1.
|
Cellcom Israel Announces Second Quarter 2012 Results
|
2.
|
Cellcom Israel Ltd. and Subsidiaries - Financial Statements as at June 30, 2012
|
·
|
Successful merger of Cellcom Israel with Netvision – forming unified headquarters with substantial cost savings. The Company's subsidiary, Netvision, is retaining its profitability level, and presenting an EBITDA1 of NIS 140 million for the first half of 2012, despite the increased competition in the ISP market
|
·
|
Efficiency measures - operational efficiency measures which will lead to savings at an annual run rate of NIS 300 million
|
·
|
Winning the Israeli Defense Force (IDF) tender for cellular services
|
·
|
Transition from a cellular company to a communications group - offering integrated communications packages such as "Cellcom Total"
|
·
|
The Company intends to cope with the changing market conditions by taking further significant operational efficiency measures
|
·
|
Strengthening Cellcom Israel's position as a communications group while laying the foundation for future opportunities and entry into new areas of activity such as the landline wholesale market, cellular credit card and the examination of entry into IPTV
|
·
|
The Company will add approx. 60,000 new IDF subscribers and will approach additional related potential subscribers
|
§
|
Free cash flow3 totaled NIS 284 million ($73 million), a 63.2% increase
|
§
|
Total Revenues totaled NIS 1,498 million ($382 million), a 5.7% decrease
|
§
|
Total Revenues from services totaled NIS 1,182 million ($301 million), a 4.5% increase
|
§
|
EBITDA totaled NIS 474 million ($121 million), a 16.3% decrease
|
§
|
EBITDA margin 31.6%, down from 35.6%
|
§
|
Operating profit totaled NIS 282 million ($72 million), a 29.0% decrease
|
§
|
Net income totaled NIS 121 million ($31 million), a 50.4% decrease
|
§
|
Cellular Subscriber base totaled approx. 3.333 million at the end of June 2012
|
2
|
The Company consolidated financial results for the second quarter 2012 include the results of Netvision Ltd., or Netvision, while the consolidated financial results for the second quarter 2011 do not include Netvision's results (due to the completion of Netvision's acquisition by the Company on August 31, 2011).
|
3
|
Please see “Use of Non-IFRS financial measures” section in this press release.
|
Q2/2012
|
Q2/2011
|
% Change
|
Q2/2012
|
Q2/2011
|
|
million NIS |
million US$
(convenience translation)
|
||||
Total revenues
|
1,498
|
1,589
|
(5.7%)
|
381.9
|
405.0
|
Operating profit
|
282
|
397
|
(29.0%)
|
71.9
|
101.2
|
Net income
|
121
|
244
|
(50.4%)
|
30.8
|
62.2
|
Free cash flow
|
284
|
174
|
63.2%
|
72.4
|
44.4
|
EBITDA
|
474
|
566
|
(16.3%)
|
120.8
|
144.3
|
EBITDA, as percent of total revenues
|
31.6%
|
35.6%
|
(11.2%)
|
Cellcom Israel without
Netvision
|
Netvision
|
Consolidation
adjustments (*)
|
Consolidated results
|
|||
Q2/2012
|
Q2/2011
|
Change (%)
|
Q2/2012
|
Q2/2012
|
||
Total revenues
|
1,239
|
1,589
|
(22.0%)
|
277
|
(18)
|
1,498
|
Total service revenues 3
|
942
|
1,131
|
(16.7%)
|
258
|
(18)
|
1,182
|
Equipment revenues
|
297
|
458
|
(35.2%)
|
19
|
-
|
316
|
Operating profit
|
256
|
397
|
(35.5%)
|
55
|
(29)
|
282
|
EBITDA
|
399
|
566
|
(29.5%)
|
75
|
-
|
474
|
EBITDA, as percent of total revenues
|
32.2%
|
35.6%
|
(9.6%)
|
27.1%
|
-
|
31.6%
|
(*)
|
Include inter-company revenues between Cellcom Israel and Netvision, and amortization expenses attributable to the merger.
|
Q2/2012
|
Q2/2011
|
Change (%)
|
|
Cellular subscribers at the end of period (in thousands)
|
3,333
|
3,366
|
(1.0%)
|
Churn Rate for cellular subscribers (in %)
|
8.1%
|
6.4%
|
26.6%
|
Monthly cellular ARPU (in NIS)
|
90.3
|
108.2
|
(16.5%)
|
Average Monthly cellular MOU (in minutes)
|
375
|
342
|
9.6%
|
3
|
Including revenues from content, SMS and value added services. The Company has ceased to detail separately the revenues from content, SMS and value added services, since most of the marketing plans which are sold nowadays include service packages which include unlimited air time minutes and SMS as well as cellular surfing.
|
·
|
For cellular services - from January 1, 2012 to May 23, 2012 – 2.5%; from May 24, 2012 to July 31, 2012 – 1%; from August 1, 2012 to December 31, 2012 – 0.292% provided the 2012 annual rate shall be 1.3% and as of January 1, 2013 – 0%.
|
·
|
For landline and long distance services (for which the Company pays 1% for 2012) – as of January 1, 2013 – 0%.
|
Company Contact
Yaacov Heen
Chief Financial Officer
investors@cellcom.co.il
Tel: +972 52 998 9755
|
IR Contacts
Porat Saar
CCG Investor Relations Israel & US
cellcom@ccgisrael.com
Tel: +1 646 233 2161
|
Convenience
|
||||||||||||||||
translation
|
||||||||||||||||
Into
|
||||||||||||||||
U.S. dollar
|
||||||||||||||||
June 30,
|
June 30,
|
June 30,
|
December 31,
|
|||||||||||||
2011
|
2012
|
2012
|
2011
|
|||||||||||||
NIS millions
|
NIS millions
|
US$ millions
|
NIS millions
|
|||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
1,527 | 736 | 188 | 920 | ||||||||||||
Current investments, including derivatives
|
390 | 974 | 248 | 290 | ||||||||||||
Trade receivables
|
1,571 | 1,922 | 490 | 1,859 | ||||||||||||
Other receivables
|
70 | 93 | 24 | 93 | ||||||||||||
Inventory
|
138 | 129 | 33 | 170 | ||||||||||||
Total current assets
|
3,696 | 3,854 | 983 | 3,332 | ||||||||||||
Trade and other receivables
|
858 | 1,355 | 345 | 1,337 | ||||||||||||
Property, plant and equipment, net
|
1,961 | 2,120 | 541 | 2,168 | ||||||||||||
Intangible assets, net
|
672 | 1,597 | 407 | 1,680 | ||||||||||||
Deferred tax assets
|
- | 56 | 14 | 40 | ||||||||||||
Total non-current assets
|
3,491 | 5,128 | 1,307 | 5,225 | ||||||||||||
Total assets
|
7,187 | 8,982 | 2,290 | 8,557 | ||||||||||||
Liabilities
|
||||||||||||||||
Short-term credit and current maturities of long-term loans and debentures
|
594 | 758 | 193 | 674 | ||||||||||||
Trade payables and accrued expenses
|
767 | 835 | 213 | 1,026 | ||||||||||||
Current tax liabilities
|
82 | 108 | 28 | 69 | ||||||||||||
Provisions
|
101 | 157 | 40 | 148 | ||||||||||||
Other payables, including derivatives
|
397 | 528 | 135 | 547 | ||||||||||||
Dividend declared
|
292 | 130 | 33 | 189 | ||||||||||||
Total current liabilities
|
2,233 | 2,516 | 642 | 2,653 | ||||||||||||
Long-term loans from banks
|
- | 15 | 4 | 19 | ||||||||||||
Debentures
|
4,575 | 5,929 | 1,512 | 5,452 | ||||||||||||
Provisions
|
18 | 21 | 5 | 21 | ||||||||||||
Other long-term liabilities
|
2 | 44 | 11 | 41 | ||||||||||||
Liability for employee rights upon retirement, net
|
- | 15 | 4 | 10 | ||||||||||||
Deferred tax liabilities
|
61 | 162 | 41 | 174 | ||||||||||||
Total non-current liabilities
|
4,656 | 6,186 | 1,577 | 5,717 | ||||||||||||
Total liabilities
|
6,889 | 8,702 | 2,219 | 8,370 | ||||||||||||
Equity attributable to owners of the Company
|
||||||||||||||||
Share capital
|
1 | 1 | - | 1 | ||||||||||||
Cash flow hedge reserve
|
(20 | ) | 8 | 2 | 7 | |||||||||||
Retained earnings
|
317 | 270 | 69 | 175 | ||||||||||||
Non-controlling interest
|
- | 1 | - | 4 | ||||||||||||
Total equity
|
298 | 280 | 71 | 187 | ||||||||||||
Total liabilities and equity
|
7,187 | 8,982 | 2,290 | 8,557 |
Six-month period ended
June 30,
|
Three-month period ended
June 30,
|
Year ended
December 31,
|
||||||||||||||||||||||||||
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
2011
|
2012
|
2012
|
2011
|
2012
|
2012
|
2011
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Revenues
|
3,176 | 3,083 | 786 | 1,589 | 1,498 | 382 | 6,506 | |||||||||||||||||||||
Cost of revenues
|
(1,554 | ) | (1,737 | ) | (443 | ) | (804 | ) | (838 | ) | (214 | ) | (3,408 | ) | ||||||||||||||
Gross profit
|
1,622 | 1,346 | 343 | 785 | 660 | 168 | 3,098 | |||||||||||||||||||||
Selling and marketing expenses
|
(441 | ) | (456 | ) | (116 | ) | (232 | ) | (220 | ) | (56 | ) | (990 | ) | ||||||||||||||
General and administrative expenses
|
(313 | ) | (333 | ) | (85 | ) | (156 | ) | (161 | ) | (41 | ) | (685 | ) | ||||||||||||||
Other income (expenses), net
|
- | - | - | - | 3 | 1 | (1 | ) | ||||||||||||||||||||
Operating profit
|
868 | 557 | 142 | 397 | 282 | 72 | 1,422 | |||||||||||||||||||||
Financing income
|
61 | 83 | 21 | 45 | 45 | 11 | 116 | |||||||||||||||||||||
Financing expenses
|
(203 | ) | (236 | ) | (60 | ) | (120 | ) | (162 | ) | (41 | ) | (409 | ) | ||||||||||||||
Financing expenses, net
|
(142 | ) | (153 | ) | (39 | ) | (75 | ) | (117 | ) | (30 | ) | (293 | ) | ||||||||||||||
Profit before taxes on income
|
726 | 404 | 103 | 322 | 165 | 42 | 1,129 | |||||||||||||||||||||
Taxes on income
|
(176 | ) | (110 | ) | (28 | ) | (78 | ) | (44 | ) | (11 | ) | (304 | ) | ||||||||||||||
Profit for the period
|
550 | 294 | 75 | 244 | 121 | 31 | 825 | |||||||||||||||||||||
Profit for the period attributable to:
|
||||||||||||||||||||||||||||
Owners of the Company
|
550 | 294 | 75 | 244 | 121 | 31 | 824 | |||||||||||||||||||||
Non-controlling interests
|
- | - | - | - | - | - | 1 | |||||||||||||||||||||
Profit for the period
|
550 | 294 | 75 | 244 | 121 | 31 | 825 | |||||||||||||||||||||
Earnings per share
|
||||||||||||||||||||||||||||
Basic earnings per share in NIS
|
5.53 | 2.96 | 0.75 | 2.45 | 1.22 | 0.31 | 8.28 | |||||||||||||||||||||
Diluted earnings per share in NIS
|
5.53 | 2.96 | 0.75 | 2.45 | 1.22 | 0.31 | 8.28 |
Six-month period ended
June 30,
|
Three-month period ended
June 30,
|
Year ended
December 31,
|
||||||||||||||||||||||||||
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into
US dollar
|
into
US dollar
|
|||||||||||||||||||||||||||
2011
|
2012
|
2012
|
2011
|
2012
|
2012
|
2011
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Cash flows from operating activities
|
||||||||||||||||||||||||||||
Profit for the period
|
550 | 294 | 75 | 244 | 121 | 31 | 825 | |||||||||||||||||||||
Adjustments for:
|
||||||||||||||||||||||||||||
Depreciation and Amortization
|
336 | 389 | 99 | 168 | 193 | 49 | 738 | |||||||||||||||||||||
Share based payment
|
1 | 3 | 1 | 1 | 2 | 1 | 6 | |||||||||||||||||||||
Loss on sale of property, plant and equipment
|
- | 1 | - | - | - | - | - | |||||||||||||||||||||
Income tax expense
|
176 | 110 | 28 | 78 | 44 | 11 | 304 | |||||||||||||||||||||
Financing expenses, net
|
142 | 153 | 39 | 75 | 117 | 30 | 293 | |||||||||||||||||||||
Other expenses
|
- | 1 | - | - | - | - | 2 | |||||||||||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||||||||||||||
Change in inventory
|
(38 | ) | 38 | 10 | (19 | ) | 31 | 8 | (67 | ) | ||||||||||||||||||
Change in trade receivables (including long-term amounts)
|
(326 | ) | (34 | ) | (8 | ) | (209 | ) | 24 | 6 | (585 | ) | ||||||||||||||||
Change in other receivables (including long-term amounts)
|
(6 | ) | (42 | ) | (11 | ) | (2 | ) | (24 | ) | (6 | ) | 61 | |||||||||||||||
Change in trade payables, accrued expenses and provisions
|
117 | (89 | ) | (23 | ) | (5 | ) | (20 | ) | (5 | ) | 146 | ||||||||||||||||
Change in other liabilities (including long-term amounts)
|
12 | 16 | 4 | (6 | ) | (3 | ) | (1 | ) | (52 | ) | |||||||||||||||||
Proceeds from (payments for) derivative hedging contracts, net
|
(9 | ) | 8 | 2 | (6 | ) | 5 | 1 | (14 | ) | ||||||||||||||||||
Income tax paid
|
(206 | ) | (117 | ) | (30 | ) | (86 | ) | (55 | ) | (14 | ) | (325 | ) | ||||||||||||||
Income tax received
|
- | 15 | 4 | - | 8 | 2 | - | |||||||||||||||||||||
Net cash from operating activities
|
749 | 746 | 190 | 233 | 443 | 113 | 1,332 |
Six-month period ended
June 30,
|
Three-month period ended
June 30,
|
Year ended
December 31,
|
||||||||||||||||||||||||||
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into
US dollar
|
into
US dollar
|
|||||||||||||||||||||||||||
2011
|
2012
|
2012
|
2011
|
2012
|
2012
|
2011
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Cash flows from investing activities
|
||||||||||||||||||||||||||||
Acquisition of property, plant, and equipment
|
(135 | ) | (284 | ) | (73 | ) | (53 | ) | (149 | ) | (38 | ) | (333 | ) | ||||||||||||||
Acquisition of intangible assets
|
(52 | ) | (52 | ) | (13 | ) | (18 | ) | (25 | ) | (6 | ) | (99 | ) | ||||||||||||||
Acquisition of subsidiary, net of cash acquired
|
- | - | - | - | - | - | (1,458 | ) | ||||||||||||||||||||
Change in current investments, net
|
8 | (672 | ) | (171 | ) | 6 | (51 | ) | (13 | ) | 197 | |||||||||||||||||
Proceeds from (payments for) other derivative contracts, net
|
(9 | ) | 3 | 1 | (6 | ) | 1 | - | 1 | |||||||||||||||||||
Proceeds from sale of property, plant and equipment
|
2 | 1 | - | 1 | 1 | - | 3 | |||||||||||||||||||||
Interest received
|
20 | 8 | 2 | 17 | 6 | 2 | 33 | |||||||||||||||||||||
Loan to equity accounted investee
|
- | (1 | ) | - | - | - | - | - | ||||||||||||||||||||
Proceeds from sale of subsidiary
|
- | 7 | 2 | - | 7 | 2 | - | |||||||||||||||||||||
Net cash used in investing activities
|
(166 | ) | (990 | ) | (252 | ) | (53 | ) | (210 | ) | (53 | ) | (1,656 | ) | ||||||||||||||
Cash flows from financing activities
|
||||||||||||||||||||||||||||
Proceeds from (payments for) derivative contracts, net
|
10 | (6 | ) | (2 | ) | 6 | (5 | ) | (2 | ) | 11 | |||||||||||||||||
Repayment of long-term loans from banks
|
- | (4 | ) | (1 | ) | - | (4 | ) | (1 | ) | (4 | ) | ||||||||||||||||
Repayment of debentures
|
(175 | ) | (479 | ) | (122 | ) | - | - | - | (354 | ) | |||||||||||||||||
Proceeds from issuance of debentures, net of issuance costs
|
1,033 | 992 | 253 | - | - | - | 2,165 | |||||||||||||||||||||
Dividend paid
|
(334 | ) | (261 | ) | (67 | ) | (303 | ) | (72 | ) | (18 | ) | (858 | ) | ||||||||||||||
Interest paid
|
(123 | ) | (182 | ) | (46 | ) | - | (1 | ) | - | (245 | ) | ||||||||||||||||
Net cash provided from (used in) financing activities
|
411 | 60 | 15 | (297 | ) | (82 | ) | (21 | ) | 715 | ||||||||||||||||||
Cash balance presented under assets held for sales/ Cash outflow due to sale of assets held for sale
|
- | - | - | - | (3 | ) | (1 | ) | (4 | ) | ||||||||||||||||||
Changes in cash and cash equivalents
|
994 | (184 | ) | (47 | ) | (117 | ) | 148 | 38 | 387 | ||||||||||||||||||
Cash and cash equivalents at beginning of the period
|
533 | 920 | 235 | 1,644 | 588 | 150 | 533 | |||||||||||||||||||||
Cash and cash equivalents at end of the period
|
1,527 | 736 | 188 | 1,527 | 736 | 188 | 920 |
Three-month period ended
June 30,
|
Year ended
December 31,
|
|||||||||||||||
2011
NIS millions
|
2012
NIS millions
|
Convenience
translation
into US dollar
2012
US$ millions
|
2011
NIS millions
|
|||||||||||||
Profit for the period
|
244 | 121 | 31 | 825 | ||||||||||||
Taxes on income
|
78 | 44 | 11 | 304 | ||||||||||||
Financing income
|
(45 | ) | (45 | ) | (11 | ) | (116 | ) | ||||||||
Financing expenses
|
120 | 162 | 41 | 409 | ||||||||||||
Other expenses (income)
|
- | (3 | ) | (1 | ) | 1 | ||||||||||
Depreciation and amortization
|
168 | 193 | 49 | 738 | ||||||||||||
Share based payments
|
1 | 2 | 1 | 6 | ||||||||||||
EBITDA
|
566 | 474 | 121 | 2,167 |
Three-month period ended
June 30,
|
Year ended
December 31,
|
|||||||||||||||
2011
NIS millions
|
2012
NIS millions
|
Convenience
translation
into US dollar
2012
US$ millions
|
2011
NIS millions
|
|||||||||||||
Cash flows from operating activities
|
233 | 443 | 113 | 1,332 | ||||||||||||
Cash flows from investing activities
|
(53 | ) | (210 | ) | (53 | ) | (*) (198 | ) | ||||||||
Short-term Investment in (sale of) tradable debentures and deposits
|
(6 | ) | 51 | 13 | (197 | ) | ||||||||||
Free cash flow
|
174 | 284 | 73 | 937 |
(*)
|
After elimination of the net cash flows used for the acquisition of Netvision in the amount of NIS 1,458 million (net of cash acquired in the amount of NIS 120 million).
|
Series | Original Issuance Date | Principal on the Date of Issuance |
As of 30.06.2012
|
As of 14.08.2012 |
Interest Rate(fixed)
|
Principal Repayment Dates (3) |
Interest Repayment Dates
|
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
|
|||||||
A(4) (6)
|
22/12/05
10/01/06*
31/05/06*
|
1,065
|
118.333
|
139.756
|
3.398
|
143.154
|
143.005
|
-
|
-
|
5.00%
|
05.07.08
|
05.07.12
|
January 5
and July 5
|
Linked to CPI
|
Reznik, Paz, Nevo Trusts Ltd. Accountant Yossi Reznik. 14 Yad Haruzim St., Tel Aviv. Tel: 03-6393311.
|
B(4) **
|
22/12/05
02/01/06*
05/01/06*
10/01/06*
31/05/06*
|
925.102
|
925.102
|
1,092.582
|
28.004
|
1,120.586
|
1,140.559
|
925.102
|
1,089.486
|
5.30%
|
05.01.13
|
05.01.17
|
January 5
|
Linked to CPI
|
Hermetic Trust (1975) Ltd. Meirav Ofer Oren. 113 Hayarkon St., Tel Aviv. Tel: 03-5274867.
|
C
|
07/10/07
03/02/08*
|
326
|
72.444
|
83.479
|
1.263
|
84.742
|
84.832
|
72.444
|
83.241
|
4.60%
|
01.03.09
|
01.03.13
|
March 1 and September 1
|
Linked to CPI
|
Reznik, Paz, Nevo Trusts Ltd. Accountant Yossi Reznik. 14 Yad Haruzim St., Tel Aviv. Tel: 03-6393311.
|
D **
|
07/10/07
03/02/08*
06/04/09*
30/03/11*
18/08/11*
|
2,423.075
|
2,423.075
|
2,792.153
|
144.517
|
2,936.670
|
2,840.571
|
2,423.075
|
2,784.198
|
5.19%
|
01.07.13
|
01.07.17
|
July 1
|
Linked to CPI
|
Hermetic Trust (1975) Ltd. Meirav Ofer Oren. 113 Hayarkon St., Tel Aviv. Tel: 03-5274867.
|
E **
|
06/04/09
30/03/11*
18/08/11*
|
1,798.962
|
1,499.135
|
1,499.135
|
45.179
|
1,544.314
|
1,530.617
|
1,499.135
|
1,499.135
|
6.25%
|
05.01.12
|
05.01.17
|
January 5
|
Not linked
|
Hermetic Trust (1975) Ltd. Meirav Ofer Oren. 113 Hayarkon St., Tel Aviv. Tel: 03-5274867.
|
F(4) (5) **
|
20/03/12
|
714.802
|
714.802
|
723.737
|
8.900
|
732.637
|
655.902
|
714.802
|
721.675
|
4.35%
|
05.01.17
|
05.01.20
|
January 5
and July 5
|
Linked to CPI
|
Strauss Lazar Trust Company (1992) Ltd
17 Yizhak Sadeh St., Tel Aviv. Tel: 03- 6237777
|
G(4) (5)
|
20/03/12
|
285.198
|
285.198
|
285.198
|
5.410
|
290.608
|
267.173
|
285.198
|
285.198
|
6.74%
|
05.01.17
|
05.01.19
|
January 5
and July 5
|
Not linked
|
Strauss Lazar Trust Company (1992) Ltd
17 Yizhak Sadeh St., Tel Aviv. Tel: 03- 6237777
|
Total
|
7,538.139
|
6,038.089
|
6,616.039
|
236.671
|
6,852.711
|
6,662.659
|
5,919.756
|
6,462.933
|
Series
|
Rating Company
|
Rating as of
(1) 30.6.2012
|
Rating as of 14.08.2012
|
Rating assigned upon issuance of the Series
|
Recent date of rating as of 14.08.2012
|
Additional ratings between original issuance and the recent date of rating as of 14.08.2012(2)
|
|
Date
|
Rating
|
||||||
A
|
S&P Maalot
|
AA-
|
AA-
|
AA-
|
05/2012
|
5/2006, 9/2007, 1/2008, 10/2008, 3/2009, 9/2010, 8/2011, 1/2012, 3/2012, 5/2012
|
AA-,
AA, AA-(2)
|
B
|
S&P Maalot
|
AA-
|
AA-
|
AA-
|
05/2012
|
5/2006, 9/2007, 1/2008, 10/2008, 3/2009, 9/2010, 8/2011, 1/2012, 3/2012, 5/2012
|
AA-,
AA, AA-(2)
|
C
|
S&P Maalot
|
AA-
|
AA-
|
AA-
|
05/2012
|
1/2008, 10/2008, 3/2009, 9/2010, 8/2011, 1/2012, 3/2012, 5/2012
|
AA-,
AA, AA-(2)
|
D
|
S&P Maalot
|
AA-
|
AA-
|
AA-
|
05/2012
|
1/2008, 10/2008, 3/2009, 9/2010, 8/2011, 1/2012, 3/2012, 5/2012
|
AA-,
AA, AA-(2)
|
E
|
S&P Maalot
|
AA-
|
AA-
|
AA
|
05/2012
|
9/2010, 8/2011, 1/2012, 3/2012, 5/2012
|
AA, AA-(2)
|
F
|
S&P Maalot
|
AA-
|
AA-
|
AA
|
05/2012
|
5/2012
|
AA, AA-(2)
|
G
|
S&P Maalot
|
AA-
|
AA-
|
AA
|
05/2012
|
5/2012
|
AA, AA-(2)
|
(1)
|
In May 2012, S&P Maalot updated the Company's rating from an "ilAA/negative" to an “ilAA-/negative”.
|
(2)
|
In September 2007, S&P Maalot issued a notice that the AA- rating for debentures issued by the Company was in the process of recheck with positive implications (Credit Watch Positive). In October 2008, S&P Maalot issued a notice that the AA- rating for debentures issued by the Company is in the process of recheck with stable implications (Credit Watch Stable). This process was withdrawn upon assignment of AA rating in March 2009. In August 2011, S&P Maalot issued a notice that the AA rating for debentures issued by the Company is in the process of recheck with negative implications (Credit Watch Negative). In May 2012, S&P Maalot updated the Company's rating from an "ilAA/negative" to an “ilAA-/negative”. For details regarding the rating of the debentures see the Company's current report dated May 31, 2012.
|
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
|
420,584
|
291,052
|
-
|
-
|
-
|
328,806
|
Second year
|
738,224
|
291,052
|
-
|
-
|
-
|
303,309
|
Third year
|
738,224
|
291,052
|
-
|
-
|
-
|
246,576
|
Fourth year
|
738,224
|
291,052
|
-
|
-
|
-
|
189,844
|
More than five years
|
1,957,237
|
571,350
|
-
|
-
|
-
|
235,460
|
Total
|
4,592,494
|
1,735,556
|
-
|
-
|
-
|
1,303,995
|
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) – None
|
c.
|
Credit from banks in Israel based on the Company's "solo" financial data (in thousand NIS) - None
|
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
|
420,584
|
291,052
|
-
|
-
|
-
|
328,806
|
Second year
|
738,224
|
291,052
|
-
|
-
|
-
|
303,309
|
Third year
|
738,224
|
291,052
|
-
|
-
|
-
|
246,576
|
Fourth year
|
738,224
|
291,052
|
-
|
-
|
-
|
189,844
|
More than five years
|
1,957,237
|
571,350
|
-
|
-
|
-
|
235,460
|
Total
|
4,592,494
|
1,735,556
|
-
|
-
|
-
|
1,303,995
|
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).
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||
First year
|
-
|
16,366
|
-
|
-
|
-
|
1,394
|
Second year
|
-
|
5,041
|
-
|
-
|
-
|
756
|
Third year
|
-
|
5,041
|
-
|
-
|
-
|
453
|
Fourth year
|
-
|
5,036
|
-
|
-
|
-
|
150
|
More than five years
|
-
|
-
|
-
|
-
|
-
|
-
|
Total
|
-
|
31,484
|
-
|
-
|
-
|
2,752
|
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).
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||
First year
|
-
|
12
|
-
|
-
|
-
|
4
|
Second year
|
-
|
12
|
-
|
-
|
-
|
3
|
Third year
|
-
|
12
|
-
|
-
|
-
|
2
|
Fourth year
|
-
|
12
|
-
|
-
|
-
|
1
|
More than five years
|
-
|
12
|
-
|
-
|
-
|
1
|
Total
|
-
|
58
|
-
|
-
|
-
|
11
|
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
|
21,168
|
8,764
|
-
|
-
|
-
|
14,653
|
Second year
|
38,723
|
8,764
|
-
|
-
|
-
|
13,588
|
Third year
|
38,723
|
8,764
|
-
|
-
|
-
|
11,018
|
Fourth year
|
38,723
|
8,764
|
-
|
-
|
-
|
8,448
|
More than five years
|
101,878
|
13,664
|
-
|
-
|
-
|
10,465
|
Total
|
239,213
|
48,720
|
-
|
-
|
-
|
58,172
|
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)
|
Principal payments
|
Gross interest payments (without deduction of tax)
|
|||||
ILS linked to CPI
|
ILS not linked to CPI
|
Euro
|
Dollar
|
Other
|
||
First year
|
-
|
-
|
-
|
-
|
-
|
1,234
|
Second year
|
-
|
26,371
|
-
|
-
|
-
|
1,234
|
Third year
|
-
|
-
|
-
|
-
|
-
|
-
|
Fourth year
|
-
|
-
|
-
|
-
|
-
|
-
|
More than five years
|
-
|
-
|
-
|
-
|
-
|
-
|
Total
|
-
|
26,371
|
-
|
-
|
-
|
2,468
|
Cellcom Israel Ltd.
and Subsidiaries
Financial Statements
As at June 30, 2012
(Unaudited)
|
Contents
|
|
Page
|
|
Condensed Consolidated Interim Statements of Financial position
|
3
|
Condensed Consolidated Interim Statements of Income
|
4
|
Condensed Consolidated Interim Statements of Comprehensive Income
|
5
|
Condensed Consolidated Interim Statements of Changes in Equity
|
6
|
Condensed Consolidated Interim Statements of Cash Flows
|
9
|
Notes to the Condensed Consolidated Interim Financial Statements
|
11
|
Convenience
|
||||||||||||||||
translation
|
||||||||||||||||
into US dollar
|
||||||||||||||||
(Note 2D)
|
||||||||||||||||
June 30,
|
June 30,
|
June 30,
|
December 31,
|
|||||||||||||
2011
|
2012
|
2012
|
2011
|
|||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
1,527 | 736 | 188 | 920 | ||||||||||||
Current investments, including derivatives
|
390 | 974 | 248 | 290 | ||||||||||||
Trade receivables
|
1,571 | 1,922 | 490 | 1,859 | ||||||||||||
Other receivables
|
70 | 93 | 24 | 93 | ||||||||||||
Inventory
|
138 | 129 | 33 | 170 | ||||||||||||
Total current assets
|
3,696 | 3,854 | 983 | 3,332 | ||||||||||||
Trade and other receivables
|
858 | 1,355 | 345 | 1,337 | ||||||||||||
Property, plant and equipment, net
|
1,961 | 2,120 | 541 | 2,168 | ||||||||||||
Intangible assets, net
|
672 | 1,597 | 407 | 1,680 | ||||||||||||
Deferred tax assets
|
- | 56 | 14 | 40 | ||||||||||||
Total non- current assets
|
3,491 | 5,128 | 1,307 | 5,225 | ||||||||||||
Total assets
|
7,187 | 8,982 | 2,290 | 8,557 | ||||||||||||
Liabilities
|
||||||||||||||||
Short term credit and current maturities of long term loans and debentures
|
594 | 758 | 193 | 674 | ||||||||||||
Trade payables and accrued expenses
|
767 | 835 | 213 | 1,026 | ||||||||||||
Current tax liabilities
|
82 | 108 | 28 | 69 | ||||||||||||
Provisions
|
101 | 157 | 40 | 148 | ||||||||||||
Other payables, including derivatives
|
397 | 528 | 135 | 547 | ||||||||||||
Dividend declared
|
292 | 130 | 33 | 189 | ||||||||||||
Total current liabilities
|
2,233 | 2,516 | 642 | 2,653 | ||||||||||||
Long-term loans from banks
|
- | 15 | 4 | 19 | ||||||||||||
Debentures
|
4,575 | 5,929 | 1,512 | 5,452 | ||||||||||||
Provisions
|
18 | 21 | 5 | 21 | ||||||||||||
Other long-term liabilities
|
2 | 44 | 11 | 41 | ||||||||||||
Liability for employee rights upon retirement, net
|
- | 15 | 4 | 10 | ||||||||||||
Deferred tax liabilities
|
61 | 162 | 41 | 174 | ||||||||||||
Total non- current liabilities
|
4,656 | 6,186 | 1,577 | 5,717 | ||||||||||||
Total liabilities
|
6,889 | 8,702 | 2,219 | 8,370 | ||||||||||||
Equity attributable to owners of the Company
|
||||||||||||||||
Share capital
|
1 | 1 | - | 1 | ||||||||||||
Cash flow hedge reserve
|
(20 | ) | 8 | 2 | 7 | |||||||||||
Retained earnings
|
317 | 270 | 69 | 175 | ||||||||||||
Non-controlling interest
|
- | 1 | - | 4 | ||||||||||||
Total equity
|
298 | 280 | 71 | 187 | ||||||||||||
Total liabilities and equity
|
7,187 | 8,982 | 2,290 | 8,557 |
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
(Note 2D)
|
(Note 2D)
|
|||||||||||||||||||||||||||
For the six
months ended
June 30,
|
For the six
months ended
June 30,
|
For the three
months ended
June 30,
|
For the three
months ended
June 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2011
|
2012
|
2012
|
2011
|
2012
|
2012
|
2011
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Revenues
|
3,176 | 3,083 | 786 | 1,589 | 1,498 | 382 | 6,506 | |||||||||||||||||||||
Cost of revenues
|
(1,554 | ) | (1,737 | ) | (443 | ) | (804 | ) | (838 | ) | (214 | ) | (3,408 | ) | ||||||||||||||
Gross profit
|
1,622 | 1,346 | 343 | 785 | 660 | 168 | 3,098 | |||||||||||||||||||||
Selling and marketing expenses
|
(441 | ) | (456 | ) | (116 | ) | (232 | ) | (220 | ) | (56 | ) | (990 | ) | ||||||||||||||
General and administrative expenses
|
(313 | ) | (333 | ) | (85 | ) | (156 | ) | (161 | ) | (41 | ) | (685 | ) | ||||||||||||||
Other income (expenses), net
|
- | - | - | - | 3 | 1 | (1 | ) | ||||||||||||||||||||
Operating profit
|
868 | 557 | 142 | 397 | 282 | 72 | 1,422 | |||||||||||||||||||||
Financing income
|
61 | 83 | 21 | 45 | 45 | 11 | 116 | |||||||||||||||||||||
Financing expenses
|
(203 | ) | (236 | ) | (60 | ) | (120 | ) | (162 | ) | (41 | ) | (409 | ) | ||||||||||||||
Financing expenses, net
|
(142 | ) | (153 | ) | (39 | ) | (75 | ) | (117 | ) | (30 | ) | (293 | ) | ||||||||||||||
Profit before taxes on income
|
726 | 404 | 103 | 322 | 165 | 42 | 1,129 | |||||||||||||||||||||
Taxes on income
|
(176 | ) | (110 | ) | (28 | ) | (78 | ) | (44 | ) | (11 | ) | (304 | ) | ||||||||||||||
Profit for the period
|
550 | 294 | 75 | 244 | 121 | 31 | 825 | |||||||||||||||||||||
Attributable to:
|
||||||||||||||||||||||||||||
Owners of the Company
|
550 | 294 | 75 | 244 | 121 | 31 | 824 | |||||||||||||||||||||
Non-controlling interests
|
- | - | - | - | - | - | 1 | |||||||||||||||||||||
Profit for the period
|
550 | 294 | 75 | 244 | 121 | 31 | 825 | |||||||||||||||||||||
Earnings per share
|
||||||||||||||||||||||||||||
Basic earnings per share (in NIS)
|
5.53 | 2.96 | 0.75 | 2.45 | 1.22 | 0.31 | 8.28 | |||||||||||||||||||||
Diluted earnings per share (in NIS)
|
5.53 | 2.96 | 0.75 | 2.45 | 1.22 | 0.31 | 8.28 |
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
into US dollar
|
translation
into US dollar
|
|||||||||||||||||||||||||||
For the six
months ended
June 30,
|
(Note 2D)
For the six
months ended
June 30,
|
For the three
months ended
June 30,
|
(Note 2D)
For the three
months ended
June 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2011
|
2012
|
2012
|
2011
|
2012
|
2012
|
2011
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Profit for the period
|
550 | 294 | 75 | 244 | 121 | 31 | 825 | |||||||||||||||||||||
Changes in fair value of cash flow hedges transferred to profit or loss
|
11 | (6 | ) | (2 | ) | 6 | (5 | ) | (1 | ) | 20 | |||||||||||||||||
Changes in fair value of cash flow hedges
|
(9 | ) | 7 | 2 | (4 | ) | 15 | 4 | 17 | |||||||||||||||||||
Income tax on other comprehensive income
|
(1 | ) | - | - | (1 | ) | (2 | ) | (1 | ) | (9 | ) | ||||||||||||||||
Other comprehensive income for the period, net of income tax
|
1 | 1 | - | 1 | 8 | 2 | 28 | |||||||||||||||||||||
Total comprehensive income for the period
|
551 | 295 | 75 | 245 | 129 | 33 | 853 | |||||||||||||||||||||
Total comprehensive income
attributable to:
|
||||||||||||||||||||||||||||
Owners of the Company
|
551 | 295 | 75 | 245 | 129 | 33 | 852 | |||||||||||||||||||||
Non-controlling interests
|
- | - | - | - | - | - | 1 | |||||||||||||||||||||
Total comprehensive income for the period
|
551 | 295 | 75 | 245 | 129 | 33 | 853 |
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 six months ended
June 30, 2012 (Unaudited)
|
||||||||||||||||||||||||||||
Balance as of January 1, 2012
|
||||||||||||||||||||||||||||
(Audited)
|
1 | 7 | 175 | 183 | 4 | 187 | 48 | |||||||||||||||||||||
Other comprehensive income for the period, net of tax
|
- | 1 | - | 1 | - | 1 | - | |||||||||||||||||||||
Profit for the period
|
- | - | 294 | 294 | - | 294 | 75 | |||||||||||||||||||||
Share based payments
|
- | - | 3 | 3 | - | 3 | 1 | |||||||||||||||||||||
Dividend paid in cash
|
- | - | (72 | ) | (72 | ) | - | (72 | ) | (19 | ) | |||||||||||||||||
Dividend declared
|
- | - | (130 | ) | (130 | ) | - | (130 | ) | (33 | ) | |||||||||||||||||
Derecognition of non-controlling interests due to loss of control in a consolidated company
|
- | - | - | - | (3 | ) | (3 | ) | (1 | ) | ||||||||||||||||||
Balance as of June 30, 2012 (Unaudited)
|
1 | 8 | 270 | 279 | 1 | 280 | 71 | |||||||||||||||||||||
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 six months ended
June 30, 2011 (Unaudited)
|
||||||||||||||||||||||||||||
Balance as of January 1, 2011 (Audited)
|
1 | (21 | ) | 361 | 341 | - | 341 | 87 | ||||||||||||||||||||
Other comprehensive income for
the period, net of tax
|
- | 1 | - | 1 | - | 1 | - | |||||||||||||||||||||
Profit for the period
|
- | - | 550 | 550 | - | 550 | 140 | |||||||||||||||||||||
Share based payments
|
- | - | 1 | 1 | - | 1 | - | |||||||||||||||||||||
Dividend paid in cash
|
- | - | (303 | ) | (303 | ) | - | (303 | ) | (77 | ) | |||||||||||||||||
Dividend declared
|
- | - | (292 | ) | (292 | ) | - | (292 | ) | (74 | ) | |||||||||||||||||
Balance as of June 30, 2011 (Unaudited)
|
1 | (20 | ) | 317 | 298 | - | 298 | 76 |
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
June 30, 2012 (Unaudited)
|
||||||||||||||||||||||||||||
Balance as of April 1, 2012
(Unaudited)
|
1 | - | 277 | 278 | 4 | 282 | 71 | |||||||||||||||||||||
Other comprehensive income for the period, net of tax
|
- | 8 | - | 8 | - | 8 | 2 | |||||||||||||||||||||
Profit for the period
|
- | - | 121 | 121 | - | 121 | 31 | |||||||||||||||||||||
Share based payments
|
- | - | 2 | 2 | - | 2 | 1 | |||||||||||||||||||||
Dividend declared
|
- | - | (130 | ) | (130 | ) | - | (130 | ) | (33 | ) | |||||||||||||||||
Derecognition of non-controlling interests due to loss of control in a consolidated company
|
- | - | - | - | (3 | ) | (3 | ) | (1 | ) | ||||||||||||||||||
Balance as of June 30, 2012 (Unaudited)
|
1 | 8 | 270 | 279 | 1 | 280 | 71 | |||||||||||||||||||||
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
June 30, 2011 (Unaudited)
|
||||||||||||||||||||||||||||
Balance as of April 1, 2011 (Unaudited)
|
1 | (21 | ) | 364 | 344 | - | 344 | 88 | ||||||||||||||||||||
Other comprehensive income for
the period, net of tax
|
- | 1 | - | 1 | - | 1 | - | |||||||||||||||||||||
Profit for the period
|
- | - | 244 | 244 | - | 244 | 62 | |||||||||||||||||||||
Share based payments
|
- | - | 1 | 1 | - | 1 | - | |||||||||||||||||||||
Dividend declared
|
- | - | (292 | ) | (292 | ) | - | (292 | ) | (74 | ) | |||||||||||||||||
Balance as of June 30, 2011 (Unaudited)
|
1 | (20 | ) | 317 | 298 | - | 298 | 76 |
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 year ended December 31, 2011 (Audited)
|
||||||||||||||||||||||||||||
Balance as of January 1, 2011
|
||||||||||||||||||||||||||||
(Audited)
|
1 | (21 | ) | 361 | 341 | - | 341 | 87 | ||||||||||||||||||||
Other comprehensive income for the year, net of tax
|
- | 28 | - | 28 | - | 28 | 7 | |||||||||||||||||||||
Profit for the year
|
- | - | 824 | 824 | 1 | 825 | 210 | |||||||||||||||||||||
Share based payments
|
- | - | 6 | 6 | - | 6 | 2 | |||||||||||||||||||||
Dividend paid in cash
|
- | - | (827 | ) | (827 | ) | - | (827 | ) | (211 | ) | |||||||||||||||||
Dividend declared
|
- | - | (189 | ) | (189 | ) | (1 | ) | (190 | ) | (48 | ) | ||||||||||||||||
Non-controlling interests in respect of business combination
|
- | - | - | - | 4 | 4 | 1 | |||||||||||||||||||||
Balance as of December 31, 2011 (Audited)
|
1 | 7 | 175 | 183 | 4 | 187 | 48 |
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
into US dollar
|
translation
into US dollar
|
|||||||||||||||||||||||||||
(Note 2D)
|
(Note 2D)
|
|||||||||||||||||||||||||||
For the six
months ended
June 30,
|
For the six
months ended
June 30,
|
For the three
months ended
June 30,
|
For the three
months ended
June 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2011
|
2012
|
2012
|
2011
|
2012
|
2012
|
2011
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Cash flows from operating
activities
|
||||||||||||||||||||||||||||
Profit for the period
|
550 | 294 | 75 | 244 | 121 | 31 | 825 | |||||||||||||||||||||
Adjustments for:
|
||||||||||||||||||||||||||||
Depreciation and amortization
|
336 | 389 | 99 | 168 | 193 | 49 | 738 | |||||||||||||||||||||
Share based payment
|
1 | 3 | 1 | 1 | 2 | 1 | 6 | |||||||||||||||||||||
Loss on sale of property, plant
and equipment
|
- | 1 | - | - | - | - | - | |||||||||||||||||||||
Income tax expense
|
176 | 110 | 28 | 78 | 44 | 11 | 304 | |||||||||||||||||||||
Financing expenses, net
|
142 | 153 | 39 | 75 | 117 | 30 | 293 | |||||||||||||||||||||
Other expenses
|
- | 1 | - | - | - | - | 2 | |||||||||||||||||||||
Changes in operating assets
and liabilities:
|
||||||||||||||||||||||||||||
Change in inventory
|
(38 | ) | 38 | 10 | (19 | ) | 31 | 8 | (67 | ) | ||||||||||||||||||
Change in trade receivables (including long-term amounts)
|
(326 | ) | (34 | ) | (8 | ) | (209 | ) | 24 | 6 | (585 | ) | ||||||||||||||||
Change in other receivables (including long-term amounts)
|
(6 | ) | (42 | ) | (11 | ) | (2 | ) | (24 | ) | (6 | ) | 61 | |||||||||||||||
Changes in trade payables, accrued expenses and provisions
|
117 | (89 | ) | (23 | ) | (5 | ) | (20 | ) | (5 | ) | 146 | ||||||||||||||||
Change in other liabilities (including long-term amounts)
|
12 | 16 | 4 | (6 | ) | (3 | ) | (1 | ) | (52 | ) | |||||||||||||||||
Proceeds from (payments for) derivative hedging contracts, net
|
(9 | ) | 8 | 2 | (6 | ) | 5 | 1 | (14 | ) | ||||||||||||||||||
Income tax paid
|
(206 | ) | (117 | ) | (30 | ) | (86 | ) | (55 | ) | (14 | ) | (325 | ) | ||||||||||||||
Income tax received
|
- | 15 | 4 | - | 8 | 2 | - | |||||||||||||||||||||
Net cash from operating activities
|
749 | 746 | 190 | 233 | 443 | 113 | 1,332 | |||||||||||||||||||||
Cash flows from investing activities
|
||||||||||||||||||||||||||||
Acquisition of property, plant, and equipment
|
(135 | ) | (284 | ) | (73 | ) | (53 | ) | (149 | ) | (38 | ) | (333 | ) | ||||||||||||||
Acquisition of intangible assets
|
(52 | ) | (52 | ) | (13 | ) | (18 | ) | (25 | ) | (6 | ) | (99 | ) | ||||||||||||||
Acquisition of subsidiary, net of cash acquired
|
- | - | - | - | - | - | (1,458 | ) | ||||||||||||||||||||
Change in current investments, net
|
8 | (672 | ) | (171 | ) | 6 | (51 | ) | (13 | ) | 197 | |||||||||||||||||
Proceeds from (payments for) other derivative contracts, net
|
(9 | ) | 3 | 1 | (6 | ) | 1 | - | 1 | |||||||||||||||||||
Proceeds from sale of property, plant and equipment
|
2 | 1 | - | 1 | 1 | - | 3 | |||||||||||||||||||||
Interest received
|
20 | 8 | 2 | 17 | 6 | 2 | 33 | |||||||||||||||||||||
Loan to equity accounted investee
|
- | (1 | ) | - | - | - | - | - | ||||||||||||||||||||
Proceeds from sale of shares in a consolidated company
|
- | 7 | 2 | - | 7 | 2 | - | |||||||||||||||||||||
Net cash used in investing activities
|
(166 | ) | (990 | ) | (252 | ) | (53 | ) | (210 | ) | (53 | ) | (1,656 | ) |
Convenience
|
Convenience
|
|||||||||||||||||||||||||||
translation
|
translation
|
|||||||||||||||||||||||||||
into US dollar
|
into US dollar
|
|||||||||||||||||||||||||||
(Note 2D)
|
(Note 2D)
|
|||||||||||||||||||||||||||
For the six
months ended
June 30,
|
For the six
months ended
June 30,
|
For the three
months ended
June 30,
|
For the three
months ended
June 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2011
|
2012
|
2012
|
2011
|
2012
|
2012
|
2011
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Cash flows from financing
activities
|
||||||||||||||||||||||||||||
Proceeds from (payments for derivative contracts, net
|
10 | (6 | ) | (2 | ) | 6 | (5 | ) | (2 | ) | 11 | |||||||||||||||||
Repayment of long term loans from banks
|
- | (4 | ) | (1 | ) | - | (4 | ) | (1 | ) | (4 | ) | ||||||||||||||||
Repayment of debentures
|
(175 | ) | (479 | ) | (122 | ) | - | - | - | (354 | ) | |||||||||||||||||
Proceeds from issuance of debentures, net of issuance costs
|
1,033 | 992 | 253 | - | - | - | 2,165 | |||||||||||||||||||||
Dividend paid
|
(334 | ) | (261 | ) | (67 | ) | (303 | ) | (72 | ) | (18 | ) | (858 | ) | ||||||||||||||
Interest paid
|
(123 | ) | (182 | ) | (46 | ) | - | (1 | ) | - | (245 | ) | ||||||||||||||||
Net cash from (used in) financing activities
|
411 | 60 | 15 | (297 | ) | (82 | ) | (21 | ) | 715 | ||||||||||||||||||
Cash balance presented under assets held for sale/ Cash outflow due to sale of assets held for sale
|
- | - | - | - | (3 | ) | (1 | ) | (4 | ) | ||||||||||||||||||
Changes in cash and cash equivalents
|
994 | (184 | ) | (47 | ) | (117 | ) | 148 | 38 | 387 | ||||||||||||||||||
Cash and cash equivalents as at the beginning of the period
|
533 | 920 | 235 | 1,644 | 588 | 150 | 533 | |||||||||||||||||||||
Cash and cash equivalents as at the end of the period
|
1,527 | 736 | 188 | 1,527 | 736 | 188 | 920 |
A.
|
Statement of compliance
|
B.
|
Functional and presentation currency
|
C.
|
Basis of measurement
|
D.
|
Convenience translation into U.S. dollars (“dollars” or “$”)
|
E.
|
Use of estimates and judgments
|
F.
|
Exchange rates and Consumer Price Indexes are as follows:
|
Exchange rates
of US$
|
Consumer Price
Index (points)*
|
|||||||
As of June 30, 2012
|
3.923 | 218.35 | ||||||
As of June 30, 2011
|
3.415 | 216.27 | ||||||
As of December 31, 2011
|
3.821 | 216.27 | ||||||
Increase (decrease) during the period:
|
||||||||
Six months ended June 30, 2012
|
2.7% | 1.0% | ||||||
Six months ended June 30, 2011
|
(3.8%) | 2.2% | ||||||
Three months ended June 30, 2012
|
5.6% | 0.6% | ||||||
Three months ended June 30, 2011
|
(1.9%) | 1.5% | ||||||
Year ended December 31, 2011
|
7.7% | 2.2% | ||||||
*According to 1993 base index.
|
·
|
It is held within a business model whose objective is to hold assets in order to collect contractual cash flows.
|
·
|
The contractual terms of the financial asset, give rise, on specified dates, to cash flows that are solely payments of principal and interest; and
|
·
|
The Group has not chosen to designate it at fair value through profit or loss in order to eliminate or significantly reduce an accounting mismatch.
|
|
—
|
Cellcom - the segment includes Cellcom Israel Ltd. and its subsidiaries, excluding Netvision Ltd. and its subsidiaries.
|
|
—
|
Netvision - the segment includes Netvision Ltd. and its subsidiaries.
|
Six-month period ended June 30, 2012
|
||||||||||||||||
NIS millions | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Cellcom
|
Netvision
|
Reconciliation
for
consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
2,555 | 528 | - | 3,083 | ||||||||||||
Inter-segment revenues
|
11 | 24 | (35 | ) | - | |||||||||||
EBITDA*
|
809 | 140 | - | 949 | ||||||||||||
Reconciliation of reportable segment
EBITDA to profit for the period |
||||||||||||||||
Depreciation and amortization
|
(284 | ) | (51 | ) | (54 | ) | (389 | ) | ||||||||
Taxes on income
|
(104 | ) | (20 | ) | 14 | (110 | ) | |||||||||
Financing income
|
83 | |||||||||||||||
Financing expenses
|
(236 | ) | ||||||||||||||
Share based payments
|
(3 | ) | ||||||||||||||
Profit for the period
|
266 | 68 | (40 | ) | 294 |
Three-month period ended June 30, 2012
|
||||||||||||||||
NIS millions | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Cellcom
|
Netvision
|
Reconciliation
for
consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
1,234 | 264 | - |
1,498
|
||||||||||||
Inter-segment revenues
|
5 | 13 | (18 | ) | - | |||||||||||
EBITDA*
|
399 | 75 | - | 474 | ||||||||||||
Reconciliation of reportable segment EBITDA to profit for the period
|
||||||||||||||||
Depreciation and amortization
|
(140 | ) | (24 | ) | (29 | ) | (193 | ) | ||||||||
Taxes on income
|
(42 | ) | (9 | ) | 7 | (44 | ) | |||||||||
Financing income
|
45 | |||||||||||||||
Financing expenses
|
(162 | ) | ||||||||||||||
Other income
|
3 | |||||||||||||||
Share based payments
|
(2 | ) | ||||||||||||||
Profit for the period
|
100 | 43 | (22 | ) | 121 |
Year ended December 31, 2011
|
||||||||||||||||
NIS millions | ||||||||||||||||
(Audited) | ||||||||||||||||
Cellcom
|
Netvision**
|
Reconciliation
for
consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
6,125
|
381 | - |
6,506
|
||||||||||||
Inter-segment revenues
|
7 | 19 | (26 | ) | - | |||||||||||
EBITDA*
|
2,084
|
83 | - |
2,167
|
||||||||||||
Reconciliation of reportable segment EBITDA to profit for the year
|
||||||||||||||||
Depreciation and amortization
|
(652 | ) | (40 | ) | (46 | ) | (738 | ) | ||||||||
Taxes on income
|
(313 | ) | (2 | ) | 11 | (304 | ) | |||||||||
Financing income
|
116 | |||||||||||||||
Financing expenses
|
(409 | ) | ||||||||||||||
Other expenses
|
(1
|
) | ||||||||||||||
Share based payments
|
(6 | ) | ||||||||||||||
Profit for the year
|
821 | 39 | (35 | ) | 825 |
|
* EBITDA as reviewed by the CODM, represents earnings before interest (financing expenses, net), taxes, other income (expenses), depreciation and amortization and share based payments, as a measure of operating profit. EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for other companies.
|
|
** Netvision segment represents results of operations for the four month period commencing September 1, 2011.
|
·
|
a Net Leverage* exceeding 5, or exceeding 4.5 during four consecutive quarters, shall constitute an event of default;
|
·
|
not to distribute more than 95% of the profits available for distribution according to the Israeli Companies law (“Profits”); provided that if the Net Leverage* exceeds 3.5, the Company will not distribute more than 85% of its Profits and if the Net Leverage* exceeds 4, the Company will not distribute more than 70% of its Profits. Failure to comply with this covenant shall constitute an event of default;
|
·
|
cross default, excluding following an immediate repayment initiated in relation to a liability of NIS 150 million or less, shall constitute an event of default;
|
·
|
Negative pledge, subject to certain exceptions. Failure to comply with this covenant shall constitute an event of default;
|
·
|
an obligation to pay additional interest of 0.25% for two-notch downgrade in the debentures' rating in comparison to the rating given to the debentures prior to their issuance and an obligation to pay additional interest of 0.25% for any additional one-notch downgrade up to a maximum addition of 1%;
|
·
|
Failure to have the debentures rated over a period of 60 days, shall constitute an event of default.
|
*
|
Net Leverage - the ratio of Net Debt to EBITDA, excluding one-time influences.
|
In the ordinary course of business, the Group is involved in various lawsuits against it. The costs that may result from these lawsuits are only accrued for when it is more likely than not that a liability, resulting from past events, will be incurred and the amount of that liability can be quantified or estimated within a reasonable range. The amount of the provisions recorded is based on a case-by-case assessment of the risk level, while events that occur in the course of the litigation may require a reassessment of this risk. The Group’s assessment of risk is based both on the advice of its legal counsels and on the Group's estimate of the probable settlements amounts that are expected to be incurred, if such settlements will be agreed by both parties. The provision recorded in the condensed consolidated interim financial statements in respect of all lawsuits against the Group amounts to NIS 66 million.
|
|
Consumer claims
|
|
During the reported period, fourteen purported class actions for a total sum of approximately NIS 628 million, were dismissed, of which two, for the total sum of approximately NIS 116 million were included in note 31(1) to the annual financial statements. Two additional purported class actions, for which no sum claimed was specified, were also dismissed.
|
|
Employees, subcontractors, suppliers, authorities and other claims
|
|
During the reporting period, a lawsuit for a total sum claimed of approximately NIS 28 million, was dismissed with prejudice, following, a settlement agreement in an immaterial amount to the Group. The Group recorded a proper provision in respect of the settlement agreement.
|
A.
|
In March 2012, the previously reported bill, proposing to completely annul Early Termination Fees in relation to new cellular customers with less than a certain number of phone lines, was enacted by the Israeli parliament and will apply retroactively to customers joining the cellular operators as of November 2011. In addition, this law prohibits cellular operators to make any linkage between a cellular services transaction and a handset purchase transaction, including by way of offering airtime rebates or refunds for handsets, as of January 1, 2013.
|
B.
|
In May 2012, the Israeli Minister of Communications published a policy document in relation to the wholesale market in the wireline communications market in Israel. The document adopts the main recommendations of the public committee appointed by the Ministry of Communications to examine Bezeq's tariffs structure and tariffs for wireline wholesale services.
|
(1)
|
The wholesale market's tariffs and terms of agreement shall be agreed through negotiations between the owners of the wireline infrastructure (Bezeq and Hot) and the other operators. An infrastructure owner that reaches an agreement with such other operator, shall be obligated to offer the same terms, without discrimination, to all operators, including its affiliates. The Ministry of Communications shall intervene in the negotiations or in the terms of the agreement between the parties in case an agreement has not been reached within six months from the date of the policy document or in case the agreement between the parties includes terms that may harm the competition or the public. In addition, the Minister may intervene in a retail tariff that was set by the owner of wireline infrastructure or its affiliate that harms the competition, through changing of the wholesale tariff.
|
(2)
|
The structural separation between an owner of wireline infrastructure and its international landline operator and internet service provider affiliates shall be annulled within nine months from the date of execution of an agreement between such owner of wireline infrastructure and other operator and shall be replaced by an accounting separation. The Minister shall consider providing leniencies in relation to or annulment of the structural separation between an owner of wireline infrastructure and its cellular operator affiliate according to the pace of development of a wholesale market and the state of competition in the market. In case an effective wholesale market does not develop within twenty four months from the date of the policy document, the Ministry of Communications shall operate to impose a structural separation in the owners of the wireline infrastructure between the infrastructure and the services provided through this infrastructure.
|
(3)
|
The Minister of Communications shall consider to annul the structural separation in relation to television broadcasting services if there is a reasonable possibility to provide a basic package of television services through the internet. The Minister of Communications shall consider imposing a requirement to provide television broadcasting services for the same price within a package of telecommunications services and separately.
|
C.
|
Following previous reports as to the expected changes in royalties paid by the Company to the Ministry of Communications, following a petition filed by the Company and two other cellular operators, the Communication Regulations (Bezeq and Transmissions) (Royalties) 2001, were amended on August 1, 2012 as follows:
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•
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For cellular services - from January 1, 2012 to May 23, 2012 - 2.5%; from May 24, 2012 to July 31, 2012 - 1%; from August 1, 2012 to December 31, 2012 - 0.292% provided the 2012 annual rate shall be 1.3% and as of January 1, 2013 - 0%.
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•
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For landline and long distance services (for which the Company pays 1% for 2012) - as of January 1, 2013 - 0%.
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CELLCOM ISRAEL LTD.
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Date:
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August 14, 2012
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By:
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/s/ Liat Menahemi Stadler
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Name:
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Liat Menahemi Stadler
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Title:
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General Counsel
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