisis, future results may differ materially from those currently anticipated. For further information regarding risks, uncertainties and assumptions about Partner, trends in the Israeli telecommunications industry in general, the impact of current global economic conditions and possible regulatory and legal developments, and other risks we face, see "Item 3. Key Information - 3D. Risk Factors", "Item 4. Information on the Company", "Item 5. Operating and Financial Review and Prospects", "Item 8. Financial Information - 8A. Consolidated Financial Statements and Other Financial Information - 8A.1 Legal and Administrative Proceedings" and "Item 11. Quantitative and Qualitative Disclosures about Market Risk" in the Company's Annual Reports on Form 20-F filed with the SEC, as well as its immediate reports on Form 6-K furnished to the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The quarterly financial results presented in this press release are unaudited financial results. The results were prepared in accordance with IFRS, other than the non-GAAP financial measures presented in the section, "Use of Non-GAAP Financial Measures". The preparation of interim condensed consolidated financial statements in conformity with IFRS requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Management based such estimates on historical experience, information available at the time, and assumptions believed to be reasonable under the circumstances and at such time, including the impact of extraordinary events such as the novel coronavirus ("COVID-19"). Actual results could differ from those estimates.
The financial information is presented in NIS millions (unless otherwise stated) and the figures presented are rounded accordingly. The convenience translations of the New Israeli Shekel (NIS) figures into US Dollars were made at the rate of exchange prevailing at September 30, 2020: US
Use of Non-GAAP Financial Measures
The following non-GAAP measures are used in this report. These measures are not financial measures under IFRS and may not be comparable to other similarly titled measures for other companies. Further, the measures may not be indicative of the Company's historic operating results nor are meant to be predictive of potential future results.
Non-GAAP Measure | Calculation | Most Comparable IFRS |
Adjusted EBITDA
| Profit (Loss) add Income tax expenses, Finance costs, net, Depreciation and amortization expenses (including Other expenses (mainly amortization of share based
Adjusted EBITDA divided by Total revenues | Profit (Loss) |
Adjusted EBITDA | ||
Adjusted Free | Net cash provided by operating activities add Net cash used in investing activities deduct Proceeds from (investment in) short-term deposits, net deduct Lease principal payments deduct Lease interest payments | Net cash provided by add Net cash used in investing |
Total Operating | 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 | Sum of: Cost of service revenues, Selling and marketing General and administrative |
Net Debt | Current maturities of notes payable and borrowings add Notes payable add Borrowings from banks add Advances on account of notes payables add Financial liability at fair value deduct Cash and cash equivalents deduct Short-term deposits | Sum of: Current maturities of notes Notes payable, Borrowings from banks, Advances Financial liability at fair value Less Sum of: Cash and cash equivalents, Short-term deposits |
About Partner Communications
Partner Communications Company Ltd. is a leading Israeli provider of telecommunications services (cellular, fixed-line telephony, internet services and TV services). Partner's ADSs are quoted on the NASDAQ Global Select Market™ and its shares are traded on the Tel Aviv Stock Exchange (NASDAQ and TASE: PTNR).
For more information about Partner, see: http://www.partner.co.il/en/Investors-Relations/lobby
Contacts:
Tamir Amar Chief Financial Officer Tel: +972-54-781-4951
| Amir Adar Head of Investor Relations and Corporate Projects Tel: +972-54-781-5051 E-mail: investors@partner.co.il |
PARTNER COMMUNICATIONS COMPANY LTD. | ||||
(An Israeli Corporation) | ||||
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||
New Israeli Shekels | Convenience | |||
December 31, | September 30, | September 30, | ||
2019 | 2020 | 2020 | ||
(Audited) | (Unaudited) | (Unaudited) | ||
In millions | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 299 | 364 | 106 | |
Short-term deposits | 552 | 658 | 191 | |
Trade receivables | 624 | 582 | 169 | |
Other receivables and prepaid expenses | 39 | 34 | 10 | |
Deferred expenses – right of use | 26 | 28 | 8 | |
Inventories | 124 | 109 | 32 | |
1,664 | 1,775 | 516 | ||
NON CURRENT ASSETS | ||||
Trade receivables | 250 | 235 | 68 | |
Deferred expenses – right of use | 102 | 111 | 32 | |
Lease – right of use | 582 | 569 | 165 | |
Property and equipment | 1,430 | 1,455 | 424 | |
Intangible and other assets | 538 | 531 | 154 | |
Goodwill | 407 | 407 | 118 | |
Deferred income tax asset | 41 | 35 | 10 | |
Prepaid expenses and other assets | 1 | 9 | 3 | |
3,351 | 3,352 | 974 | ||
TOTAL ASSETS | 5,015 | 5,127 | 1,490 | |
PARTNER COMMUNICATIONS COMPANY LTD. | ||||
(An Israeli Corporation) | ||||
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||
New Israeli Shekels | Convenience | |||
December 31, | September 30, | September 30, | ||
2019 | 2020 | 2020 | ||
(Audited) | (Unaudited) | (Unaudited) | ||
In millions | ||||
CURRENT LIABILITIES | ||||
Current maturities of notes payable and borrowings | 367 | 290 | 84 | |
Trade payables | 716 | 693 | 201 | |
Payables in respect of employees | 103 | 79 | 24 | |
Other payables (mainly institutions) | 23 | 25 | 7 | |
Income tax payable | 30 | 32 | 9 | |
Lease liabilities | 131 | 127 | 37 | |
Deferred revenues from HOT mobile | 31 | 31 | 9 | |
Other deferred revenues | 45 | 65 | 19 | |
Provisions | 43 | 33 | 10 | |
1,489 | 1,375 | 400 | ||
NON CURRENT LIABILITIES | ||||
Notes payable | 1,275 | 1,265 | 368 | |
Borrowings from banks | 138 | 99 | 29 | |
Financial liability at fair value | 28 | 14 | 4 | |
Liability for employee rights upon retirement, net | 43 | 41 | 12 | |
Lease liabilities | 486 | 474 | 138 | |
Deferred revenues from HOT mobile | 102 | 79 | 23 | |
Provisions and other non-current liabilities | 37 | 66 | 18 | |
2,109 | 2,038 | 592 | ||
TOTAL LIABILITIES | 3,598 | 3,413 | 992 | |
EQUITY | ||||
Share capital - ordinary shares of NIS 0.01 | 2 | 2 | 1 | |
December 31, 2019 – *162,915,990 shares | ||||
September 30, 2020 – *182,736,313 shares | ||||
Capital surplus | 1,077 | 1,315 | 382 | |
Accumulated retained earnings | 576 | 597 | 173 | |
Treasury shares, at cost | (238) |
(200) | (58) | |
TOTAL EQUITY | 1,417 | 1,714 | 498 | |
TOTAL LIABILITIES AND EQUITY | 5,015 | 5,127 | 1,490 | |
* Net of treasury shares.
** Including restricted shares in amount of 1,247,583 and 940,226 as of December 31, 2019 and September 30, 2020, respectively, held by a trustee under the Company's Equity Incentive Plan, such shares may become outstanding upon completion of vesting conditions.
PARTNER COMMUNICATIONS COMPANY LTD. | |||||||
(An Israeli Corporation) | |||||||
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||
New Israeli shekels | Convenience | ||||||
9 months period ended September 30, | 3 months period ended September 30, | 9 months | 3 months | ||||
2019 | 2020 | 2019 | 2020 | 2020 | 2020 | ||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||
In millions (except per share data) | |||||||
Revenues, net | 2,400 | 2,381 | 825 | 800 | 692 | 233 | |
Cost of revenues | 2,014 | 1,985 | 687 | 677 | 577 | 197 | |
Gross profit | 386 | 396 | 138 | 123 | 115 | 36 | |
Selling and marketing expenses | 228 | 212 | 78 | 72 | 62 | 21 | |
General and administrative expenses | 124 | 129 | 42 | 39 | 37 | 11 | |
Other income, net | 23 | 21 | 8 | 8 | 6 | 2 | |
Operating profit | 57 | 76 | 26 | 20 | 22 | 6 | |
Finance income | 4 | 4 | 1 | 1 | 1 | * | |
Finance expenses | 52 | 60 | 19 | 25 | 17 | 7 | |
Finance costs, net | 48 | 56 | 18 | 24 | 16 | 7 | |
Profit (loss) before income tax | 9 | 20 | 8 | (4) | 6 | (1) | |
Income tax expenses (income) | (3) | 8 | 1 | 1 | 2 | * | |
Profit (loss) for the period | 12 | 12 | 7 | (5) | 4 | (1) | |
Attributable to: | |||||||
Owners of the Company | 12 | 12 | 7 | (5) | 4 | (1) | |
Non-controlling interests | * | ||||||
Profit (loss) for the period | 12 | 12 | 7 | (5) | 4 | (1) | |
Earnings (losses) per share | |||||||
Basic | 0.07 | 0.06 | 0.04 | (0.03) | 0.02 | (0.01) | |
Diluted | 0.07 | 0.06 | 0.04 | (0.03) | 0.02 | (0.01) | |
Weighted average number of shares outstanding (in thousands) | |||||||
Basic | 162,802 | 182,183 | 162,864 | 182,688 | 182,183 | 182,688 | |
Diluted | 163,497 | 182,839 | 163,505 | 182,688 | 182,839 | 182,688 | |
* Representing an amount of less than 1 million. | |||||||
PARTNER COMMUNICATIONS COMPANY LTD. | |||||||
(An Israeli Corporation) | |||||||
INTERIM CONDENSED CONSOLIDATED STATEMENTS | |||||||
OF COMPREHENSIVE INCOME | |||||||
New Israeli shekels | Convenience translation | ||||||
9 months period ended | 3 months period ended | 9 months September 30, | 3 months September 30, | ||||
2019 | 2020 | 2019 | 2020 | 2020 | 2020 | ||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||
In millions | |||||||
Profit (loss) for the period | 12 | 12 | 7 | (5) | 4 | (1) | |
Other comprehensive income for the period, net of income tax | 1 | * | |||||
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD | 12 | 13 | 7 | (5) | 4 | (1) | |
Total comprehensive income (loss) attributable to: | |||||||
Owners of the Company | 12 | 13 | 7 | (5) | 4 | (1) | |
Non-controlling interests | * | ||||||
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD | 12 | 13 | 7 | (5) | 4 | (1) | |
* Representing an amount of less than 1 million. | |||||||
PARTNER COMMUNICATIONS COMPANY LTD. | |||||||||||||||||
(An Israeli Corporation) | |||||||||||||||||
INTERIM SEGMENT INFORMATION & ADJUSTED EBITDA RECONCILIATION | |||||||||||||||||
New Israeli Shekels | New Israeli Shekels | ||||||||||||||||
9 months period ended September 30, 2020 | 9 months period ended September 30, 2019 | ||||||||||||||||
In millions (Unaudited) | In millions (Unaudited) | ||||||||||||||||
Cellular | Fixed line | Elimination | Consolidated | Cellular | Fixed line | Elimination | Consolidated | ||||||||||
Segment revenue - Services | 1,235 | 641 | 1,876 | 1,348 | 576 | 1,924 | |||||||||||
Inter-segment revenue - Services | 12 | 100 | (112) | 12 | 111 | (123) | |||||||||||
Segment revenue - Equipment | 410 | 95 | 505 | 399 | 77 | 476 | |||||||||||
Total revenues | 1,657 | 836 | (112) | 2,381 | 1,759 | 764 | (123) | 2,400 | |||||||||
Segment cost of revenues - Services | 960 | 625 | 1,585 | 1,044 | 601 | 1,645 | |||||||||||
Inter-segment cost of revenues - Services | 100 | 12 | (112) | 111 | 12 | (123) | |||||||||||
Segment cost of revenues - Equipment | 339 | 61 | 400 | 321 | 48 | 369 | |||||||||||
Cost of revenues | 1,399 | 698 | (112) | 1,985 | 1,476 | 661 | (123) | 2,014 | |||||||||
Gross profit | 258 | 138 | 396 | 283 | 103 | 386 | |||||||||||
Operating expenses (3) | 227 | 114 | 341 | 253 | 99 | 352 | |||||||||||
Other income, net | 15 | 6 | 21 | 17 | 6 | 23 | |||||||||||
Operating profit | 46 | 30 | 76 | 47 | 10 | 57 | |||||||||||
Adjustments to presentation of segment Adjusted EBITDA | |||||||||||||||||
–Depreciation and amortization | 342 | 192 | 418 | 149 | |||||||||||||
–Other (1) | 7 | 2 | 14 | (2) | |||||||||||||
Segment Adjusted EBITDA (2) | 395 | 224 | 479 | 157 | |||||||||||||
Reconciliation of segment subtotal Adjusted | |||||||||||||||||
Segments subtotal Adjusted EBITDA (2) | 619 | 636 | |||||||||||||||
- Depreciation and amortization | (534) | (567) | |||||||||||||||
- Finance costs, net | (56) | (48) | |||||||||||||||
- Income tax income (expenses) | (8) | 3 | |||||||||||||||
- Other (1) | (9) | (12) | |||||||||||||||
Profit for the period | 12 | 12 | |||||||||||||||
PARTNER COMMUNICATIONS COMPANY LTD. | |||||||||||||||||
(An Israeli Corporation) | |||||||||||||||||
INTERIM SEGMENT INFORMATION & ADJUSTED EBITDA RECONCILIATION | |||||||||||||||||
New Israeli Shekels | New Israeli Shekels | ||||||||||||||||
3 months period ended September 30, 2020 | 3 months period ended September 30, 2019 | ||||||||||||||||
In millions (Unaudited) | In millions (Unaudited) | ||||||||||||||||
Cellular | Fixed line | Elimination | Consolidated | Cellular | Fixed line | Elimination | Consolidated | ||||||||||
Segment revenue - Services | 411 | 220 | 631 | 462 | 196 | 658 | |||||||||||
Inter-segment revenue - Services | 4 | 32 | (36) | 4 | 37 | (41) | |||||||||||
Segment revenue - Equipment | 134 | 35 | 169 | 142 | 25 | 167 | |||||||||||
Total revenues | 549 | 287 | (36) | 800 | 608 | 258 | (41) | 825 | |||||||||
Segment cost of revenues - Services | 320 | 226 | 546 | 350 | 203 | 553 | |||||||||||
Inter-segment cost of revenues - Services | 32 | 4 | (36) | 37 | 4 | (41) | |||||||||||
Segment cost of revenues - Equipment | 110 | 21 | 131 | 119 | 15 | 134 | |||||||||||
Cost of revenues | 462 | 251 | (36) | 677 | 506 | 222 | (41) | 687 | |||||||||
Gross profit | 87 | 36 | 123 | 102 | 36 | 138 | |||||||||||
Operating expenses (3) | 72 | 39 | 111 | 84 | 36 | 120 | |||||||||||
Other income, net | 5 | 3 | 8 | 6 | 2 | 8 | |||||||||||
Operating profit | 20 | * | 20 | 24 | 2 | 26 | |||||||||||
Adjustments to presentation of segment Adjusted EBITDA | |||||||||||||||||
–Depreciation and amortization | 113 | 68 | 140 | 55 | |||||||||||||
–Other (1) | 1 | 2 | 6 | (2) | |||||||||||||
Segment Adjusted EBITDA (2) | 134 | 70 | 170 | 55 | |||||||||||||
Reconciliation of segment subtotal Adjusted | |||||||||||||||||
Segments subtotal Adjusted EBITDA(2) | 204 | 225 | |||||||||||||||
- Depreciation and amortization | (181) | (195) | |||||||||||||||
- Finance costs, net | (24) | (18) | |||||||||||||||
- Income tax expenses | (1) | (1) | |||||||||||||||
- Other (1) | (3) | (4) | |||||||||||||||
Profit (loss) for the period | (5) | 7 | |||||||||||||||
* Representing an amount of less than 1 million.
(1) Mainly amortization of employee share based compensation. (2) Adjusted EBITDA as reviewed by the CODM represents Earnings Before Interest (finance costs, net), Taxes, Depreciation and Amortization (including amortization of intangible assets, deferred expenses-right of use and impairment charges) and Other expenses (mainly amortization of share based compensation). Adjusted EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for other companies. Adjusted EBITDA may not be indicative of the Group's historic operating results nor is it meant to be predictive of potential future results. The usage of the term "Adjusted EBITDA" is to highlight the fact that the Amortization includes amortization of deferred expenses – right of use and amortization of employee share based compensation and impairment charges. (3) Operating expenses include selling and marketing expenses and general and administrative expenses.
PARTNER COMMUNICATIONS COMPANY LTD. | |||
(An Israeli Corporation) | |||
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
New Israeli Shekels | Convenience | ||
9 months period ended September 30, | |||
2019 | 2020 | 2020 | |
(Unaudited) | (Unaudited) | (Unaudited) | |
In millions | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Cash generated from operations (Appendix) | 660 | 605 | 175 |
Income tax paid | (1) | (1) | * |
Net cash provided by operating activities | 659 | 604 | 175 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of property and equipment | (378) | (293) | (85) |
Acquisition of intangible and other assets | (124) | (124) | (36) |
Acquisition of a business, net of cash acquired | (3) | ||
Investment in short-term deposits, net | (156) | (106) | (31) |
Interest received | 1 | 3 | 1 |
Consideration received from sales of property and equipment | 2 | ||
Net cash used in investing activities | (658) | (520) | (151) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Lease principal payments | (109) | (102) | (30) |
Lease interest payments | (15) | (13) | (4) |
Interest paid | (21) | (42) | (12) |
Share issuance | 276 | 80 | |
Proceeds from issuance of notes payable, net of issuance costs | 256 | 412 | 120 |
Proceeds from issuance of option warrants exercisable for notes payables | 37 | ||
Repayment of notes payable | (510) | (148) | |
Repayment of non-current borrowings | (39) | (39) | (11) |
Repayment of current borrowings | (13) | ||
Settlement of contingent consideration | (1) | * | |
Transactions with non-controlling interests | (2) | ||
Net cash provided by financing activities | 94 | (19) | (5) |
INCREASE IN CASH AND CASH EQUIVALENTS | 95 | 65 | 19 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 416 | 299 | 87 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 511 | 364 | 106 |
* Representing an amount of less than 1 million.
PARTNER COMMUNICATIONS COMPANY LTD. | ||||
(An Israeli Corporation) | ||||
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
Appendix - Cash generated from operations and supplemental information | ||||
New Israeli Shekels | Convenience | |||
9 months period ended September 30, | ||||
2019 | 2020 | 2020 | ||
(Unaudited) | (Unaudited) | (Unaudited) | ||
In millions | ||||
Cash generated from operations: | ||||
Profit for the period | 12 | 12 | 4 | |
Adjustments for: | ||||
Depreciation and amortization | 546 | 511 | 149 | |
Amortization of deferred expenses - Right of use | 21 | 23 | 7 | |
Employee share based compensation expenses | 13 | 8 | 2 | |
Liability for employee rights upon retirement, net | 2 | (1) | * | |
Finance costs, net | 4 | (1) | (1) | |
Lease interest payments | 15 | 13 | 4 | |
Interest paid | 21 | 42 | 12 | |
Interest received | (1) | (3) | (1) | |
Deferred income taxes | 2 | 6 | 2 | |
Income tax paid | 1 | 1 | * | |
Capital loss from property and equipment | (2) | |||
Changes in operating assets and liabilities: | ||||
Decrease (increase) in accounts receivable: | ||||
Trade | 71 | 57 | 16 | |
Other | (2) | 3 | 1 | |
Increase (decrease) in accounts payable and accruals: | ||||
Trade | 28 | (14) | (4) | |
Other payables | 8 | (22) | (7) | |
Provisions | (14) | (10) | (3) | |
Deferred revenues from HOT mobile | (24) | (23) | (7) | |
Other deferred revenues | 6 | 20 | 6 | |
Increase in deferred expenses - Right of use | (39) | (34) | (10) | |
Current income tax | (6) | 2 | 1 | |
Decrease (increase) in inventories | (2) | 15 | 4 | |
Cash generated from operations | 660 | 605 | 175 | |
* Representing an amount of less than 1 million.
At September 30, 2020 and 2019, trade and other payables include NIS 114 million (
These balances are recognized in the cash flow statements upon payment.
Reconciliation of Non-GAAP Measures: | ||||||
Adjusted Free Cash Flow | New Israeli Shekels | Convenience translation | ||||
9 months period ended September 30, | 3 months period ended September 30, | 9 months period ended September 30, | 3 months period ended September 30, | |||
2019 | 2020 | 2019 | 2020 | 2020 | 2020 | |
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
In millions | ||||||
Net cash provided by operating activities | 659 | 604 | 230 | 207 | 175 | 60 |
Net cash used in investing activities | (658) | (520) | (90) | (198) | (151) | (58) |
Investment in short-termdeposits, net | 156 | 106 | (85) | 51 | 31 | 15 |
Lease principal payments | (109) | (102) | (37) | (35) | (30) | (10) |
Lease interest payments | (15) | (13) | (5) | (4) | (4) | (1) |
Adjusted Free Cash Flow | 33 | 75 | 13 | 21 | 21 | 6 |
Interest paid | (21) | (42) | (1) | (9) | (12) | (3) |
Adjusted Free Cash Flow After Interest | 12 | 33 | 12 | 12 | 9 | 3 |
Total Operating Expenses (OPEX) | New Israeli Shekels | Convenience translation | ||||
9 months period ended September 30, | 3 months period ended September 30, | 9 months September 30, | 3 months September 30, | |||
2019 | 2020 | 2019 | 2020 | 2020 | 2020 | |
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
In millions | ||||||
Cost of revenues – Services | 1,645 | 1,585 | 553 | 546 | 461 | 159 |
Selling and marketing expenses | 228 | 212 | 78 | 72 | 62 | 21 |
General and administrative expenses | 124 | 129 | 42 | 39 | 37 | 11 |
Depreciation and amortization | (567) | (534) | (195) | (181) | (156) | (53) |
Other | (12) | (1) | (4) | (1) | * | * |
OPEX | 1,418 | 1,391 | 474 | 475 | 404 | 138 |
* Representing an amount of less than 1 million.
Key Financial and Operating Indicators (unaudited) ****
NIS M unless otherwise stated | Q3' 18 | Q4' 18 | Q1' 19 | Q2' 19 | Q3' 19 | Q4' 19 | Q1' 20 | Q2' 20 | Q3' 20 | 2018 | 2019 | |
Cellular Segment Service Revenues | 476 | 447 | 441 | 453 | 466 | 438 | 423 | 409 | 415 | 1,843 | 1,798 | |
Cellular Segment Equipment Revenues | 143 | 165 | 142 | 115 | 142 | 172 | 146 | 130 | 134 | 643 | 571 | |
Fixed-Line Segment Service Revenues | 220 | 220 | 224 | 230 | 233 | 238 | 245 | 244 | 252 | 852 | 925 | |
Fixed-Line Segment Equipment Revenues | 25 | 24 | 28 | 24 | 25 | 26 | 32 | 28 | 35 | 92 | 103 | |
Reconciliation for consolidation | (42) | (42) | (41) | (41) | (41) | (40) | (39) | (37) | (36) | (171) | (163) | |
Total Revenues | 822 | 814 | 794 | 781 | 825 | 834 | 807 | 774 | 800 | 3,259 | 3,234 | |
Gross Profit from Equipment Sales | 44 | 42 | 39 | 35 | 33 | 37 | 37 | 30 | 38 | 166 | 144 | |
Operating Profit* | 48 | 14 | 9 | 22 | 26 | 30 | 36 | 20 | 20 | 116 | 87 | |
Cellular Segment Adjusted EBITDA* | 145 | 119 | 150 | 159 | 170 | 156 | 132 | 129 | 134 | 524 | 635 | |
Fixed-Line Segment Adjusted EBITDA* | 56 | 53 | 47 | 55 | 55 | 61 | 83 | 71 | 70 | 198 | 218 | |
Total Adjusted EBITDA* | 201 | 172 | 197 | 214 | 225 | 217 | 215 | 200 | 204 | 722 | 853 | |
Adjusted EBITDA Margin (%)* | ||||||||||||
OPEX* | 504 | 502 | 472 | 472 | 474 | 467 | 460 | 456 | 475 | 1,996 | 1,885 | |
Finance costs, net* | 10 | 12 | 14 | 16 | 18 | 20 | 19 | 13 | 24 | 53 | 68 | |
Profit (Loss)* | 26 | 19 | 2 | 3 | 7 | 7 | 10 | 7 | (5) | 56 | 19 | |
Capital Expenditures (cash) | 117 | 143 | 185 | 143 | 174 | 127 | 151 | 119 | 147 | 502 | 629 | |
Capital Expenditures (additions) | 111 | 177 | 157 | 142 | 150 | 129 | 129 | 121 | 179 | 499 | 578 | |
Adjusted Free Cash Flow | 70 | (22) | (11) | 31 | 13 | 16 | 10 | 44 | 21 | 124 | 49 | |
Adjusted Free Cash Flow (after interest) | 62 | (37) | (15) | 15 | 12 | 0 | 8 | 13 | 12 | 55 | 12 | |
Net Debt | 898 | 950 | 977 | 965 | 956 | 957 | 673 | 658 | 646 | 950 | 957 | |
Cellular Subscriber Base (Thousands)** | 2,630 | 2,646 | 2,620 | 2,616 | 2,651 | 2,657 | 2,676 | 2,708 | 2,762 | 2,646 | 2,657 | |
Post-Paid Subscriber Base (Thousands)** | 2,333 | 2,361 | 2,340 | 2,337 | 2,366 | 2,366 | 2,380 | 2,404 | 2,437 | 2,361 | 2,366 | |
Pre-Paid Subscriber Base (Thousands) | 297 | 285 | 280 | 279 | 285 | 291 | 296 | 304 | 325 | 285 | 291 | |
Cellular ARPU (NIS) | 60 | 57 | 56 | 58 | 59 | 55 | 53 | 51 | 51 | 58 | 57 | |
Cellular Churn Rate (%)** | ||||||||||||
Number of Employees (FTE)*** | 2,821 | 2,782 | 2,897 | 2,895 | 2,923 | 2,834 | 1,867 | 2,745 | 2,731 | 2,782 | 2,834 |
* Figures from 2019 include impact of adoption of IFRS 16 - Leases (see also report 20-F).
** As from Q4 2018, M2M subscriptions are included in the post-paid subscriber base on a standardized basis. This change had the effect of increasing the Post-Paid subscriber base at December 31, 2018, by approximately 34 thousand subscribers.
*** From 2019, the number of employees (FTE) also includes the number of FTE of PHI on a proportional basis of Partner's share in the subsidiary (
****See footnote 2 regarding use of non-GAAP measures.
Disclosure for notes holders as of September 30, 2020
Information regarding the notes series issued by the Company, in million NIS
Series | Original | Principal on | As of 30.09.2020 | Annual interest | Principal repayment | Interest repayment | Interest | Trustee contact details | ||||
Principal | Linked principal | Interest accumulated | Market | From | To | |||||||
D | 25.04.10 04.05.11* | 400 146 | 218 | 218 | ** | 219 |
(MAKAM+ | 30.12.17 | 30.12.21 | 30.03, 30.06, 30.09, 30.12 | Variable interest MAKAM (4) | Hermetic Trust (1975) Ltd. |
F (2) (3) | 20.07.17 12.12.17* 04.12.18* 01.12.19* | 255 389 150 226.75 | 512 | 512 | 3 | 526 | 25.06.20 | 25.06.24 | 25.06, 25.12 | Not Linked | Hermetic Trust (1975) Ltd. Merav Offer. 113 Hayarkon St., | |
G (1) (2) | 06.01.19 01.07.19* 28.11.19* 27.02.20* 31.05.20* 01.07.20* 02.07.20* | 225 38.5 86.5 15.1 84.8 12.2 300 | 762 | 762 | 8 | 849 | 25.06.22 | 25.06.27 | 25.06 | Not Linked | Hermetic Trust (1975) Ltd. Merav Offer. 113 Hayarkon St., | |
(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, the Company issued Series G Notes in a principal amount of NIS 12.2 million. In November 2020 the Company received an advance of NIS 55 million, for which the Company will issue additional Series G Notes in a principal amount of NIS 62 million by the end of November 2020. As of today, the total future considerations expected to the Company in respect of the allotment of the option warrants from the second series (after the exercises of option warrants as described above) and in respect of their full exercise (and assuming that there will be no change to the exercise price) is approximately NIS 23 million.
In July 2020, the Company issued in a private placement additional Series G Notes in a principal amount of NIS 300 million, under the same conditions of the original series.
(2) Regarding Series F and G Notes, the Company is required to comply with a financial covenant that the ratio of Net Debt to Adjusted EBITDA shall not exceed 5. Compliance will be examined and reported on a quarterly basis. For the purpose of the covenant, Adjusted EBITDA is calculated as the sum total for the last 12 month period, excluding adjustable one-time items. As of June 30, 2020, the ratio of Net Debt to Adjusted EBITDA was 0.8. Additional stipulations regarding Series F and G Notes mainly include: shareholders' equity shall not decrease below NIS 400 million and NIS 600 million, respectively; the Company shall not create floating liens subject to certain terms; the Company has the right for early redemption under certain conditions; the Company shall pay additional annual interest of
In the reporting period, the Company was in compliance with all financial covenants and obligations and no cause for early repayment occurred.
(3) In July 2020, the Company executed a partial early redemption of Series F Notes in a total principal amount of NIS 305 million. The total amount paid was NIS 313 million.
(4) 'MAKAM' is a variable interest based on the yield of 12 month government bonds issued by the government of Israel. The interest rate is updated on a quarterly basis.
* On these dates additional Notes of the series were issued. The information in the table refers to the full series. ** Representing an amount of less than NIS 1 million.
Disclosure for Notes holders as of September 30, 2020 (cont.)
Notes Rating Details*
Series | Rating Company | Rating as of | Rating assigned | Recent date of rating | Additional ratings between the original issuance date and the recent date of rating (2) | |
Date | Rating | |||||
D | S&P Maalot | ilA+ | ilAA- | 08/2020 | 07/2010, 09/2010, 10/2010, 09/2012, 12/2012, 06/2013, 07/2014, 07/2015, 07/2016, 07/2017, 08/2018, 11/2018, 12/2018, 01/2019, 04/2019, 08/2019, 02/2020, 05/2020, 06/2020, 07/2020 08/2020 | ilAA-, ilAA-, ilAA-, ilAA-, ilAA-, ilAA-, ilAA-, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+ ilA+ |
F | S&P Maalot | ilA+ | ilA+ | 08/2020 | 07/2017, 09/2017, 12/2017, 01/2018, 08/2018, 11/2018, 12/2018, 01/2019, 04/2019, 08/2019, 02/2020, 05/2020, 06/2020, 07/2020, 08/2020 | ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+ ilA+, ilA+, ilA+ |
G (3) | S&P Maalot | ilA+ | ilA+ | 08/2020 | 12/2018, 01/2019, 04/2019, 08/2019, 02/2020, 05/2020, 06/2020, 07/2020 08/2020 | ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+, ilA+ ilA+ |
(1) In August 2020, S&P Maalot has reaffirmed the Company's ilA+ credit rating and updated the Company's rating outlook from "negative" to "stable".
(2) For details regarding the rating of the notes see the S&P Maalot reports dated August 10, 2020.
(3) In January 2019, the Company issued Series G Notes in a principal amount of NIS 225 million. In July 2019, November 2019, February 2020 and May 31, 2020 the Company issued additional Series G Notes in a principal amount of NIS 38.5 million, NIS 86.5 million, NIS 15.1 million and NIS 84.8 million, respectively. In July, 2020, the Company issued additional Series G Notes in a total principal amount of NIS 312.2 million.
* A securities rating is not a recommendation to buy, sell or hold securities. Ratings may be subject to suspension, revision or withdrawal at any time, and each rating should be evaluated independently of any other rating
Summary of Financial Undertakings (according to repayment dates) as of September 30, 2020
a. Notes issued to the public by the Company and held by the public, excluding such notes held by the Company's parent company, by a controlling shareholder, by companies controlled by them, or by companies controlled by the Company, based on the Company's "Solo" financial data (in thousand NIS).
Principal payments | Gross interest payments | |||||
ILS linked | ILS not linked | Euro | Dollar | Other | ||
First year | - | 237,130 | - | - | - | 43,244 |
Second year | - | 313,342 | - | - | - | 39,115 |
Third year | - | 204,114 | - | - | - | 32,962 |
Fourth year | - | 204,114 | - | - | - | 27,217 |
Fifth year and on | - | 533,487 | - | - | - | 51,824 |
Total | - | 1,492,187 | - | - | - | 194,362 |
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 | |||||
ILS linked | ILS not linked | Euro | Dollar | Other | ||
First year | - | 52,132 | - | - | - | 3,229 |
Second year | - | 52,132 | - | - | - | 1,959 |
Third year | - | 30,073 | - | - | - | 825 |
Fourth year | - | 17,080 | - | - | - | 213 |
Fifth year and on | - | - | - | - | - | - |
Total | - | 151,417 | - | - | - | 6,226 |
Summary of Financial Undertakings (according to repayment dates) as of September 30, 2020 (cont.)
d. Credit from banks abroad based on the Company's "Solo" financial data – None.
e. Total of sections a - d above, total credit from banks, non-bank credit and notes based on the Company's "Solo" financial data (in thousand NIS).
Principal payments | Gross interest payments | |||||
ILS linked | ILS not linked | Euro | Dollar | Other | ||
First year | - | 289,262 | - | - | - | 46,473 |
Second year | - | 365,474 | - | - | - | 41,074 |
Third year | - | 234,187 | - | - | - | 33,787 |
Fourth year | - | 221,194 | - | - | - | 27,430 |
Fifth year and on | - | 533,487 | - | - | - | 51,824 |
Total | - | 1,643,604 | - | - | - | 200,588 |
f. Off-balance sheet Credit exposure based on the Company's "Solo" financial data (in thousand NIS) – 50,000 (Guarantees on behalf of a joint arrangement, without expiration date).
g. Off-balance sheet Credit exposure of all the Company's consolidated companies, excluding companies that are reporting corporations and excluding the Company's data presented in section f above - None.
h. Total balances of the credit from banks, non-bank credit and notes of all the consolidated companies, excluding companies that are reporting corporations and excluding Company's data presented in sections a - d above - None.
i. Total balances of credit granted to the Company by the parent company or a controlling shareholder and balances of notes offered by the Company held by the parent company or the controlling shareholder - None.
j. Total balances of credit granted to the Company by companies held by the parent company or the controlling shareholder, which are not controlled by the Company, and balances of notes offered by the Company held by companies held by the parent company or the controlling shareholder, which are not controlled by the Company – None.
k. Total balances of credit granted to the Company by consolidated companies and balances of notes offered by the Company held by the consolidated companies - None.
In addition to the total credit above, Company's financial debt includes financial liability at fair value in respect of option warrants issued in May 2019. At September 30, 2020, this financial liability totals to an amount of NIS 14 million.
In July 2020, the Company executed a partial early redemption of Series F Notes in a total principal amount of NIS 305 million.
[1] The quarterly financial results are unaudited.
[2] For the definition of this and other Non-GAAP financial measures, see "Use of Non-GAAP Financial Measures" in this press release.
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SOURCE Partner Communications Company Ltd.
