1.
|
Cellcom Israel Announces Third Quarter 2017 Results
|
2.
|
Cellcom Israel Ltd. and Subsidiaries - Condensed Consolidated Interim Financial Statements as at September 30, 2017 (Unaudited)
|
§ |
Total Revenues totaled NIS 975 million ($276 million) compared to NIS 992 million ($281 million) in the third quarter last year, a decrease of 1.7%
|
§ |
Service revenues totaled NIS 737 million ($209 million) compared to NIS 758 million ($215 million) in the third quarter last year, a decrease of 2.8%
|
§ |
Operating income totaled NIS 83 million ($23 million) compared to NIS 73 million ($21 million) in the third quarter last year, an increase of 13.7%
|
§ |
Net income totaled NIS 32 million ($9 million) compared to NIS 33 million ($9 million) in the third quarter last year, a decrease of 3.0%
|
§ |
Net income margin 3.3%, same as the third quarter last year
|
§ |
EBITDA1 totaled NIS 226 million ($64 million) compared to NIS 209 million ($59 million) in the third quarter last year, an increase of 8.1%
|
§ |
EBITDA margin 23.2%, an increase from 21.1% in the third quarter last year
|
§ |
Net cash from operating activities totaled NIS 205 million ($58 million) compared to NIS 160 million ($45 million) in the third quarter last year, an increase of 28.1%
|
§ |
Free cash flow1 totaled NIS 105 million ($30 million) compared to NIS 81 million ($23 million) in the third quarter last year, an increase of 29.6%
|
§ |
Cellular subscriber base totaled approximately 2.805 million subscribers (at the end of September 2017)
|
Q3/2017
|
Q3/2016
|
Change%
|
Q3/2017
|
Q3/2016
|
|
NIS million
|
US$ million
(convenience translation) |
||||
Total revenues
|
975
|
992
|
(1.7)%
|
276
|
281
|
Operating Income
|
83
|
73
|
13.7%
|
23
|
21
|
Net Income
|
32
|
33
|
(3.0)%
|
9
|
9
|
Free cash flow
|
105
|
81
|
29.6%
|
30
|
23
|
EBITDA
|
226
|
209
|
8.1%
|
64
|
59
|
EBITDA, as percent of total revenues
|
23.2%
|
21.1%
|
10.0%
|
Cellular (*)
|
Fixed-line (**)
|
Inter-segment adjustments
(***)
|
Consolidated results
|
||||||||
NIS million
|
Q3'17
|
Q3'16
|
Change
%
|
Q3'17
|
Q3'16
|
Change
%
|
Q3'17
|
Q3'16
|
Q3'17
|
Q3'16
|
Change
%
|
Total revenues
|
679
|
729
|
(6.9)%
|
339
|
315
|
7.6%
|
(43)
|
(52)
|
975
|
992
|
(1.7)%
|
Service revenues
|
488
|
534
|
(8.6)%
|
292
|
276
|
5.8%
|
(43)
|
(52)
|
737
|
758
|
(2.8)%
|
Equipment revenues
|
191
|
195
|
(2.1)%
|
47
|
39
|
20.5%
|
-
|
-
|
238
|
234
|
1.7%
|
EBITDA
|
160
|
149
|
7.4%
|
66
|
60
|
10.0%
|
-
|
-
|
226
|
209
|
8.1%
|
EBITDA, as percent of total revenues
|
23.6%
|
20.4%
|
15.7%
|
19.5%
|
19.0%
|
2.6%
|
23.2%
|
21.1%
|
10.0%
|
(*) |
The segment includes the cellular communications services, end user cellular equipment and supplemental services.
|
(**) |
The segment includes landline telephony services, internet infrastructure and connectivity services, television services, end user fixed-line equipment and supplemental services.
|
Q3/2017
|
Q3/2016
|
Change (%)
|
|
Cellular subscribers at the end of period (in thousands)
|
2,805
|
2,822
|
(0.6)%
|
Churn Rate for cellular subscribers (in %)
|
11.5%
|
10.5%
|
9.5%
|
Monthly cellular ARPU (in NIS)
|
57.8
|
62.8
|
(8.0)%
|
Q3/2017
|
Q3/2016
|
Change (%)
|
|
Internet infrastructure field- households at the end of period (in thousands)
|
206
|
146
|
41.1%
|
TV field- households at the end of period (in thousands)
|
154
|
99
|
55.6%
|
(1)
|
has begun extending its existing independent fiber optic infrastructure into residential areas;
|
(2)
|
is holding negotiations with Partner Communications Company Ltd., or Partner, another Israeli telecommunications operator, regarding a potential long term cooperation agreement for the deployment of optic fiber infrastructure by both companies, whereby each party will be entitled to purchase from time to time, as per its needs and at its sole discretion, fiber optic infrastructure services (including Indefeasible Right of Use - IRU) in the other party's present and/or future fiber optics infrastructure in order to connect residential buildings throughout Israel. The agreement, if concluded and executed, will allow the companies to avoid duplicated future deployment, as well as allow the Company to reduce costs while improving its ability to provide quality services. The effect of the agreement on the Company's results of operations, if concluded and executed, is subject to the actual cooperation executed. The finalization of the agreement is subject to further negotiations between the parties and if concluded, the execution of the agreement will be subject to the required regulatory approvals. There is no assurance that the negotiations will be concluded nor that regulatory approvals will be received or that the agreement will be executed; and
|
(3)
|
continues to advance its assessment of investing in IBC, including the changes the Company requires for such an investment to materialize. In that respect, the Company has reached preliminary understandings with IEC, regarding an update of IEC's services prices to IBC, if the Company invests in IBC. The Company intends to issue a non-binding letter of intent for investing (by itself or with a group of investors it may arrange) in IBC in the near future, subject to certain conditions being met. Such an investment, if concluded and executed, may entail substantial investments in IBC's operations. There is no assurance that the Company and IBC will enter negotiations, that such negotiations if conducted shall be concluded into a binding agreement, or that such agreement, if entered, will receive the necessary regulatory approvals or be executed, nor as to whether an agreement with IEC will be concluded. |
Company Contact
Shlomi Fruhling
Chief Financial Officer
investors@cellcom.co.il
Tel: +972 52 998 9735
|
Investor Relations Contact
Ehud Helft
GK Investor & Public Relations
cellcom@GKIR.com
Tel: +1 617 418 3096
|
Convenience
|
||||||||||||||||
translation
|
||||||||||||||||
into US dollar
|
||||||||||||||||
September 30,
|
September 30,
|
September 30,
|
December 31,
|
|||||||||||||
2016
|
2017
|
2017
|
2016
|
|||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
1,026
|
461
|
131
|
1,240
|
||||||||||||
Current investments, including derivatives
|
286
|
363
|
103
|
284
|
||||||||||||
Trade receivables
|
1,307
|
1,265
|
358
|
1,325
|
||||||||||||
Current tax assets
|
-
|
1
|
-
|
25
|
||||||||||||
Other receivables
|
88
|
80
|
23
|
61
|
||||||||||||
Inventory
|
56
|
57
|
16
|
64
|
||||||||||||
Total current assets
|
2,763
|
2,227
|
631
|
2,999
|
||||||||||||
Trade and other receivables
|
811
|
912
|
258
|
796
|
||||||||||||
Property, plant and equipment, net
|
1,660
|
1,597
|
453
|
1,659
|
||||||||||||
Intangible assets and others, net
|
1,213
|
1,247
|
353
|
1,207
|
||||||||||||
Deferred tax assets
|
3
|
-
|
-
|
1
|
||||||||||||
Total non- current assets
|
3,687
|
3,756
|
1,064
|
3,663
|
||||||||||||
Total assets
|
6,450
|
5,983
|
1,695
|
6,662
|
||||||||||||
Liabilities
|
||||||||||||||||
Current maturities of debentures and of loans from financial institutions
|
865
|
617
|
175
|
863
|
||||||||||||
Trade payables and accrued expenses
|
687
|
590
|
167
|
675
|
||||||||||||
Current tax liabilities
|
-
|
3
|
1
|
-
|
||||||||||||
Provisions
|
108
|
113
|
32
|
108
|
||||||||||||
Other payables, including derivatives
|
200
|
219
|
62
|
279
|
||||||||||||
Total current liabilities
|
1,860
|
1,542
|
437
|
1,925
|
||||||||||||
Long-term loans from financial institutions
|
200
|
462
|
131
|
340
|
||||||||||||
Debentures
|
2,860
|
2,353
|
667
|
2,866
|
||||||||||||
Provisions
|
30
|
20
|
6
|
30
|
||||||||||||
Other long-term liabilities
|
29
|
34
|
10
|
31
|
||||||||||||
Liability for employee rights upon retirement, net
|
11
|
12
|
3
|
12
|
||||||||||||
Deferred tax liabilities
|
135
|
129
|
36
|
118
|
||||||||||||
Total non- current liabilities
|
3,265
|
3,010
|
853
|
3,397
|
||||||||||||
Total liabilities
|
5,125
|
4,552
|
1,290
|
5,322
|
||||||||||||
Equity attributable to owners of the Company
|
||||||||||||||||
Share capital
|
1
|
1
|
-
|
1
|
||||||||||||
Cash flow hedge reserve
|
(1
|
)
|
-
|
-
|
(1
|
)
|
||||||||||
Retained earnings
|
1,309
|
1,426
|
404
|
1,322
|
||||||||||||
Non-controlling interests
|
16
|
4
|
1
|
18
|
||||||||||||
Total equity
|
1,325
|
1,431
|
405
|
1,340
|
||||||||||||
Total liabilities and equity
|
6,450
|
5,983
|
1,695
|
6,662
|
||||||||||||
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
For the nine
months ended September 30, |
For the nine
months ended September 30, |
For the three
months ended September 30, |
For the three
months ended September 30, |
For the
year ended December 31, |
||||||||||||||||||||||||
2016
|
2017
|
2017
|
2016
|
2017
|
2017
|
2016
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
Revenues
|
3,043
|
2,896
|
821
|
992
|
975
|
276
|
4,027
|
|||||||||||||||||||||
Cost of revenues
|
(2,005
|
)
|
(2,000
|
)
|
(567
|
)
|
(669
|
)
|
(670
|
)
|
(190
|
)
|
(2,702
|
)
|
||||||||||||||
Gross profit
|
1,038
|
896
|
254
|
323
|
305
|
86
|
1,325
|
|||||||||||||||||||||
Selling and marketing expenses
|
(432
|
)
|
(343
|
)
|
(97
|
)
|
(141
|
)
|
(117
|
)
|
(33
|
)
|
(574
|
)
|
||||||||||||||
General and administrative expenses
|
(311
|
)
|
(313
|
)
|
(89
|
)
|
(106
|
)
|
(105
|
)
|
(30
|
)
|
(420
|
)
|
||||||||||||||
Other income (expenses), net
|
(17
|
)
|
12
|
3
|
(3
|
)
|
-
|
-
|
(21
|
)
|
||||||||||||||||||
Operating profit
|
278
|
252
|
71
|
73
|
83
|
23
|
310
|
|||||||||||||||||||||
Financing income
|
39
|
38
|
11
|
12
|
12
|
3
|
46
|
|||||||||||||||||||||
Financing expenses
|
(149
|
)
|
(152
|
)
|
(43
|
)
|
(54
|
)
|
(51
|
)
|
(14
|
)
|
(196
|
)
|
||||||||||||||
Financing expenses, net
|
(110
|
)
|
(114
|
)
|
(32
|
)
|
(42
|
)
|
(39
|
)
|
(11
|
)
|
(150
|
)
|
||||||||||||||
Profit before taxes on income
|
168
|
138
|
39
|
31
|
44
|
12
|
160
|
|||||||||||||||||||||
Tax benefit (taxes on income)
|
(32
|
)
|
(35
|
)
|
(10
|
)
|
2
|
(12
|
)
|
(3
|
)
|
(10
|
)
|
|||||||||||||||
Profit for the period
|
136
|
103
|
29
|
33
|
32
|
9
|
150
|
|||||||||||||||||||||
Attributable to:
|
||||||||||||||||||||||||||||
Owners of the Company
|
135
|
102
|
29
|
33
|
32
|
9
|
148
|
|||||||||||||||||||||
Non-controlling interests
|
1
|
1
|
-
|
-
|
-
|
-
|
2
|
|||||||||||||||||||||
Profit for the period
|
136
|
103
|
29
|
33
|
32
|
9
|
150
|
|||||||||||||||||||||
Earnings per share
|
||||||||||||||||||||||||||||
Basic earnings per share (in NIS)
|
1.34
|
1.02
|
0.29
|
0.33
|
0.32
|
0.09
|
1.47
|
|||||||||||||||||||||
Diluted earnings per share (in NIS)
|
1.34
|
1.02
|
0.29
|
0.33
|
0.32
|
0.09
|
1.47
|
|||||||||||||||||||||
Weighted-average number of shares used in the calculation of basic earnings per share (in shares)
|
100,604,578
|
100,609,241
|
100,609,241
|
100,604,578
|
100,616,595
|
100,616,595
|
100,604,578
|
|||||||||||||||||||||
Weighted-average number of shares used in the calculation of diluted earnings per share (in shares)
|
100,646,549
|
101,225,178
|
101,225,178
|
100,677,621
|
101,083,971
|
101,083,971
|
100,698,306
|
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
For the nine
months ended September 30, |
For the nine
months ended September 30, |
For the three
months ended September 30, |
For the three
months ended September 30, |
For the
year ended December 31, |
||||||||||||||||||||||||
2016
|
2017
|
2017
|
2016
|
2017
|
2017
|
2016
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
Cash flows from operating activities
|
||||||||||||||||||||||||||||
Profit for the period
|
136
|
103
|
29
|
33
|
32
|
9
|
150
|
|||||||||||||||||||||
Adjustments for:
|
||||||||||||||||||||||||||||
Depreciation and amortization
|
398
|
412
|
117
|
131
|
143
|
41
|
534
|
|||||||||||||||||||||
Share based payments
|
4
|
2
|
1
|
1
|
-
|
-
|
6
|
|||||||||||||||||||||
Loss (gain) on sale of property, plant and equipment
|
6
|
(2
|
)
|
-
|
3
|
-
|
-
|
10
|
||||||||||||||||||||
Gain on sale of shares in a consolidated company
|
-
|
(10
|
)
|
(3
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||
Income tax expense (tax benefit)
|
32
|
35
|
10
|
(2
|
)
|
12
|
3
|
10
|
||||||||||||||||||||
Financing expenses, net
|
110
|
114
|
32
|
42
|
39
|
11
|
150
|
|||||||||||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||||||||||||||
Change in inventory
|
29
|
7
|
2
|
7
|
4
|
1
|
21
|
|||||||||||||||||||||
Change in trade receivables (including long-term amounts)
|
(38
|
)
|
118
|
33
|
37
|
14
|
4
|
(28
|
)
|
|||||||||||||||||||
Change in other receivables (including long-term amounts)
|
(19
|
)
|
(185
|
)
|
(52
|
)
|
(34
|
)
|
(19
|
)
|
(5
|
)
|
(5
|
)
|
||||||||||||||
Changes in trade payables, accrued expenses and provisions
|
44
|
(34
|
)
|
(10
|
)
|
14
|
(59
|
)
|
(17
|
)
|
-
|
|||||||||||||||||
Change in other liabilities (including long-term amounts)
|
(26
|
)
|
(3
|
)
|
(1
|
)
|
(49
|
)
|
10
|
3
|
20
|
|||||||||||||||||
Payments for derivative instruments, net
|
-
|
(3
|
)
|
(1
|
)
|
-
|
(3
|
)
|
(1
|
)
|
-
|
|||||||||||||||||
Income tax paid
|
(73
|
)
|
(35
|
)
|
(10
|
)
|
(23
|
)
|
(9
|
)
|
(3
|
)
|
(88
|
)
|
||||||||||||||
Income tax received
|
-
|
41
|
12
|
-
|
41
|
12
|
1
|
|||||||||||||||||||||
Net cash from operating activities
|
603
|
560
|
159
|
160
|
205
|
58
|
781
|
|||||||||||||||||||||
Cash flows from investing activities
|
||||||||||||||||||||||||||||
Acquisition of property, plant, and equipment
|
(217
|
)
|
(274
|
)
|
(78
|
)
|
(66
|
)
|
(37
|
)
|
(10
|
)
|
(295
|
)
|
||||||||||||||
Additions to intangible assets and others
|
(55
|
)
|
(171
|
)
|
(49
|
)
|
(14
|
)
|
(77
|
)
|
(22
|
)
|
(73
|
)
|
||||||||||||||
Change in current investments, net
|
(7
|
)
|
(79
|
)
|
(22
|
)
|
(3
|
)
|
(3
|
)
|
(1
|
)
|
(9
|
)
|
||||||||||||||
Payments for other derivative contracts, net
|
-
|
-
|
-
|
-
|
3
|
1
|
-
|
|||||||||||||||||||||
Proceeds from sale of property, plant and equipment
|
2
|
-
|
-
|
1
|
-
|
-
|
2
|
|||||||||||||||||||||
Interest received
|
9
|
10
|
3
|
2
|
2
|
-
|
11
|
|||||||||||||||||||||
Proceeds from sale of shares in a consolidated company, net of cash disposed
|
-
|
3
|
1
|
-
|
11
|
3
|
-
|
|||||||||||||||||||||
Net cash used in investing activities
|
(268
|
)
|
(511
|
)
|
(145
|
)
|
(80
|
)
|
(101
|
)
|
(29
|
)
|
(364
|
)
|
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
For the nine
months ended September 30, |
For the nine
months ended September 30, |
For the three
months ended September 30, |
For the three
months ended September 30, |
For the
year ended December 31, |
||||||||||||||||||||||||
2016
|
2017
|
2017
|
2016
|
2017
|
2017
|
2016
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
Cash flows from financing activities
|
||||||||||||||||||||||||||||
Payments for derivative contracts, net
|
(10
|
)
|
(3
|
)
|
(1
|
)
|
(4
|
)
|
(3
|
)
|
(1
|
)
|
(13
|
)
|
||||||||||||||
Receipt of long term loans from financial institutions
|
200
|
200
|
57
|
-
|
-
|
-
|
340
|
|||||||||||||||||||||
Repayment of debentures
|
(732
|
)
|
(864
|
)
|
(245
|
)
|
(347
|
)
|
(350
|
)
|
(99
|
)
|
(732
|
)
|
||||||||||||||
Proceeds from issuance of debentures, net of issuance costs
|
653
|
-
|
-
|
403
|
-
|
-
|
653
|
|||||||||||||||||||||
Dividend paid
|
(1
|
)
|
(1
|
)
|
-
|
-
|
(1
|
)
|
-
|
(1
|
)
|
|||||||||||||||||
Interest paid
|
(180
|
)
|
(160
|
)
|
(45
|
)
|
(88
|
)
|
(74
|
)
|
(21
|
)
|
(185
|
)
|
||||||||||||||
Net cash from (used in) financing activities
|
(70
|
)
|
(828
|
)
|
(234
|
)
|
(36
|
)
|
(428
|
)
|
(121
|
)
|
62
|
|||||||||||||||
Changes in cash and cash equivalents
|
265
|
(779
|
)
|
(220
|
)
|
44
|
(324
|
)
|
(92
|
)
|
479
|
|||||||||||||||||
Cash and cash equivalents as at the beginning of the period
|
761
|
1,240
|
351
|
982
|
785
|
223
|
761
|
|||||||||||||||||||||
Cash and cash equivalents as at the end of the period
|
1,026
|
461
|
131
|
1,026
|
461
|
131
|
1,240
|
Three-month period ended
September 30,
|
Year ended
December 31,
|
|||||||||||||||
Convenience
translation
into US dollar
|
||||||||||||||||
2016
|
2017
|
2017
|
2016
|
|||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||
Profit for the period
|
33
|
32
|
9
|
150
|
||||||||||||
Taxes on income (tax benefit)
|
(2
|
)
|
12
|
3
|
10
|
|||||||||||
Financing income
|
(12
|
)
|
(12
|
)
|
(3
|
)
|
(46
|
)
|
||||||||
Financing expenses
|
54
|
51
|
14
|
196
|
||||||||||||
Other expenses
|
4
|
-
|
-
|
8
|
||||||||||||
Depreciation and amortization
|
131
|
143
|
41
|
534
|
||||||||||||
Share based payments
|
1
|
-
|
-
|
6
|
||||||||||||
EBITDA
|
209
|
226
|
64
|
858
|
Three-month period ended
September 30,
|
Year ended
December 31,
|
|||||||||||||||
Convenience
translation
into US dollar
|
||||||||||||||||
2016
|
2017
|
2017
|
2016
|
|||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||
Cash flows from operating activities(*)
|
160
|
205
|
58
|
781
|
||||||||||||
Cash flows from investing activities
|
(80
|
)
|
(101
|
)
|
(28
|
)
|
(364
|
)
|
||||||||
Sale of short-term tradable debentures and deposits(**)
|
1
|
1
|
-
|
(1
|
)
|
|||||||||||
Free cash flow
|
81
|
105
|
30
|
416
|
NIS millions unless otherwise stated
|
Q1-2016
|
Q2-2016
|
Q3-2016
|
Q4-2016
|
Q1-2017
|
Q2-2017
|
Q3-2017
|
FY-2016
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Cellular service revenues
|
559
|
567
|
534
|
502
|
509
|
481
|
488
|
2,162
|
||||||||||||||||||||||||
Fixed-line service revenues
|
264
|
264
|
276
|
267
|
279
|
292
|
292
|
1,071
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Cellular equipment revenues
|
219
|
217
|
195
|
205
|
183
|
192
|
191
|
836
|
||||||||||||||||||||||||
Fixed-line equipment revenues
|
29
|
30
|
39
|
60
|
37
|
39
|
47
|
158
|
||||||||||||||||||||||||
Consolidation adjustments
|
(49
|
)
|
(49
|
)
|
(52
|
)
|
(50
|
)
|
(49
|
)
|
(42
|
)
|
(43
|
)
|
(200
|
)
|
||||||||||||||||
Total revenues
|
1,022
|
1,029
|
992
|
984
|
959
|
962
|
975
|
4,027
|
||||||||||||||||||||||||
Cellular EBITDA
|
178
|
181
|
149
|
117
|
159
|
158
|
160
|
625
|
||||||||||||||||||||||||
Fixed-line EBITDA
|
60
|
57
|
60
|
56
|
42
|
79
|
66
|
233
|
||||||||||||||||||||||||
Total EBITDA
|
238
|
238
|
209
|
173
|
201
|
237
|
226
|
858
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Operating profit
|
101
|
104
|
73
|
32
|
67
|
102
|
83
|
310
|
||||||||||||||||||||||||
Financing expenses, net
|
24
|
44
|
42
|
40
|
31
|
44
|
39
|
150
|
||||||||||||||||||||||||
Profit for the period
|
59
|
44
|
33
|
14
|
26
|
45
|
32
|
150
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Free cash flow
|
149
|
103
|
81
|
83
|
66
|
77
|
105
|
416
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Cellular subscribers at the end of period (in 000's)
|
2,813
|
2,812
|
2,822
|
2,801
|
2,792
|
2,779
|
2,805
|
2,801
|
||||||||||||||||||||||||
Monthly cellular ARPU (in NIS)
|
65.2
|
66.0
|
62.8
|
59.3
|
60.2
|
57.0
|
57.8
|
63.3
|
||||||||||||||||||||||||
Churn rate for cellular subscribers (%)
|
11.1
|
%
|
10.6
|
%
|
10.5
|
%
|
10.4
|
%
|
12.0
|
%
|
10.8
|
%
|
11.5
|
%
|
42.4
|
%
|
Series
|
Original Issuance Date
|
Principal on the Date of Issuance
|
As of 30.09.2017
|
As of 21.11.2017
|
Interest Rate (fixed)
|
Principal Repayment Dates
|
Interest Repayment Dates (3)
|
Linkage
|
Trustee
Contact Details
|
||||||
Principal
Balance on Trade
|
Linked Principal Balance
|
Interest Accumulated in Books
|
Debenture Balance Value in Books (2)
|
Market Value
|
Principal Balance on Trade
|
Linked Principal Balance
|
From
|
To
|
|||||||
F (4)(5)(6) **
|
20/03/12
|
714.802
|
643.322
|
658.520
|
7.212
|
665.732
|
694.788
|
643.322
|
661.061
|
4.60%
|
05.01.17
|
05.01.20
|
January-5
and July-5
|
Linked to CPI
|
Strauss Lazar Trust Company (1992) Ltd. Ori Lazar. 17 Yizhak Sadeh St., Tel Aviv. Tel: 03- 6237777.
|
G (4)(5)(6)
|
20/03/12
|
285.198
|
228.158
|
228.227
|
3.801
|
232.028
|
240.707
|
228.158
|
228.213
|
6.99%
|
05.01.17
|
05.01.19
|
January-5
and July-5
|
Not linked
|
Strauss Lazar Trust Company (1992) Ltd. Ori Lazar. 17 Yizhak Sadeh St., Tel Aviv. Tel: 03- 6237777.
|
H (4)(5)(7)**
|
08/07/14
03/02/15*
11/02/15*
|
949.624
|
949.624
|
842.222
|
4.482
|
846.704
|
982.291
|
949.624
|
846.377
|
1.98%
|
05.07.18
|
05.07.24
|
January-5
and July-5
|
Linked to CPI
|
Mishmeret Trust Company Ltd. Rami Sebty. 48 Menachem Begin Rd. Tel Aviv. Tel: 03-6374355.
|
I (4)(5)(7)**
|
08/07/14
03/02/15*
11/02/15*
30/03/16*
|
804.010
|
804.010
|
759.188
|
7.934
|
767.122
|
894.863
|
804.010
|
760.662
|
4.14%
|
05.07.18
|
05.07.25
|
January-5
and July-5
|
Not linked
|
Mishmeret Trust Company Ltd. Rami Sebty. 48 Menachem Begin Rd. Tel Aviv. Tel: 03-6374355.
|
J (4)(5)
|
26/09/16
|
103.267
|
103.267
|
102.314
|
0.603
|
102.917
|
110.506
|
103.267
|
102.640
|
2.45%
|
05.07.21
|
05.07.26
|
January-5 and July-5
|
Linked to CPI
|
Mishmeret Trust Company Ltd. Rami Sebty. 48 Menachem Begin Rd. Tel Aviv. Tel: 03-6374355.
|
K (4)(5)**
|
26/09/16
|
303.971
|
303.971
|
301.076
|
2.572
|
303.648
|
329.140
|
303.971
|
301.146
|
3.55%
|
05.07.21
|
05.07.26
|
January-5 and July-5
|
Not linked
|
Mishmeret Trust Company Ltd. Rami Sebty. 48 Menachem Begin Rd. Tel Aviv. Tel: 03-6374355.
|
Total
|
|
3,160.872
|
3,032.352
|
2,891.547
|
26.604
|
2,918.151
|
3,252.295
|
3,032.352
|
2,900.099
|
|
|
|
|
|
|
Series
|
Rating Company
|
Rating as of 30.09.2017 (1)
|
Rating as of 21.11.2017
|
Rating assigned upon issuance of the Series
|
Recent date of rating as of 21.11.2017
|
Additional ratings between original issuance and the recent date of rating as of 21.11.2017 (2)
|
|
|
Rating
|
||||||
F
|
S&P Maalot
|
A+
|
A+
|
AA
|
06/2017
|
5/2012, 11/2012, 6/2013, 6/2014, 8/2014, 1/2015, 9/2015, 3/2016, 08/2016, 06/2017
|
AA,AA-,A+ (2)
|
G
|
S&P Maalot
|
A+
|
A+
|
AA
|
06/2017
|
5/2012, 11/2012, 6/2013, 6/2014, 8/2014, 1/2015, 9/2015, 3/2016, 08/2016, 06/2017
|
AA,AA-,A+ (2)
|
H
|
S&P Maalot
|
A+
|
A+
|
A+
|
06/2017
|
6/2014, 8/2014, 1/2015, 9/2015, 3/2016, 08/2016, 06/2017
|
A+ (2)
|
I
|
S&P Maalot
|
A+
|
A+
|
A+
|
06/2017
|
6/2014, 8/2014, 1/2015, 9/2015, 3/2016, 08/2016, 06/2017
|
A+ (2)
|
J
|
S&P Maalot
|
A+
|
A+
|
A+
|
06/2017
|
08/2016, 06/2017
|
A+ (2)
|
K
|
S&P Maalot
|
A+
|
A+
|
A+
|
06/2017
|
08/2016, 06/2017
|
A+ (2)
|
(1) |
In June 2017, S&P Maalot affirmed the Company's rating of “ilA+/stable”.
|
(2) |
In May 2012, S&P Maalot updated the Company's rating from an "ilAA/negative" to an “ilAA-/negative”. In November 2012, S&P Maalot affirmed the Company's rating of “ilAA-/negative”. In June 2013, S&P Maalot updated the Company's rating from an "ilAA-/negative" to an “ilA+/stable”. In June 2014, August 2014, January 2015, September 2015, March 2016, August 2016 and June 2017, S&P Maalot affirmed the Company's rating of “ilA+/stable”. For details regarding the rating of the debentures see the S&P Maalot report dated June 1, 2017.
|
a. |
Debentures issued to the public by the Company and held by the public, excluding such debentures held by the Company's parent company, by a controlling shareholder, by companies controlled by them, or by companies controlled by the Company, based on the Company's "Solo" financial data (in thousand NIS).
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||||||||||||||||||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||||||||||||||||||||
First year
|
331,915
|
222,317
|
-
|
-
|
-
|
101,159
|
||||||||||||||||||
Second year
|
331,915
|
165,514
|
-
|
-
|
-
|
77,589
|
||||||||||||||||||
Third year
|
331,915
|
80,310
|
-
|
-
|
-
|
58,983
|
||||||||||||||||||
Fourth year
|
166,114
|
157,527
|
-
|
-
|
-
|
48,386
|
||||||||||||||||||
Fifth year and on
|
539,031
|
705,266
|
-
|
-
|
-
|
100,013
|
||||||||||||||||||
Total
|
1,700,891
|
1,330,934
|
-
|
-
|
-
|
386,130
|
b. |
Private debentures and other non-bank credit, excluding such debentures held by the Company's parent company, by a controlling shareholder, by companies controlled by them, or by companies controlled by the Company, based on the Company's "Solo" financial data (in thousand NIS).
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||||||||||||||||||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||||||||||||||||||||
First year
|
-
|
50,000
|
-
|
-
|
-
|
19,400
|
||||||||||||||||||
Second year
|
-
|
100,000
|
-
|
-
|
-
|
17,100
|
||||||||||||||||||
Third year
|
-
|
100,000
|
-
|
-
|
-
|
12,267
|
||||||||||||||||||
Fourth year
|
-
|
100,000
|
-
|
-
|
-
|
7,390
|
||||||||||||||||||
Fifth year and on
|
-
|
50,000
|
-
|
-
|
-
|
2,550
|
||||||||||||||||||
Total
|
-
|
400,000
|
-
|
-
|
-
|
58,707
|
c. |
Credit from banks in Israel based on the Company's "Solo" financial data (in thousand NIS).
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||||||||||||||||||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||||||||||||||||||||
First year
|
-
|
28,000
|
-
|
-
|
-
|
6,860
|
||||||||||||||||||
Second year
|
-
|
28,000
|
-
|
-
|
-
|
5,488
|
||||||||||||||||||
Third year
|
-
|
28,000
|
-
|
-
|
-
|
4,122
|
||||||||||||||||||
Fourth year
|
-
|
28,000
|
-
|
-
|
-
|
2,740
|
||||||||||||||||||
Fifth year and on
|
-
|
28,000
|
-
|
-
|
-
|
1,372
|
||||||||||||||||||
Total
|
-
|
140,000
|
-
|
-
|
-
|
20,582
|
d. |
Credit from banks abroad based on the Company's "Solo" financial data (in thousand NIS) - None.
|
e. |
Total of sections a - d above, total credit from banks, non-bank credit and debentures based on the Company's "Solo" financial data (in thousand NIS).
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||||||||||||||||||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||||||||||||||||||||
First year
|
331,915
|
300,317
|
-
|
-
|
-
|
127,419
|
||||||||||||||||||
Second year
|
331,915
|
293,514
|
-
|
-
|
-
|
100,177
|
||||||||||||||||||
Third year
|
331,915
|
208,310
|
-
|
-
|
-
|
75,371
|
||||||||||||||||||
Fourth year
|
166,114
|
285,527
|
-
|
-
|
-
|
58,516
|
||||||||||||||||||
Fifth year and on
|
539,031
|
783,266
|
-
|
-
|
-
|
103,935
|
||||||||||||||||||
Total
|
1,700,891
|
1,870,934
|
-
|
-
|
-
|
465,419
|
f. |
Out of the balance sheet Credit exposure based on the Company's "Solo" financial data - None.
|
g. |
Out of the 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 (in thousand NIS) - None.
|
h. |
Total balances of the credit from banks, non-bank credit and debentures of all the consolidated companies, excluding companies that are reporting corporations and excluding Company's data presented in sections a - d above (in thousand NIS) - None.
|
i. |
Total balances of credit granted to the Company by the parent company or a controlling shareholder and balances of debentures offered by the Company held by the parent company or the controlling shareholder (in thousand NIS) - 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 debentures offered by the Company held by companies held by the parent company or the controlling shareholder, which are not controlled by the Company (in thousand NIS).
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||||||||||||||||||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||||||||||||||||||||
First year
|
1,297
|
683
|
-
|
-
|
-
|
430
|
||||||||||||||||||
Second year
|
1,297
|
446
|
-
|
-
|
-
|
354
|
||||||||||||||||||
Third year
|
1,297
|
91
|
-
|
-
|
-
|
300
|
||||||||||||||||||
Fourth year
|
1,316
|
630
|
-
|
-
|
-
|
269
|
||||||||||||||||||
Fifth year and on
|
4,565
|
3,355
|
-
|
-
|
-
|
605
|
||||||||||||||||||
Total
|
9,771
|
5,205
|
-
|
-
|
-
|
1,957
|
k. |
Total balances of credit granted to the Company by consolidated companies and balances of debentures offered by the Company held by the consolidated companies (in thousand NIS) - None.
|
Cellcom Israel Ltd.
and Subsidiaries
Condensed Consolidated
Interim Financial Statements
As at September 30, 2017
(Unaudited)
|
Page | |
2
|
|
3
|
|
4
|
|
5
|
|
8
|
|
10
|
Convenience
|
||||||||||||||||
translation
|
||||||||||||||||
into US dollar
|
||||||||||||||||
(Note 2D)
|
||||||||||||||||
September 30,
|
September 30,
|
September 30,
|
December 31,
|
|||||||||||||
2016
|
2017*
|
|
2017*
|
|
2016
|
|||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
1,026
|
461
|
131
|
1,240
|
||||||||||||
Current investments, including derivatives
|
286
|
363
|
103
|
284
|
||||||||||||
Trade receivables
|
1,307
|
1,265
|
358
|
1,325
|
||||||||||||
Current tax assets
|
-
|
1
|
-
|
25
|
||||||||||||
Other receivables
|
88
|
80
|
23
|
61
|
||||||||||||
Inventory
|
56
|
57
|
16
|
64
|
||||||||||||
Total current assets
|
2,763
|
2,227
|
631
|
2,999
|
||||||||||||
Trade and other receivables
|
811
|
912
|
258
|
796
|
||||||||||||
Property, plant and equipment, net
|
1,660
|
1,597
|
453
|
1,659
|
||||||||||||
Intangible assets and others, net
|
1,213
|
1,247
|
353
|
1,207
|
||||||||||||
Deferred tax assets
|
3
|
-
|
-
|
1
|
||||||||||||
Total non- current assets
|
3,687
|
3,756
|
1,064
|
3,663
|
||||||||||||
Total assets
|
6,450
|
5,983
|
1,695
|
6,662
|
||||||||||||
Liabilities
|
||||||||||||||||
Current maturities of debentures and of loans from financial institutions
|
865
|
617
|
175
|
863
|
||||||||||||
Trade payables and accrued expenses
|
687
|
590
|
167
|
675
|
||||||||||||
Current tax liabilities
|
-
|
3
|
1
|
-
|
||||||||||||
Provisions
|
108
|
113
|
32
|
108
|
||||||||||||
Other payables, including derivatives
|
200
|
219
|
62
|
279
|
||||||||||||
Total current liabilities
|
1,860
|
1,542
|
437
|
1,925
|
||||||||||||
Long-term loans from financial institutions
|
200
|
462
|
131
|
340
|
||||||||||||
Debentures
|
2,860
|
2,353
|
667
|
2,866
|
||||||||||||
Provisions
|
30
|
20
|
6
|
30
|
||||||||||||
Other long-term liabilities
|
29
|
34
|
10
|
31
|
||||||||||||
Liability for employee rights upon retirement, net
|
11
|
12
|
3
|
12
|
||||||||||||
Deferred tax liabilities
|
135
|
129
|
36
|
118
|
||||||||||||
Total non- current liabilities
|
3,265
|
3,010
|
853
|
3,397
|
||||||||||||
Total liabilities
|
5,125
|
4,552
|
1,290
|
5,322
|
||||||||||||
Equity attributable to owners of the Company
|
||||||||||||||||
Share capital
|
1
|
1
|
-
|
1
|
||||||||||||
Cash flow hedge reserve
|
(1
|
)
|
-
|
-
|
(1
|
)
|
||||||||||
Retained earnings
|
1,309
|
1,426
|
404
|
1,322
|
||||||||||||
Non-controlling interests
|
16
|
4
|
1
|
18
|
||||||||||||
Total equity
|
1,325
|
1,431
|
405
|
1,340
|
||||||||||||
Total liabilities and equity
|
6,450
|
5,983
|
1,695
|
6,662
|
Date of approval of the condensed consolidated financial statements: November 21, 2017.
|
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
(Note 2D)
|
(Note 2D)
|
|||||||||||||||||||||||||||
For the nine
months ended September 30, |
For the nine
months ended September 30, |
For the three
months ended September 30, |
For the three
months ended September 30, |
For the
year ended December 31, |
||||||||||||||||||||||||
2016
|
2017*
|
|
2017*
|
|
2016
|
2017*
|
|
2017*
|
|
2016
|
||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Revenues
|
3,043
|
2,896
|
821
|
992
|
975
|
276
|
4,027
|
|||||||||||||||||||||
Cost of revenues
|
(2,005
|
)
|
(2,000
|
)
|
(567
|
)
|
(669
|
)
|
(670
|
)
|
(190
|
)
|
(2,702
|
)
|
||||||||||||||
Gross profit
|
1,038
|
896
|
254
|
323
|
305
|
86
|
1,325
|
|||||||||||||||||||||
Selling and marketing expenses
|
(432
|
)
|
(343
|
)
|
(97
|
)
|
(141
|
)
|
(117
|
)
|
(33
|
)
|
(574
|
)
|
||||||||||||||
General and administrative expenses
|
(311
|
)
|
(313
|
)
|
(89
|
)
|
(106
|
)
|
(105
|
)
|
(30
|
)
|
(420
|
)
|
||||||||||||||
Other income (expenses), net
|
(17
|
)
|
12
|
3
|
(3
|
)
|
-
|
-
|
(21
|
)
|
||||||||||||||||||
Operating profit
|
278
|
252
|
71
|
73
|
83
|
23
|
310
|
|||||||||||||||||||||
Financing income
|
39
|
38
|
11
|
12
|
12
|
3
|
46
|
|||||||||||||||||||||
Financing expenses
|
(149
|
)
|
(152
|
)
|
(43
|
)
|
(54
|
)
|
(51
|
)
|
(14
|
)
|
(196
|
)
|
||||||||||||||
Financing expenses, net
|
(110
|
)
|
(114
|
)
|
(32
|
)
|
(42
|
)
|
(39
|
)
|
(11
|
)
|
(150
|
)
|
||||||||||||||
Profit before taxes on income
|
168
|
138
|
39
|
31
|
44
|
12
|
160
|
|||||||||||||||||||||
Tax benefit (taxes on income)
|
(32
|
)
|
(35
|
)
|
(10
|
)
|
2
|
(12
|
)
|
(3
|
)
|
(10
|
)
|
|||||||||||||||
Profit for the period
|
136
|
103
|
29
|
33
|
32
|
9
|
150
|
|||||||||||||||||||||
Attributable to:
|
||||||||||||||||||||||||||||
Owners of the Company
|
135
|
102
|
29
|
33
|
32
|
9
|
148
|
|||||||||||||||||||||
Non-controlling interests
|
1
|
1
|
-
|
-
|
-
|
-
|
2
|
|||||||||||||||||||||
Profit for the period
|
136
|
103
|
29
|
33
|
32
|
9
|
150
|
|||||||||||||||||||||
Earnings per share
|
||||||||||||||||||||||||||||
Basic earnings per share (in NIS)
|
1.34
|
1.02
|
0.29
|
0.33
|
0.32
|
0.09
|
1.47
|
|||||||||||||||||||||
Diluted earnings per share (in NIS)
|
1.34
|
1.02
|
0.29
|
0.33
|
0.32
|
0.09
|
1.47
|
|||||||||||||||||||||
Weighted-average number of shares used in the calculation of basic earnings per share (in shares)
|
100,604,578
|
100,609,241
|
100,609,241
|
100,604,578
|
100,616,595
|
100,616,595
|
100,604,578
|
|||||||||||||||||||||
Weighted-average number of shares used in the calculation of diluted earnings per share (in shares)
|
100,646,549
|
101,225,178
|
101,225,178
|
100,677,621
|
101,083,971
|
101,083,971
|
100,698,306
|
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
For the nine
months ended September 30, |
(Note 2D)
|
For the three
months ended September 30, |
(Note 2D)
|
|||||||||||||||||||||||||
For the nine
months ended September 30, |
For the three
months ended September 30, |
For the
year ended December 31, |
||||||||||||||||||||||||||
2016
|
2017
|
2017
|
2016
|
2017
|
2017
|
2016
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Profit for the period
|
136
|
103
|
29
|
33
|
32
|
9
|
150
|
|||||||||||||||||||||
Other comprehensive income items that after initial recognition in comprehensive income were or will be transferred to profit or loss
|
||||||||||||||||||||||||||||
Changes in fair value of cash flow hedges transferred to profit or loss, net of tax
|
1
|
1
|
-
|
1
|
1
|
-
|
1
|
|||||||||||||||||||||
Total other comprehensive income for the period that after initial recognition in comprehensive income was or will be transferred to profit or loss, net of tax
|
1
|
1
|
-
|
1
|
1
|
-
|
1
|
|||||||||||||||||||||
Other comprehensive income items that will not be transferred to profit or loss
|
||||||||||||||||||||||||||||
Re-measurement of defined benefit plan, net of tax
|
-
|
-
|
-
|
-
|
-
|
-
|
(1
|
)
|
||||||||||||||||||||
Total other comprehensive loss for the period that will not be transferred to profit or loss, net of tax
|
-
|
-
|
-
|
-
|
-
|
-
|
(1
|
)
|
||||||||||||||||||||
Total other comprehensive income for the period, net of tax
|
1
|
1
|
-
|
1
|
1
|
-
|
-
|
|||||||||||||||||||||
Total comprehensive income for the period
|
137
|
104
|
29
|
34
|
33
|
9
|
150
|
|||||||||||||||||||||
Total comprehensive income attributable to:
|
||||||||||||||||||||||||||||
Owners of the Company
|
136
|
103
|
29
|
34
|
32
|
9
|
148
|
|||||||||||||||||||||
Non-controlling interests
|
1
|
1
|
-
|
-
|
1
|
-
|
2
|
|||||||||||||||||||||
Total comprehensive income for the period
|
137
|
104
|
29
|
34
|
33
|
9
|
150
|
Attributable to owners of the Company
|
Non-controlling
interests |
Total equity
|
Convenience translation into US dollar (Note 2D)
|
|||||||||||||||||||||||||
Share capital
|
Capital reserve
|
Retained earnings
|
Total
|
|||||||||||||||||||||||||
NIS millions
|
US$ millions
|
|||||||||||||||||||||||||||
For the nine months ended
September 30, 2017 (Unaudited) |
||||||||||||||||||||||||||||
Balance as of January 1, 2017
(Audited)
|
||||||||||||||||||||||||||||
1
|
(1
|
)
|
1,322
|
1,322
|
18
|
1,340
|
380
|
|||||||||||||||||||||
Comprehensive income for the period
|
||||||||||||||||||||||||||||
Profit for the period
|
-
|
-
|
102
|
102
|
1
|
103
|
29
|
|||||||||||||||||||||
Other comprehensive income for the period, net of tax
|
-
|
1
|
-
|
1
|
-
|
1
|
-
|
|||||||||||||||||||||
Transactions with owners, recognized directly in equity
|
||||||||||||||||||||||||||||
Share based payments
|
-
|
-
|
2
|
2
|
-
|
2
|
-
|
|||||||||||||||||||||
Derecognition of non-controlling interests due to loss of control in a consolidated company (see Note 8)
|
-
|
-
|
-
|
-
|
(15
|
)
|
(15
|
)
|
(4
|
)
|
||||||||||||||||||
Balance as of September 30, 2017 (Unaudited)
|
1
|
-
|
1,426
|
1,427
|
4
|
1,431
|
405
|
Attributable to owners of the Company
|
Non-controlling
interests |
Total equity
|
|||||||||||||||||||||||
Share capital
|
Capital reserve
|
Retained earnings
|
Total
|
||||||||||||||||||||||
NIS millions
|
|||||||||||||||||||||||||
For the nine months ended
September 30, 2016 (Unaudited) |
|||||||||||||||||||||||||
Balance as of January 1, 2016
|
|||||||||||||||||||||||||
(Audited)
|
1
|
(2
|
)
|
1,170
|
1,169
|
16
|
1,185
|
||||||||||||||||||
Comprehensive income for the period
|
|||||||||||||||||||||||||
Profit for the period
|
-
|
-
|
135
|
135
|
1
|
136
|
|||||||||||||||||||
Other comprehensive income for the period, net of tax
|
-
|
1
|
-
|
1
|
-
|
1
|
|||||||||||||||||||
Transactions with owners, recognized directly in equity
|
|||||||||||||||||||||||||
Share based payments
|
-
|
-
|
4
|
4
|
-
|
4
|
|||||||||||||||||||
Dividend to non-controlling intersts in a consolidated company
|
-
|
-
|
-
|
-
|
(1
|
)
|
(1
|
)
|
|||||||||||||||||
Balance as of September 30, 2016 (Unaudited)
|
1
|
(1
|
)
|
1,309
|
1,309
|
16
|
1,325
|
Attributable to owners of the Company
|
Non-controlling
interests |
Total equity
|
Convenience translation into US dollar (Note 2D)
|
|||||||||||||||||||||||||
Share capital
|
Capital reserve
|
Retained earnings
|
Total
|
|||||||||||||||||||||||||
NIS millions
|
US$ millions
|
|||||||||||||||||||||||||||
For the three months ended
September 30, 2017 (Unaudited) |
||||||||||||||||||||||||||||
Balance as of July 1, 2017
|
||||||||||||||||||||||||||||
(Unaudited)
|
1
|
(1
|
)
|
1,394
|
1,394
|
4
|
1,398
|
396
|
||||||||||||||||||||
Comprehensive income for the period
|
||||||||||||||||||||||||||||
Profit for the period
|
-
|
-
|
32
|
32
|
-
|
32
|
9
|
|||||||||||||||||||||
Other comprehensive income for the period, net of tax
|
-
|
1
|
-
|
1
|
-
|
1
|
-
|
|||||||||||||||||||||
Balance as of
September 30, 2017
(Unaudited)
|
1
|
-
|
1,426
|
1,427
|
4
|
1,431
|
405
|
Attributable to owners of the Company
|
Non-controlling
interests |
Total equity
|
|||||||||||||||||||||||
Share capital
|
Capital reserve
|
Retained earnings
|
Total
|
||||||||||||||||||||||
NIS millions
|
|||||||||||||||||||||||||
For the three months ended
September 30, 2016 (Unaudited) |
|||||||||||||||||||||||||
Balance as of July 1, 2016
|
|||||||||||||||||||||||||
(Unaudited)
|
1
|
(2
|
)
|
1,275
|
1,274
|
16
|
1,290
|
||||||||||||||||||
Comprehensive income for the period
|
|||||||||||||||||||||||||
Profit for the period
|
-
|
-
|
33
|
33
|
-
|
33
|
|||||||||||||||||||
Other comprehensive income for the period, net of tax
|
-
|
1
|
-
|
1
|
-
|
1
|
|||||||||||||||||||
Transactions with owners, recognized directly in equity
|
|||||||||||||||||||||||||
Share based payments
|
-
|
-
|
1
|
1
|
-
|
1
|
|||||||||||||||||||
Balance as of September 30, 2016 (Unaudited)
|
1
|
(1
|
)
|
1,309
|
1,309
|
16
|
1,325
|
Attributable to owners of the Company
|
Non-controlling
interests |
Total equity
|
|||||||||||||||||||||||
Share capital
|
Capital reserve
|
Retained earnings
|
Total
|
||||||||||||||||||||||
NIS millions
|
|||||||||||||||||||||||||
For the year ended December 31, 2016 (Audited)
|
1
|
(2
|
)
|
1,170
|
1,169
|
16
|
1,185
|
||||||||||||||||||
Balance as of January 1, 2016
|
|||||||||||||||||||||||||
(Audited)
|
|||||||||||||||||||||||||
Comprehensive income for the year
|
|||||||||||||||||||||||||
Profit for the year
|
-
|
-
|
148
|
148
|
2
|
150
|
|||||||||||||||||||
Other comprehensive income (loss) for the year, net of tax
|
-
|
1
|
(1
|
)
|
-
|
-
|
-
|
||||||||||||||||||
Transactions with owners, recognized directly in equity
|
|||||||||||||||||||||||||
Share based payments
|
-
|
-
|
5
|
5
|
1
|
6
|
|||||||||||||||||||
Dividend to non-controlling intersts in a consolidated company
|
-
|
-
|
-
|
-
|
(1
|
)
|
(1
|
)
|
|||||||||||||||||
Balance as of December 31, 2016 (Audited)
|
1
|
(1
|
)
|
1,322
|
1,322
|
18
|
1,340
|
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
(Note 2D)
|
(Note 2D)
|
|||||||||||||||||||||||||||
For the nine
months ended September 30, |
For the nine
months ended September 30, |
For the three
months ended September 30, |
For the three
months ended September 30, |
For the
year ended December 31, |
||||||||||||||||||||||||
2016
|
2017*
|
|
2017*
|
|
2016
|
2017*
|
|
2017*
|
|
2016
|
||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Cash flows from operating activities
|
||||||||||||||||||||||||||||
Profit for the period
|
136
|
103
|
29
|
33
|
32
|
9
|
150
|
|||||||||||||||||||||
Adjustments for:
|
||||||||||||||||||||||||||||
Depreciation and amortization
|
398
|
412
|
117
|
131
|
143
|
41
|
534
|
|||||||||||||||||||||
Share based payments
|
4
|
2
|
1
|
1
|
-
|
-
|
6
|
|||||||||||||||||||||
Loss (gain) on sale of property, plant and equipment
|
6
|
(2
|
)
|
-
|
3
|
-
|
-
|
10
|
||||||||||||||||||||
Gain on sale of shares in a consolidated company (see Note 8)
|
-
|
(10
|
)
|
(3
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||
Income tax expense (tax benefit)
|
32
|
35
|
10
|
(2
|
)
|
12
|
3
|
10
|
||||||||||||||||||||
Financing expenses, net
|
110
|
114
|
32
|
42
|
39
|
11
|
150
|
|||||||||||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||||||||||||||
Change in inventory
|
29
|
7
|
2
|
7
|
4
|
1
|
21
|
|||||||||||||||||||||
Change in trade receivables (including long-term amounts)
|
(38
|
)
|
118
|
33
|
37
|
14
|
4
|
(28
|
)
|
|||||||||||||||||||
Change in other receivables (including long-term amounts)
|
(19
|
)
|
(185
|
)
|
(52
|
)
|
(34
|
)
|
(19
|
)
|
(5
|
)
|
(5
|
)
|
||||||||||||||
Changes in trade payables, accrued expenses and provisions
|
44
|
(34
|
)
|
(10
|
)
|
14
|
(59
|
)
|
(17
|
)
|
-
|
|||||||||||||||||
Change in other liabilities (including long-term amounts)
|
(26
|
)
|
(3
|
)
|
(1
|
)
|
(49
|
)
|
10
|
3
|
20
|
|||||||||||||||||
Payments for derivative instruments, net
|
-
|
(3
|
)
|
(1
|
)
|
-
|
(3
|
)
|
(1
|
)
|
-
|
|||||||||||||||||
Income tax paid
|
(73
|
)
|
(35
|
)
|
(10
|
)
|
(23
|
)
|
(9
|
)
|
(3
|
)
|
(88
|
)
|
||||||||||||||
Income tax received
|
-
|
41
|
12
|
-
|
41
|
12
|
1
|
|||||||||||||||||||||
Net cash from operating activities
|
603
|
560
|
159
|
160
|
205
|
58
|
781
|
|||||||||||||||||||||
Cash flows from investing activities
|
||||||||||||||||||||||||||||
Acquisition of property, plant, and equipment
|
(217
|
)
|
(274
|
)
|
(78
|
)
|
(66
|
)
|
(37
|
)
|
(10
|
)
|
(295
|
)
|
||||||||||||||
Additions to intangible assets and others
|
(55
|
)
|
(171
|
)
|
(49
|
)
|
(14
|
)
|
(77
|
)
|
(22
|
)
|
(73
|
)
|
||||||||||||||
Change in current investments, net
|
(7
|
)
|
(79
|
)
|
(22
|
)
|
(3
|
)
|
(3
|
)
|
(1
|
)
|
(9
|
)
|
||||||||||||||
Payments for other derivative contracts, net
|
-
|
-
|
-
|
-
|
3
|
1
|
-
|
|||||||||||||||||||||
Proceeds from sale of property, plant and equipment
|
2
|
-
|
-
|
1
|
-
|
-
|
2
|
|||||||||||||||||||||
Interest received
|
9
|
10
|
3
|
2
|
2
|
-
|
11
|
|||||||||||||||||||||
Proceeds from sale of shares in a consolidated company, net of cash disposed (see Note 8)
|
-
|
3
|
1
|
-
|
11
|
3
|
-
|
|||||||||||||||||||||
Net cash used in investing activities
|
(268
|
)
|
(511
|
)
|
(145
|
)
|
(80
|
)
|
(101
|
)
|
(29
|
)
|
(364
|
)
|
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
(Note 2D)
|
(Note 2D)
|
|||||||||||||||||||||||||||
For the nine
months ended September 30, |
For the nine
months ended September 30, |
For the three
months ended September 30, |
For the three
months ended September 30, |
For the
year ended December 31, |
||||||||||||||||||||||||
2016
|
2017*
|
|
2017*
|
|
2016
|
2017*
|
|
2017*
|
|
2016
|
||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Cash flows from financing activities
|
||||||||||||||||||||||||||||
Payments for derivative contracts, net
|
(10
|
)
|
(3
|
)
|
(1
|
)
|
(4
|
)
|
(3
|
)
|
(1
|
)
|
(13
|
)
|
||||||||||||||
Receipt of long term loans from financial institutions
|
200
|
200
|
57
|
-
|
-
|
-
|
340
|
|||||||||||||||||||||
Repayment of debentures
|
(732
|
)
|
(864
|
)
|
(245
|
)
|
(347
|
)
|
(350
|
)
|
(99
|
)
|
(732
|
)
|
||||||||||||||
Proceeds from issuance of debentures, net of issuance costs
|
653
|
-
|
-
|
403
|
-
|
-
|
653
|
|||||||||||||||||||||
Dividend paid
|
(1
|
)
|
(1
|
)
|
-
|
-
|
(1
|
)
|
-
|
(1
|
)
|
|||||||||||||||||
Interest paid
|
(180
|
)
|
(160
|
)
|
(45
|
)
|
(88
|
)
|
(74
|
)
|
(21
|
)
|
(185
|
)
|
||||||||||||||
Net cash from (used in) financing activities
|
(70
|
)
|
(828
|
)
|
(234
|
)
|
(36
|
)
|
(428
|
)
|
(121
|
)
|
62
|
|||||||||||||||
Changes in cash and cash equivalents
|
265
|
(779
|
)
|
(220
|
)
|
44
|
(324
|
)
|
(92
|
)
|
479
|
|||||||||||||||||
Cash and cash equivalents as at the beginning of the period
|
761
|
1,240
|
351
|
982
|
785
|
223
|
761
|
|||||||||||||||||||||
Cash and cash equivalents as at the end of the period
|
1,026
|
461
|
131
|
1,026
|
461
|
131
|
1,240
|
A. |
Cellcom Israel Ltd. ("the Company") is a company incorporated and domiciled in Israel and its official address is 10 Hagavish Street, Netanya 4250708, Israel. The condensed consolidated interim financial statements of the Group as at September 30, 2017 comprise the Company and its subsidiaries (together referred to as the "Group"). The Group operates and maintains a cellular mobile telephone system in Israel and provides cellular and landline telecommunications services, internet infrastructure and connectivity services, international calls services and television over the internet services (known as Over the Top TV services, or OTT TV services). The Company is a subsidiary of Koor Industries Ltd., a wholly owned subsidiary of Discount Investment Corporation Ltd., which is controlled by IDB Development Corporation Ltd., or IDB.
|
B. |
Material event in the reporting period - Change in estimate
|
A. |
Statement of compliance
|
B. |
Functional and presentation currency
These condensed consolidated financial statements are presented in New Israeli Shekel ("NIS"), which is the Group's functional currency, and are rounded to the nearest million. NIS is the currency that represents the primary economic environment in which the Group operates.
|
C. |
Basis of measurement
|
D. |
Convenience translation into U.S. dollars (“dollars” or “$”)
|
E. |
Use of estimates and judgments
|
|
For the nine month period ended September 30, 2017
|
For the three month period ended September 30, 2017
|
For the three month period ending December 31, 2017
|
Subsequently
|
||||||||||||
|
(Unaudited)
|
|||||||||||||||
|
NIS Millions
|
|||||||||||||||
Decrease (increase) in depreciation expenses
|
8
|
4
|
4
|
(12
|
)
|
F. |
Exchange rates and known Consumer Price Indexes are as follows:
|
Exchange rates
of US$
|
Consumer Price
Index (points)*
|
|||||||
As of September 30, 2017
|
3.529
|
221.13
|
||||||
As of September 30, 2016
|
3.758
|
221.35
|
||||||
As of December 31, 2016
|
3.845
|
220.68
|
||||||
Increase (decrease) during the period:
|
||||||||
Nine months ended September 30, 2017
|
(8.22
|
)%
|
0.20
|
%
|
||||
Nine months ended September 30, 2016
|
(3.69
|
)%
|
-
|
|||||
Three months ended September 30, 2017
|
(0.94
|
)%
|
(0.50
|
)%
|
||||
Three months ended September 30, 2016
|
(2.29
|
)%
|
0.40
|
%
|
||||
Year ended December 31, 2016
|
(1.46
|
)%
|
(0.30
|
)%
|
1. |
Identifying the contract with the customer.
|
2. |
Identifying separate performance obligations in the contract.
|
3. |
Determining the transaction price.
|
4. |
Allocating the transaction price to separate performance obligations.
|
5. |
Recognizing revenue when the performance obligations are satisfied.
|
1. |
Application of the cumulative effect approach only for contracts not completed at the transition date; and
|
2. |
Examining the aggregate effect of contract changes that occurred before the date of initial application, instead of examining each change separately.
|
|
According to
|
|||||||||||
|
the previous
|
Effect of the |
According to
|
|||||||||
|
policy
|
standard*
|
IFRS 15
|
|||||||||
|
NIS millions
|
|||||||||||
|
(Unaudited)
|
|||||||||||
Intangible assets and others, net
|
1,175
|
72
|
1,247
|
|||||||||
Deferred tax liabilities
|
112
|
17
|
129
|
|||||||||
Retained earnings
|
1,371
|
55
|
1,426
|
According to
|
||||||||||||
the previous
|
Effect of the
|
According to
|
||||||||||
policy
|
standard* |
IFRS 15
|
||||||||||
NIS millions
|
||||||||||||
(Unaudited)
|
||||||||||||
Revenues
|
2,896
|
-
|
2,896
|
|||||||||
Cost of revenues
|
(2,000
|
)
|
-
|
(2,000
|
)
|
|||||||
Gross profit
|
896
|
-
|
896
|
|||||||||
Selling and marketing expenses
|
(415
|
)
|
72
|
(343
|
)
|
|||||||
General and administrative expenses
|
(313
|
)
|
-
|
(313
|
)
|
|||||||
Other income, net
|
12
|
-
|
12
|
|||||||||
Operating profit
|
180
|
72
|
252
|
|||||||||
Financing income
|
38
|
-
|
38
|
|||||||||
Financing expenses
|
(152
|
)
|
-
|
(152
|
)
|
|||||||
Financing expenses, net
|
(114
|
)
|
-
|
(114
|
)
|
|||||||
Profit before taxes on income
|
66
|
72
|
138
|
|||||||||
Taxes on income
|
(18
|
)
|
(17
|
)
|
(35
|
)
|
||||||
Profit for the period
|
48
|
55
|
103
|
|||||||||
Attributable to:
|
||||||||||||
Owners of the Company
|
47
|
55
|
102
|
|||||||||
Non-controlling interests
|
1
|
-
|
1
|
|||||||||
Profit for the period
|
48
|
55
|
103
|
|||||||||
Earnings per share
|
||||||||||||
Basic earnings per share (in NIS)
|
0.47
|
0.55
|
1.02
|
|||||||||
Diluted earnings per share (in NIS)
|
0.47
|
0.55
|
1.02
|
According to
|
||||||||||||
the previous
|
Effect of the |
According to
|
||||||||||
policy
|
standard*
|
IFRS 15
|
||||||||||
NIS millions
|
||||||||||||
(Unaudqited)
|
||||||||||||
Revenues
|
975
|
-
|
975
|
|||||||||
Cost of revenues
|
(670
|
)
|
-
|
(670
|
)
|
|||||||
Gross profit
|
305
|
-
|
305
|
|||||||||
Selling and marketing expenses
|
(141
|
)
|
24
|
(117
|
)
|
|||||||
General and administrative expenses
|
(105
|
)
|
-
|
(105
|
)
|
|||||||
Operating profit
|
59
|
24
|
83
|
|||||||||
Financing income
|
12
|
-
|
12
|
|||||||||
Financing expenses
|
(51
|
)
|
-
|
(51
|
)
|
|||||||
Financing expenses, net
|
(39
|
)
|
-
|
(39
|
)
|
|||||||
Profit before taxes on income
|
20
|
24
|
44
|
|||||||||
Taxes on income
|
(6
|
)
|
(6
|
)
|
(12
|
)
|
||||||
Profit for the period
|
14
|
18
|
32
|
|||||||||
Attributable to:
|
||||||||||||
Owners of the Company
|
14
|
18
|
32
|
|||||||||
Non-controlling interests
|
-
|
-
|
-
|
|||||||||
Profit for the period
|
14
|
18
|
32
|
|||||||||
Earnings per share
|
||||||||||||
Basic earnings per share (in NIS)
|
0.14
|
0.18
|
0.32
|
|||||||||
Diluted earnings per share (in NIS)
|
0.13
|
0.19
|
0.32
|
— |
Cellular segment - the segment includes the cellular communications services, cellular equipment and supplemental services.
|
— |
Fixed-line segment - the segment includes landline telephony services, internet infrastructure and connectivity services, television services, landline equipment and supplemental services.
|
Nine-month period ended September 30, 2017*
|
||||||||||||||||||||
NIS millions
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
Cellular
|
Fixed-line
|
Reconciliation for consolidation
|
Consolidated
|
Reconciliation of subtotal Segment EBITDA to profit for the period
|
||||||||||||||||
External revenues
|
2,033
|
863
|
-
|
2,896
|
||||||||||||||||
Inter-segment revenues
|
11
|
123
|
(134
|
)
|
-
|
|||||||||||||||
Segment EBITDA**
|
477
|
187
|
664
|
|||||||||||||||||
Depreciation and amortization
|
(412
|
)
|
||||||||||||||||||
Taxes on income
|
(35
|
)
|
||||||||||||||||||
Financing income
|
38
|
|||||||||||||||||||
Financing expenses
|
(152
|
)
|
||||||||||||||||||
Share based payments
|
(2
|
)
|
||||||||||||||||||
Other income
|
2
|
|||||||||||||||||||
Profit for the period
|
103
|
Nine-month period ended September 30, 2016
|
||||||||||||||||||||
NIS millions
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
Cellular
|
Fixed-line
|
Reconciliation for consolidation
|
Consolidated
|
Reconciliation of subtotal Segment EBITDA to profit for the period
|
||||||||||||||||
External revenues
|
2,279
|
764
|
-
|
3,043
|
||||||||||||||||
Inter-segment revenues
|
12
|
138
|
(150
|
)
|
-
|
|||||||||||||||
Segment EBITDA**
|
508
|
177
|
685
|
|||||||||||||||||
Depreciation and amortization
|
(398
|
)
|
||||||||||||||||||
Taxes on income
|
(32
|
)
|
||||||||||||||||||
Financing income
|
39
|
|||||||||||||||||||
Financing expenses
|
(149
|
)
|
||||||||||||||||||
Share based payments
|
(4
|
)
|
||||||||||||||||||
Other expenses
|
(5
|
)
|
||||||||||||||||||
Profit for the period
|
136
|
Three-month period ended September 30, 2017*
|
||||||||||||||||||||
NIS millions
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
Cellular
|
Fixed-line
|
Reconciliation for consolidation
|
Consolidated
|
Reconciliation of subtotal Segment EBITDA to profit for the period
|
||||||||||||||||
External revenues
|
675
|
300
|
-
|
975
|
||||||||||||||||
Inter-segment revenues
|
4
|
39
|
(43
|
)
|
-
|
|||||||||||||||
Segment EBITDA**
|
160
|
66
|
226
|
|||||||||||||||||
Depreciation and amortization
|
(143
|
)
|
||||||||||||||||||
Taxes on income
|
(12
|
)
|
||||||||||||||||||
Financing income
|
12
|
|||||||||||||||||||
Financing expenses
|
(51
|
)
|
||||||||||||||||||
Profit for the period
|
32
|
Three-month period ended September 30, 2016
|
||||||||||||||||||||
NIS millions
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
Cellular
|
Fixed-line
|
Reconciliation for consolidation
|
Consolidated
|
Reconciliation of subtotal Segment EBITDA to profit for the period
|
||||||||||||||||
External revenues
|
725
|
267
|
-
|
992
|
||||||||||||||||
Inter-segment revenues
|
4
|
48
|
(52
|
)
|
-
|
|||||||||||||||
Segment EBITDA**
|
149
|
60
|
209
|
|||||||||||||||||
Depreciation and amortization
|
(131
|
)
|
||||||||||||||||||
Tax benefit
|
2
|
|||||||||||||||||||
Financing income
|
12
|
|||||||||||||||||||
Financing expenses
|
(54
|
)
|
||||||||||||||||||
Share based payments
|
(1
|
)
|
||||||||||||||||||
Other expenses
|
(4
|
)
|
||||||||||||||||||
Profit for the period
|
33
|
Year ended December 31, 2016
|
||||||||||||||||||||
NIS millions
|
||||||||||||||||||||
(Audited)
|
||||||||||||||||||||
Cellular
|
Fixed-line
|
Reconciliation for consolidation
|
Consolidated
|
Reconciliation of subtotal Segment EBITDA to profit for the year
|
||||||||||||||||
External revenues
|
2,981
|
1,046
|
-
|
4,027
|
||||||||||||||||
Inter-segment revenues
|
17
|
183
|
(200
|
)
|
-
|
|||||||||||||||
Segment EBITDA**
|
625
|
233
|
858
|
|||||||||||||||||
Depreciation and amortization
|
(534
|
)
|
||||||||||||||||||
Taxes on income
|
(10
|
)
|
||||||||||||||||||
Financing income
|
46
|
|||||||||||||||||||
Financing expenses
|
(196
|
)
|
||||||||||||||||||
Share based payments
|
(6
|
)
|
||||||||||||||||||
Other expenses
|
(8
|
)
|
||||||||||||||||||
Profit for the year
|
150
|
a. |
In June 2017, the Company entered into a loan agreement with an Israeli bank that provided the Company a similar loan in August 2015 (the "Lender" and the "2015 Loan Agreement", respectively), according to which the Lender has agreed, subject to certain customary conditions, to provide the Company a deferred loan in a principal amount of NIS 150 million, unlinked, which will be provided to the Company in March 2019, and will bear an annual fixed interest of 4%. The loan's principal amount will be payable in four equal annual payments on March 31 of each of the years 2021 through and including 2024 and the interest will be payable in ten semi-annual installments on March 31 and September 30 of each calendar year commencing September 30,2019 through and including March 31, 2024. Until the provision of the loan, the Company is required to pay the Lender a commitment fee.
|
b. |
According to a loan agreement entered by the Company and two Israeli financial institutions in May 2015 (for additional details, see Note 17(2) to the annual financial statements, regarding long-term loans from financial institutions), in June 30, 2017 the second loan under the agreement in a principal amount of NIS 200 million was provided to the Company. The loan is without linkage and the principal amount bears an annual fixed interest of 5.1%. The loan's principal amount will be payable in four equal annual payments on June 30 of each of the years 2019 through 2022 (inclusive). The interest will be paid in ten semi-annual installments on June 30 and December 31, of each calendar year commencing December 31, 2017 through and including June 30, 2022.
|
Nine months ended
September 30, |
Three months ended
September 30, |
Year ended December 31,
|
||||||||||||||||||
2016
|
2017
|
2016
|
2017
|
2016
|
||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||
NIS millions
|
||||||||||||||||||||
Revenues from equipment
|
729
|
689
|
234
|
238
|
994
|
|||||||||||||||
Revenues from services:
|
||||||||||||||||||||
Cellular services
|
1,555
|
1,365
|
496
|
450
|
2,025
|
|||||||||||||||
Land-line communications services
|
657
|
739
|
226
|
253
|
871
|
|||||||||||||||
Other services
|
102
|
103
|
36
|
34
|
137
|
|||||||||||||||
Total revenues from services
|
2,314
|
2,207
|
758
|
737
|
3,033
|
|||||||||||||||
Total revenues
|
3,043
|
2,896
|
992
|
975
|
4,027
|
(1) |
Financial instruments measured at fair value for disclosure purposes only
|
|
September 30,
|
December 31,
|
||||||||||||||||||||||
|
2016
|
2017
|
2016
|
|||||||||||||||||||||
|
Book value
|
Fair value*
|
Book value
|
Fair value*
|
Book value
|
Fair value*
|
||||||||||||||||||
|
NIS millions
|
NIS millions
|
NIS millions
|
|||||||||||||||||||||
Debentures including current maturities and accrued interest
|
(3,771
|
)
|
(4,085
|
)
|
(2,918
|
)
|
(3,252
|
)
|
(3,815
|
)
|
(4,112
|
)
|
||||||||||||
|
||||||||||||||||||||||||
Long-term loans from financial institutions including current maturities and accrued interest
|
(202
|
)
|
(211
|
)
|
(547
|
)
|
(594
|
)
|
(340
|
)
|
(350
|
)
|
(2) |
Fair value hierarchy of financial instruments measured at fair value
|
September 30, 2017
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
NIS millions
|
||||||||||||||||
Financial assets at fair value through profit or loss
|
||||||||||||||||
Current investments in debt securities and shares
|
359
|
-
|
-
|
359
|
||||||||||||
Derivatives
|
-
|
4
|
-
|
4
|
||||||||||||
Total assets
|
359
|
4
|
-
|
363
|
||||||||||||
Financial liabilities at fair value through profit or loss
|
||||||||||||||||
Derivatives
|
-
|
(21
|
)
|
-
|
(21
|
)
|
||||||||||
Total liabilities
|
-
|
(21
|
)
|
-
|
(21
|
)
|
||||||||||
|
September 30, 2016
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
|
NIS millions
|
|||||||||||||||
Financial assets at fair value through profit or loss
|
||||||||||||||||
Current investments in debt securities
|
283
|
-
|
-
|
283
|
||||||||||||
Derivatives
|
-
|
3
|
-
|
3
|
||||||||||||
Total assets
|
283
|
3
|
-
|
286
|
||||||||||||
Financial liabilities at fair value through profit or loss
|
||||||||||||||||
Derivatives
|
-
|
(25
|
)
|
-
|
(25
|
)
|
||||||||||
Total liabilities
|
-
|
(25
|
)
|
-
|
(25
|
)
|
||||||||||
|
||||||||||||||||
|
December 31, 2016
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
|
NIS millions
|
|||||||||||||||
Financial assets at fair value through profit or loss
|
||||||||||||||||
Current investments in debt securities
|
282
|
-
|
-
|
282
|
||||||||||||
Derivatives
|
-
|
2
|
-
|
2
|
||||||||||||
Total assets
|
282
|
2
|
-
|
284
|
||||||||||||
Financial liabilities at fair value through profit or loss
|
||||||||||||||||
Derivatives
|
-
|
(17
|
)
|
-
|
(17
|
)
|
||||||||||
Total liabilities
|
-
|
(17
|
)
|
-
|
(17
|
)
|
(3) |
Valuation methods to determine fair value
|
· |
Right of Use (IRU) to Golan Telecom to the passive elements of the Company;
|
· |
Right of Use (IRU) to Golan Telecom in half of the existing active elements of the 3G and 4G network and 2G hosting services;
|
· |
Transmission services to Golan Telecom.
|
1. |
In March 2015, a purported class action in a total amount estimated by the plaintiffs to be approximately NIS 15 billion, if the lawsuit is certified as a class action, was filed against the Company, by plaintiffs alleging to be subscribers of the Company, in connection with allegations that the Company unlawfully violated the privacy of its subscribers. In February 2017, a settlement agreement was filed with the court and proceedings are still pending.
|
2. |
In December 2015, a purported class action was filed against the Company and two other defendants, alleging that the defendants unlawfully offer cellular pre-paid calling cards for very high prices by allegedly coordinating such prices among them. The total amount claimed from all defendants, including the Company, had the lawsuit been certified as a class action, was estimated by the plaintiffs to be approximately NIS 13 billion, out of which, based on the data specified in the lawsuit by the plaintiffs, an estimated amount of approximately NIS 6.7 billion was claimed from the Company. In September 2016, the purported class action was dismissed by the District Court. In November 2016, the plaintiffs filed an appeal regarding the District Court's decision and in January 2017, the Supreme Court dismissed their appeal.
|
CELLCOM ISRAEL LTD.
|
||||||
Date:
|
November 22, 2017
|
By:
|
/s/ Liat Menahemi Stadler
|
|||
Name:
|
Liat Menahemi Stadler
|
|||||
Title:
|
VP Legal and Corporate Secretary
|