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Datum nieuwsfeit: 05-11-2008
( BW)(PARTNER-COMMUNICATIONS)(PTNR)(PTNR.TA) Partner Communications
Reports Third Quarter 2008 Results
Telecommunications Writers/Financial Editors
ROSH HA'AYIN, Israel--(BUSINESS WIRE)--Nov. 5, 2008--
PARTNER COMMUNICATIONS REPORTS
THIRD QUARTER 2008 RESULTS
DOUBLE-DIGIT GROWTH IN ALL
KEY PROFITABILITY MEASURES
RECORD EBITDA of NIS 624M, 38.2% of TOTAL REVENUE,
or 42.8% of SERVICE REVENUES
Q3 2008 Highlights (compared with Q3 2007)
-- Total Revenues: NIS 1,636 million (US$ 478 million), an
increase of 2.2%
-- Service Revenues: NIS 1,458 million (US$ 426 million), an
increase of 4.1%
-- Operating Profit: NIS 469 million (US$ 137 million), an
increase of 20.5%
-- Net Income: NIS 296 million (US$ 87 million), an increase of
38.4%
-- EBITDA (1): NIS 624 million (US$ 182 million), an increase of
15.7%
-- EBITDA Margin (2): 38.2% of total revenues compared with 33.7%
-- Free Cash Flow (3): NIS 440 million (US$ 129 million), an
increase of 225.3%
-- Subscriber Base: 36,000 net additions in the quarter, to reach
2.882 million, including 901,000 3G subscribers
-- Dividend Declared: NIS 1.54 (42 US cents(4)) per share or ADS
(in total approximately NIS 237 million or US$ 64 million(4))
for the 3rd quarter
Partner Communications Company Ltd. ("Partner" or "the Company")
(Nasdaq:PTNR)(TASE:PTNR), a leading Israeli mobile communications
operator, today announced its results for the third quarter of 2008.
Partner reported total revenues of NIS 1.6 billion (US$ 478 million)
in Q3 2008, EBITDA of NIS 624 million (US$ 182 million), and net
income of NIS 296 million (US$ 87 million).
Commenting on the quarter's results, Partner's CEO, Mr. David
Avner, said: "I am very pleased with the third quarter's results. We
have managed to maintain a competitive cost structure despite the
tough competition and the current implementation of our new strategic
activities, thereby reaching impressive profitability margins."
Mr. Avner added: "In these times of economic uncertainty and
turbulence, Partner's resilient financial structure, reflected in our
ability to generate steady and strong cash flow, is one of the most
remarkable strengths of the Company. It reflects Partner's solid
balance sheet and healthy operational position as well as its ability
to continue and deliver value to our shareholders while actively
implementing new initiatives. As we recently announced, Partner
expects to start in the near future the "soft launch" of its new
portfolio of services (which will include ISP services, mail access,
Wi-Fi, fixed telephony through Voice over Broadband technology ("VOB")
and web based entertainment multimedia services), taking a further
step toward realizing the Company's strategy to evolve from a pure
cellular operator into a diversified multi-service communications and
media service provider. By developing a pervasive presence in the
customers' premises, Partner will offer its subscribers the benefits
of service synergies with its core activity while strengthening its
position as a leading telecommunications company in Israel".
Mr. Avner concluded: "We are now harvesting the fruits of our
conservative and fundamental business approach, and I am confident
that we are in a strong position to deal with future challenges."
Key Financial and Operational Parameters
-0-
*T
Q3 2007 Q2 2008 Q3 2008 Q3'08 vs Q3'08 vs
Q3'07 Q2'08
Revenues (NIS millions) 1,601.0 1,544.1 1,636.0 2.2% 6.0%
Operating Profit (NIS 389.7 377.9 469.4 20.5% 24.2%
millions)
Net Income (NIS millions) 214.0 247.3 296.2 38.4% 19.8%
Cash flow from operating 135.3 601.0 440.0 225.3% -26.8%
activities net of
investing activities
(NIS millions)
------------------------- ------- --------- -------- -------- --------
EBITDA (NIS millions) 539.3 541.0 624.2 15.7% 15.4%
Subscribers (end of 2,796 2,846(5) 2,882 3.1% 1.3%
period, in thousands)
Estimated Market Share 32 32 32 - -
(%)
Quarterly Churn Rate (%) 3.3 4.0 3.9 0.6 0.1
Average Monthly Usage per 343 368 376 9.6% 2.2%
Subscriber (minutes)
Average Monthly Revenue 165 158 166 0.6% 5.1%
per Subscriber (NIS)
------------------------- ------- --------- -------- -------- --------
*T
Financial Review
Partner's total net revenues were NIS 1,636.0 million (US$ 478.2
million) in Q3 2008, an increase of 2.2% from NIS 1,601.0 million in
Q3 2007. Within the total, service revenues increased by 4.1% from NIS
1,401.1 million in Q3 2007 to NIS 1,458.1 million (US$ 426.2 million)
in Q3 2008. The increase primarily reflects the 3.1% growth in the
subscriber base, an increase in the weight of post-paid subscribers
with higher levels of ARPU in our subscriber base, higher average
minutes of use, as well as an increase in content and data revenues.
The increase that resulted 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 1, 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 135.6
million (US$ 39.6 million), or 9.3% of service revenues, in Q3 2008,
compared with 7.6% of service revenues in Q3 2007, an increase of
27.0%. Compared with Q2 2008, non-SMS content revenues increased by
11.7%.
SMS services revenues totaled NIS 86.3 million (US$ 25.2 million)
in Q3 2008, an increase of 25.4% compared with Q3 2007, the equivalent
of 5.9% of service revenues in Q3 2008, compared with 4.9% in Q3 2007.
Gross profit from services in Q3 2008 was NIS 640.8 million (US$
187.3 million), compared with NIS 593.5 million in Q3 2007, an 8.0%
increase. The increase reflects the growth in service revenues, offset
by a 1.2% increase in the cost of service revenues. The cost of
service revenues increase is mainly due to additional depreciation
expenses of approximately NIS 12 million resulting from the
accelerated depreciation of the equipment to be replaced under an
agreement with LM Ericsson Israel Ltd. The agreement is expected to
result in annual depreciation expenses of approximately NIS 74 million
over 2008, of which NIS 67 million has already been recorded, with the
remaining NIS 7 million to be recorded in Q4 2008. In addition, the
services revenues cost increase reflects higher variable airtime and
content costs as a result of higher airtime and content usage.
In Q3 2008, equipment revenues were NIS 177.9 million (US$ 52.0
million), an 11.0% decrease from NIS 199.9 million in Q3 2007. The
decrease is primarily attributed to the lower number of transactions,
partially offset by the impact of an increase in the proportion of 3G
handsets sold compared with 2G handsets. The gross loss on equipment
amounted to NIS 12.6 million (US$ 3.7 million) in Q3 2008, compared
with NIS 66.0 million in Q3 2007, a decrease of 80.8%. This mainly
reflects the lower number of sales, as well as a decrease in handset
costs due, in part, to the fall in the dollar-shekel exchange rate.
Total gross profit in Q3 2008 was NIS 628.2 million (US$ 183.6
million), an increase of 19.1% from NIS 527.5 million in Q3 2007.
Selling, marketing, general and administration expenses totaled
NIS 158.7 million (US$ 46.4 million) in Q3 2008, an increase of 15.2%
from NIS 137.8 million in Q3 2007. This reflects the incremental cost
of growing the subscriber base, including larger provisions for
doubtful accounts from receivables on handset sales and service
revenues and higher selling costs, as well as additional costs related
to the planned gradual launch of our new portfolio of services which
is expected during the first half of 2009.
Overall, operating profit was NIS 469.4 million (US$ 137.2
million) in Q3 2008, a 20.5% increase compared with NIS 389.7 million
in Q3 2007.
Quarterly EBITDA in Q3 2008 totaled NIS 624.2 million (US$ 182.5
million), the equivalent of 42.8% of service revenues and 38.2% of
total revenues. Compared with NIS 539.3 million or 38.5% of service
revenues and 33.7% of total revenues in Q3 2007, this represents an
increase of 15.7%.
Financial expenses in Q3 2008 were NIS 63.7 million (US$ 18.6
million), compared with NIS 73.8 million in Q3 2007, a 13.6% decrease.
The decrease is mainly attributed to lower linkage expenses due to the
increase of 2.0% in the CPI level of Q3 2008 compared to an increase
in the CPI level of 2.5% in Q3 2007.
Net income for Q3 2008 totaled NIS 296.2 million (US$ 86.6
million), representing an increase of 38.4% from NIS 214.0 million in
Q3 2007.
Basic earnings per share or ADS, based on the average number of
shares outstanding during Q3 2008, was NIS 1.92 (56 US cents), up by
40.1% from NIS 1.37 in Q3 2007.
Funding and Investing Review
In Q3 2008, cash flows generated from operating activities, net of
cash flows from investing activities totaled NIS 440.0 million (US$
128.6 million), compared with NIS 135.3 million in Q3 2007, an
increase of 225.3%. The increase reflects the higher net income as
well as two other factors; firstly, operating cash flow in Q3 2007 was
relatively low since payments to suppliers and interest charges for Q2
2007 were deferred to Q3 2007 and inventories were built-up during Q3
2007 for reasons related to number portability. Secondly, the increase
reflects the initiatives that were taken in Q2 2008 to reduce working
capital and cash flow volatility and the factoring of handset revenues
that increased quarterly operating cash flow in Q3 2008 by
approximately NIS 40 million. Cash flow from investing activities this
quarter totaled NIS 118.2 million, compared to NIS 138.9 million in Q3
2007, a decrease of 14.9%. The Company has generated free cash flow of
NIS 1,021.1 million during the first nine months of 2008, compared
with NIS 610.7 million generated during the first nine months of, an
increase of 67.2%.
In February 2008, the Board of Directors approved a share buyback
plan throughout 2008 in an amount of up to NIS 600 million, subject to
appropriate market conditions. As of September 30, 2008, the Company
had repurchased approximately 4.5 million of its shares at an average
price per share of NIS 78.44, for a total consideration of
approximately NIS 351 million.
In view of the recent significant financial market turbulence, the
Board of Directors has decided to suspend the current share buyback
plan for 2008. The issue will be revisited by the Board once market
conditions become more stable.
The Board has approved the distribution of a dividend for Q3 2008
of NIS 1.54 (42 US cents(6)) per share (in total approximately NIS 237
million or US$ 64 million(6)) to shareholders and ADS holders of
record on November 26, 2008. The dividend is expected to be paid on
December 11, 2008.
Operational Review
The Company's active subscriber base at the end of the third
quarter 2008 was approximately 2,882,000, including approximately
763,000 business subscribers (26.5% of the base), 1,382,000 post-paid
private subscribers (48.0% of the base) and 737,000 prepaid
subscribers (25.6% of the base). Approximately 901,000 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 36,000 net new subscribers
joined the Company, including approximately 21,000 new net active
postpaid subscribers and 15,000 new net active prepaid subscribers.
The quarterly churn rate increased from 3.3% in Q3 2007 to 3.9% in Q3
2008. The increase primarily reflects the tail effect of number
portability.
Average minutes of use per subscriber ("MOU") was 376 minutes in
Q3 2008, compared with 343 minutes in Q3 2007. The average revenue per
user ("ARPU") in Q3 2008 totaled NIS 166 (US$ 49), marginally higher
than NIS 165 in Q3 2007.
Other
On October 30, 2008, the Ministry of Communications announced
that, effective December 31, 2008, the cellular companies will be
obligated to determine a fixed tariff that will apply during the
entire commitment period. This provision will apply to agreements with
non-business customers. The Company is assessing the implications of
the new regulation and the various options it has in order to mitigate
any potential adverse effect on its business results.
Outlook and Guidance
Commenting on the Company's results, Mr. Emanuel Avner, Partner's
Chief Financial Officer said: "Obviously we are delighted with the
results of the third quarter 2008. Service revenues continue to rise,
despite the competitive market. We have succeeded in raising operating
efficiency significantly over the last few quarters and now the
results are beginning to show through the key financial and
performance indicators, as well as our impressive free cash flow
generation. This puts us on a strong footing to mitigate the effect of
a potential economic downturn while continuing to grow the business."
Commenting on the Company's outlook for the fourth quarter, Mr.
Emanuel Avner added: "We reiterate our annual guidance for 2008,
bearing in mind that the fourth quarter is seasonally slower than the
third quarter. With regards to capital expenditures in particular, the
annual level of capital expenditures for 2008 is currently expected to
reach approximately 9% of anticipated revenues, in line with the
Company's previous estimations."
Conference Call Details
Partner Communications will hold a conference call to discuss the
company's first quarter results on Wednesday, November 5, 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 November 12, 2008.
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 "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, 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.
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 about Partner, consumer habits and
preferences in cellular telephone usage, trends in the Israeli
telecommunications industry in general and possible regulatory and
legal developments. For a description of some of the risks we face,
see "Item 3D. Key Information - Risk Factors", "Item 4. - Information
on the Company", "Item 5. - Operating and Financial Review and
Prospects" and "Item 8A. - Consolidated Financial Statements and Other
Financial Information - Legal and Administrative Proceedings" in the
form 20-F filed with the SEC on May 6, 2008. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in
this press release might not occur, and actual results may differ
materially from the results anticipated. 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 30, 2008: US $1.00 equals NIS 3.421. 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.
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 2.882
million subscribers in Israel (as of September 30, 2008). Partner's
ADSs are quoted on the NASDAQ Global Select Market(TM) 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, 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/
PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED BALANCE SHEETS
-0-
*T
Convenience
New Israeli shekels translation into
U.S. dollars
--------------------- ---------------------
September December September December
30, 31, 30, 31,
2008 2007 2008 2007
----------- --------- ----------- ---------
(Unaudited) (Audited) (Unaudited) (Audited)
----------- --------- ----------- ---------
In thousands
Assets
CURRENT ASSETS:
Cash and cash 131,368 38,400 43,290
equivalents 148,096
Accounts receivable:
Trade 1,065,929 1,120,842 311,584 327,636
Other 95,393 72,729 27,885 21,260
Inventories 127,215 132,868 37,186 38,839
Deferred income taxes 59,859 46,089 17,498 13,472
----------- --------- ----------- ---------
Total current assets 1,479,764 1,520,624 432,553 444,497
----------- --------- ----------- ---------
INVESTMENTS AND LONG-TERM
RECEIVABLES:
Accounts receivable - 419,021 446,899 122,485 130,634
trade
Funds in respect of 86,639 88,522 25,326 25,876
employee rights upon
retirement
----------- --------- ----------- ---------
505,660 535,421 147,811 156,510
----------- --------- ----------- ---------
FIXED ASSETS, net of
accumulated depreciation
And amortization 1,671,272 1,727,662 488,533 505,016
----------- --------- ----------- ---------
LICENSE, DEFERRED CHARGES
AND OTHER
INTANGIBLE ASSETS, net 1,083,087 1,153,926 316,600 337,307
of accumulated
amortization
----------- --------- ----------- ---------
DEFERRED INCOME TAXES 93,598 93,745 27,360 27,403
----------- --------- ----------- ---------
Total assets 4,833,381 5,031,378 1,412,857 1,470,733
=========== ========= =========== =========
*T
-0-
*T
Convenience
New Israeli shekels translation into
U.S. dollars
--------------------- ---------------------
September December September December
30, 31, 30, 31,
2008 2007 2008 2007
----------- --------- ----------- ---------
(Unaudited) (Audited) (Unaudited) (Audited)
----------- --------- ----------- ---------
In thousands
Liabilities and
shareholders' equity
CURRENT LIABILITIES:
Current maturities of
long-term liabilities 387,706 28,280 113,331 8,267
Accounts payable and
accruals:
Trade 709,048 749,623 207,263 219,124
Other 349,057 375,510 102,034 109,766
Parent group - trade 5,253 3,405 1,536 995
----------- --------- ----------- ---------
Total current
liabilities 1,451,064 1,156,818 424,164 338,152
----------- --------- ----------- ---------
LONG-TERM LIABILITIES:
Notes payable 1,813,744 2,072,636 530,179 605,856
Liability for employee
rights upon retirement 144,532 131,960 42,248 38,574
Other liabilities 16,987 14,492 4,966 4,236
----------- --------- ----------- ---------
Total long-term
liabilities 1,975,263 2,219,088 577,393 648,666
----------- --------- ----------- ---------
COMMITMENTS AND CONTINGENT
LIABILITIES
----------- --------- ----------- ---------
Total liabilities 3,426,327 3,375,906 1,001,557 986,818
----------- --------- ----------- ---------
SHAREHOLDERS' EQUITY:
Share capital - ordinary
shares of NIS 0.01 par
value: authorized -
December 31, 2007
and September 30,
2008 - 235,000,000
shares; issued and
outstanding -
December 31, 2007
- 157,320,770
shares
September 30, 2008 1,578 1,573 461 460
- 157,807,002
shares
Less - treasury
shares, at cost
(4,467,990 ordinary
shares) (351,097) (102,630)
Capital surplus 2,566,532 2,544,943 750,229 743,918
Accumulated deficit (809,959) (891,044) (236,760) (260,463)
----------- --------- ----------- ---------
Total shareholders'
equity 1,407,054 1,655,472 411,300 483,915
----------- --------- ----------- ---------
4,833,381 5,031,378 1,412,857 1,470,733
=========== ========= =========== =========
*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,
----------------------- ------------------------
2008 2007 2008 2007
----------- ----------- ----------- ------------
(Unaudited)
------------------------------------------------
In thousands (except per share data)
------------------------------------------------
REVENUES - net:
Services 4,176,560 3,966,982 1,458,137 1,401,057
Equipment 591,375 519,293 177,880 199,945
----------- ----------- ----------- ------------
4,767,935 4,486,275 1,636,017 1,601,002
----------- ----------- ----------- ------------
COST OF REVENUES:
Services 2,426,755 2,315,363 817,335 807,540
Equipment 662,982 695,479 190,526 265,967
----------- ----------- ----------- ------------
3,089,737 3,010,842 1,007,861 1,073,507
----------- ----------- ----------- ------------
GROSS PROFIT 1,678,198 1,475,433 628,156 527,495
SELLING AND MARKETING
EXPENSES 301,408 259,801 96,830 86,315
GENERAL AND
ADMINISTRATIVE
EXPENSES 180,752 157,612 61,915 51,483
----------- ----------- ----------- ------------
482,160 417,413 158,745 137,798
----------- ----------- ----------- ------------
OPERATING PROFIT 1,196,038 1,058,020 469,411 389,697
FINANCIAL EXPENSES -
net 111,723 132,846 63,732 73,768
----------- ----------- ----------- ------------
INCOME BEFORE TAXES
ON INCOME 1,084,315 925,174 405,679 315,929
TAXES ON INCOME 297,511 287,243 109,477 101,974
----------- ----------- ----------- ------------
NET INCOME FOR THE
PERIOD 786,804 637,931 296,202 213,955
=========== =========== =========== ============
EARNINGS PER SHARE
("EPS") :
Basic: 5.04 4.08 1.92 1.37
=========== =========== =========== ============
Diluted: 5.01 4.05 1.91 1.36
=========== =========== =========== ============
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING:
Basic 156,010,793 156,213,495 154,382,712 156,683,913
=========== =========== =========== ============
Diluted 157,095,796 157,579,035 155,356,232 157,883,303
=========== =========== =========== ============
Convenience translation
into U.S. dollars
-----------------------
9 month 3 month
period period
ended ended
September September
30, 30,
----------- -----------
2008 2008
----------- -----------
(Unaudited)
-------------------------
In thousands (except per
share data)
-------------------------
REVENUES - net:
Services 1,220,859 426,231
Equipment 172,866 51,996
----------- -----------
1,393,725 478,227
----------- -----------
COST OF REVENUES:
Services 709,370 238,917
Equipment 193,798 55,693
----------- -----------
903,168 294,610
----------- -----------
GROSS PROFIT 490,557 183,617
SELLING AND MARKETING EXPENSES 88,105 28,305
GENERAL AND ADMINISTRATIVE
EXPENSES 52,836 18,098
----------- -----------
140,941 46,403
----------- -----------
OPERATING PROFIT 349,616 137,214
FINANCIAL EXPENSES - net 32,657 18,630
----------- -----------
INCOME BEFORE TAXES ON INCOME 316,959 118,584
TAXES ON INCOME 86,966 32,001
----------- -----------
NET INCOME FOR THE PERIOD 229,993 86,583
=========== ===========
EARNINGS PER SHARE ("EPS") :
Basic: 1.47 0.56
=========== ===========
Diluted: 1.46 0.56
=========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING:
Basic 156,010,793 154,382,712
=========== ===========
Diluted 157,095,796 155,356,232
=========== ===========
*T
DRAFT V8 04/11/2008
8400/0/764840/1PARTNER COMMUNICATIONS COMPANY LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-0-
*T
Convenience
translation
into
U.S.
New Israeli shekels dollars
--------------------- -----------
9 month
period
ended
9 month period September
ended September 30, 30,
---------------------
2008 2007 2008
----------- --------- -----------
(Unaudited)
---------------------------------
In thousands
---------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income for the period 786,804 637,931 229,993
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 503,176 449,643 147,084
Amortization of deferred
compensation related to employee
stock option grants, net 7,087 13,179 2,072
Liability for employee rights upon
retirement 12,572 13,573 3,675
Accrued interest and exchange rate
and linkage differences on long-
term liabilities 103,229 60,147 30,175
Deferred income taxes (13,623) (23,411) (3,982)
Capital loss on sale of fixed
assets 371 1,146 108
Changes in operating assets
and liabilities:
Decrease (increase) in
accounts receivable:
Trade 82,791 (201,805) 24,201
Other (22,664) (32,957) (6,625)
Increase (decrease) in
accounts payable and
accruals:
Related Parties 1,848 (14,166) 540
Trade (62,478) 106,944 (18,263)
Other (32,127) 44,795 (9,391)
Decrease (increase) in
inventories 5,653 (51,966) 1,652
Increase in asset retirement
obligations 456 352 133
----------- --------- -----------
Net cash provided by operating
activities 1,373,095 1,003,405 401,372
----------- --------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of fixed assets (354,486) (387,177) (103,620)
Acquisition of optic fibers
activity (701)
Proceeds from sale of fixed assets 573 43 168
Funds in respect of employee
rights upon retirement 1,883 (4,911) 550
----------- --------- -----------
Net cash used in investing
activities (352,030) (392,746) (102,902)
----------- --------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Financial lease undertaken 7,416
Repayment of capital lease (5,170) (6,713) (1,511)
Treasury stock (351,097) (102,630)
Proceeds from exercise of stock
options granted to employees 14,502 57,810 4,239
Dividend Paid (695,427) (429,955) (203,282)
Windfall tax benefit in respect
of exercise of options granted
to employees 370 1,021 108
Repayment of long term bank loans (20,971) (280,325) (6,130)
Receiving of long term bank
loans 20,000 5,846
----------- --------- -----------
Net cash used in financing
activities (1,037,793) (650,746) (303,360)
----------- --------- -----------
DECREASE IN CASH AND CASH
EQUIVALENTS (16,728) (40,087) (4,890)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 148,096 77,547 43,290
----------- --------- -----------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD 131,368 37,460 38,400
=========== ========= ===========
*T
Supplementary information on investing not involving cash flows
At September 30, 2008 and 2007, trade payables include NIS 182
million ($ 53 million) (unaudited) and NIS 114 million (unaudited) in
respect of acquisition of fixed assets, respectively.
These balances will be given recognition in these statements upon
payment.
At September 30, 2008, tax withholding related to dividend of
approximately NIS 18 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
-0-
*T
Convenience
New Israeli shekels translation
into
U.S. dollars
------------------------ ------------
9 Month
9 Month Period Ended Period
September 30, Ended
September
30,
------------------------ ------------
2008 2007 2008
------------ ----------- ------------
(Unaudited)
----------------------------------------------------------------------
In thousands
----------------------------------------------------------------------
Net cash provided by operating
activities 1,373,095 1,003,405 401,372
Liability for employee rights
upon retirement (12,572) (13,573) (3,675)
Accrued interest and exchange
and linkage differences on
long-term liabilities (103,229) (60,147) (30,175)
Increase (Decrease) in accounts
receivable:
Trade (82,791) 201,805 (24,201)
Other 22,664 343,611 6,625
Decrease (Increase) in accounts
payable and accruals:
Trade 62,478 (106,944) 18,263
Shareholder - current
account (1,848) 14,166 (540)
Other (excluding tax
provision) 343,261 (44,795) 100,339
Increase (Decrease) in
inventories (5,653) 51,966 (1,652)
Increase in Assets Retirement
Obligation (456) (352) (133)
Financial Expenses ** 102,806 124,219 30,051
------------ ----------- ------------
EBITDA 1,697,755 1,513,361 496,274
------------ ----------- ------------
*T
* The convenience translation of the New Israeli Shekel (NIS)
figures into US dollars was made at the exchange prevailing at
September 30, 2008 : US $1.00 equals 3.421 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 2007 Q2 2008 Q32008
------------------------------------- ---------- -------------- ------
Subscribers (end of period, in
thousands) 2,796 2,846* 2,882
------------------------------------- ---------- -------------- ------
Estimated share of total Israeli
mobile telephone subscribers 32% 32% 32%
------------------------------------- ---------- -------------- ------
Churn rate in quarter 3.3% 4.0% 3.9%
------------------------------------- ---------- -------------- ------
MOU (actual minutes of use) 343 368 376
------------------------------------- ---------- -------------- ------
ARPU (including in-roaming revenue)
(NIS) 165 158 166
------------------------------------- ---------- -------------- ------
*T
* Following a restatement of approximately 10,000 subscribers at
end of Q2 2008.
(1) See "Use of Non-GAAP Financial Measures" below (p9)
(2) Equivalent to 42.8% of service revenues in Q3 2008, compared
with 38.5% of service revenues in Q3 2007
(3) Cash flows generated from operating activities, net of cash
flows from investing activities
(4) Convenience translation of the Nominal New Israeli Shekel
(NIS) into US Dollars based on the rate of exchange: US $ 1.00 equals
NIS 3.7.
(5 )Following a restatement of approximately 10,000 subscribers at
end of Q2 2008.
(6) Convenience translation of the Nominal New Israeli Shekel
(NIS) into US Dollars based on the rate of exchange: US $ 1.00 equals
NIS 3.7.
--30--CM/lo*
CONTACT: Partner Communications
Mr. Emanuel Avner
Chief Financial Officer
Tel: +972-54-7814951
Fax: +972-54-7815961
E-mail: emanuel.avner@orange.co.il
or
Mr. Oded Degany
V. P. Corporate Development, Strategy and IR
Tel: +972-54-7814151
Fax: +972-54 -7814161
E-mail: oded.degany@orange.co.il