1.
|
Cellcom Israel Announces Third Quarter 2014 Results
|
2.
|
Cellcom Israel Ltd. and Subsidiaries - Financial Statements as at September 30, 2014
|
§
|
Total Revenues decreased 6.7% to NIS 1,142 million ($309 million)
|
§
|
Service revenues decreased 13.1% to NIS 880 million ($238 million)
|
§
|
Equipment revenues increased by 24.2% to NIS 262 million ($71 million)
|
§
|
EBITDA decreased 0.3% to NIS 346 million ($94 million)
|
§
|
EBITDA excluding one-time effect decreased 13.0% to NIS 302 million ($82 million)
|
§
|
EBITDA margin 30.3%, up from 28.3%
|
§
|
EBITDA margin excluding one-time effect 26.4%, down from 28.3%
|
§
|
Operating income increased by 9.8% to NIS 190 million ($52 million)
|
§
|
Operating income excluding one-time effect decreased 15.6% to NIS 146 million ($40 million)
|
§
|
Net income increased by 103.8% to NIS 106 million ($29 million)
|
§
|
Net income excluding one-time effect increased by 42.3% to NIS 74 million ($20 million)
|
§
|
Free cash flow2 decreased 22.1% to NIS 303 million ($82 million)
|
§
|
Cellular subscriber base totaled approx. 3.010 million subscribers (at the end of September 2014)
|
1
|
See details regarding a one-time positive effect in the amount of NIS 44 million (NIS 32 million net of tax) in "Cost of revenues" section in this press release.
|
2
|
See "Use of Non-IFRS financial measures" section in this press release.
|
Q3/2014 3
|
Q3/2013
|
% Change
|
Q3/2014
|
Q3/2013
|
|
NIS million
|
US$ million
(convenience translation)
|
||||
Total revenues
|
1,142
|
1,224
|
(6.7%)
|
309.1
|
331.3
|
Operating Income
|
190
|
173
|
9.8%
|
51.4
|
46.8
|
Net Income
|
106
|
52
|
103.8%
|
28.7
|
14.1
|
Free cash flow
|
303
|
389
|
(22.1%)
|
82.0
|
105.3
|
EBITDA
|
346
|
347
|
(0.3%)
|
93.6
|
93.9
|
EBITDA, as percent of total revenues
|
30.3%
|
28.3%
|
7.1%
|
Cellcom Israel (*)
|
Netvision (**)
|
Consolidation
adjustments (***)
|
Consolidated results
|
|
Q3/2014
|
||||
NIS million
|
||||
Total revenues
|
930
|
241
|
(29)
|
1,142
|
Service revenues
|
680
|
226
|
(26)
|
880
|
Equipment revenues
|
250
|
15
|
(3)
|
262
|
Operating Income
|
146
|
57
|
(13)
|
190
|
EBITDA
|
268
|
78
|
-
|
346
|
EBITDA, as percent of total revenues
|
28.8%
|
32.4%
|
-
|
30.3%
|
(*)
|
Cellcom Israel Ltd. and its subsidiaries, excluding Netvision Ltd. and its subsidiaries.
|
(**)
|
Netvision Ltd. and its subsidiaries.
|
(***)
|
Include elimination of inter-company revenues between Cellcom Israel and Netvision, and amortization expenses attributable to the merger.
|
3
|
The results for the third quarter of 2014 include a one-time positive effect of NIS 44 million (NIS 32 million net of tax). EBITDA for the third quarter of 2014 excluding this one-time effect totaled NIS 302 million, a 13.0% decrease compared with the third quarter of 2013 and EBITDA margin totaled 26.4%. Operating income for the third quarter of 2014 excluding this one-time effect totaled NIS 146 million, a 15.6% decrease compared with the third quarter of 2013, and net income for the third quarter of 2014 totaled NIS 74 million, a 42.3% increase compared with the third quarter of 2013. For details regarding the one-time effect see "Cost of revenues" section in this press release.
|
Q3/2014
|
Q3/2013
|
Change (%)
|
|
Cellular subscribers at the end of period (in thousands)
|
3,010
|
3,156
|
(4.6%)
|
Churn Rate for cellular subscribers (in %)
|
11.0%
|
8.9%
|
23.6%
|
Monthly cellular ARPU (in NIS)
|
70.6
|
79.6
|
(11.3%)
|
US Dial-in Number: 1 888 281 1167 | UK Dial-in Number: 0 800 917 9141 |
Israel Dial-in Number: 03 918 0644 | International Dial-in Number: +972 3 918 0644 |
Company Contact
Shlomi Fruhling
Chief Financial Officer
investors@cellcom.co.il
Tel: +972 52 998 9755
|
Investor Relations Contact
Ehud Helft
GK Investor & Public Relations in partnership with LHA
cellcom@gkir.com
Tel: +1 617 418 3096
|
September 30,
2013
|
September 30,
2014
|
Convenience
translation
into US dollar
(Note 2D)
September 30,
2014
|
December 31,
2013
|
|||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
827 | 989 | 268 | 1,057 | ||||||||||||
Current investments, including derivatives
|
511 | 531 | 144 | 513 | ||||||||||||
Trade receivables
|
1,790 | 1,473 | 398 | 1,731 | ||||||||||||
Other receivables
|
76 | 75 | 20 | 63 | ||||||||||||
Inventory
|
89 | 91 | 25 | 84 | ||||||||||||
Total current assets
|
3,293 | 3,159 | 855 | 3,448 | ||||||||||||
Trade and other receivables
|
904 | 797 | 216 | 854 | ||||||||||||
Property, plant and equipment, net
|
1,907 | 1,793 | 485 | 1,865 | ||||||||||||
Intangible assets, net
|
1,418 | 1,317 | 356 | 1,390 | ||||||||||||
Deferred tax assets
|
25 | 18 | 5 | 22 | ||||||||||||
Total non-current assets
|
4,254 | 3,925 | 1,062 | 4,131 | ||||||||||||
Total assets
|
7,547 | 7,084 | 1,917 | 7,579 | ||||||||||||
Liabilities
|
||||||||||||||||
Current maturities of debentures and long term loans and short term credit
|
1,101 | 1,094 | 296 | 1,100 | ||||||||||||
Trade payables and accrued expenses
|
608 | 714 | 193 | 582 | ||||||||||||
Current tax liabilities
|
69 | 83 | 23 | 99 | ||||||||||||
Provisions
|
181 | 97 | 26 | 187 | ||||||||||||
Other payables, including derivatives
|
361 | 321 | 87 | 398 | ||||||||||||
Total current liabilities
|
2,320 | 2,309 | 625 | 2,366 | ||||||||||||
Long-term loans from banks
|
5 | - | - | 5 | ||||||||||||
Debentures
|
4,337 | 3,553 | 961 | 4,332 | ||||||||||||
Provisions
|
21 | 21 | 6 | 21 | ||||||||||||
Other long-term liabilities
|
12 | 9 | 3 | 10 | ||||||||||||
Liability for employee rights upon retirement, net
|
16 | 12 | 3 | 13 | ||||||||||||
Deferred tax liabilities
|
146 | 145 | 39 | 122 | ||||||||||||
Total non-current liabilities
|
4,537 | 3,740 | 1,012 | 4,503 | ||||||||||||
Total liabilities
|
6,857 | 6,049 | 1,637 | 6,869 | ||||||||||||
Equity attributable to owners of the Company
|
||||||||||||||||
Share capital
|
1 | 1 | - | 1 | ||||||||||||
Cash flow hedge reserve
|
(15 | ) | (6 | ) | (2 | ) | (13 | ) | ||||||||
Retained earnings
|
701 | 1,026 | 278 | 719 | ||||||||||||
Non-controlling interests
|
3 | 14 | 4 | 3 | ||||||||||||
Total equity
|
690 | 1,035 | 280 | 710 | ||||||||||||
Total liabilities and equity
|
7,547 | 7,084 | 1,917 | 7,579 |
For the nine
months ended
September 30,
|
Convenience
translation
into US dollar
For the nine
months ended
September 30,
|
For the three
months ended
September 30,
|
Convenience
translation
into US dollar
For the three
months ended
September 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2013
|
2014
|
2014
|
2013
|
2014
|
2014
|
2013
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
Revenues
|
3,718 | 3,430 | 928 | 1,224 | 1,142 | 309 | 4,927 | |||||||||||||||||||||
Cost of revenues
|
(2,278 | ) | (1,995 | ) | (540 | ) | (745 | ) | (660 | ) | (178 | ) | (2,990 | ) | ||||||||||||||
Gross profit
|
1,440 | 1,435 | 388 | 479 | 482 | 131 | 1,937 | |||||||||||||||||||||
Selling and marketing expenses
|
(522 | ) | (505 | ) | (137 | ) | (166 | ) | (171 | ) | (46 | ) | (717 | ) | ||||||||||||||
General and administrative expenses
|
(438 | ) | (356 | ) | (96 | ) | (138 | ) | (118 | ) | (32 | ) | (570 | ) | ||||||||||||||
Other income (expenses), net
|
1 | (43 | ) | (12 | ) | (2 | ) | (3 | ) | (1 | ) | 1 | ||||||||||||||||
Operating profit
|
481 | 531 | 143 | 173 | 190 | 52 | 651 | |||||||||||||||||||||
Financing income
|
118 | 86 | 23 | 36 | 33 | 9 | 156 | |||||||||||||||||||||
Financing expenses
|
(334 | ) | (228 | ) | (61 | ) | (128 | ) | (84 | ) | (23 | ) | (402 | ) | ||||||||||||||
Financing expenses, net
|
(216 | ) | (142 | ) | (38 | ) | (92 | ) | (51 | ) | (14 | ) | (246 | ) | ||||||||||||||
Profit before taxes on income
|
265 | 389 | 105 | 81 | 139 | 38 | 405 | |||||||||||||||||||||
Taxes on income
|
(79 | ) | (90 | ) | (24 | ) | (29 | ) | (33 | ) | (9 | ) | (117 | ) | ||||||||||||||
Profit for the period
|
186 | 299 | 81 | 52 | 106 | 29 | 288 | |||||||||||||||||||||
Attributable to:
|
||||||||||||||||||||||||||||
Owners of the Company
|
185 | 298 | 81 | 52 | 105 | 29 | 287 | |||||||||||||||||||||
Non-controlling interests
|
1 | 1 | - | - | 1 | - | 1 | |||||||||||||||||||||
Profit for the period
|
186 | 299 | 81 | 52 | 106 | 29 | 288 | |||||||||||||||||||||
Earnings per share
|
||||||||||||||||||||||||||||
Basic earnings per share (in NIS)
|
1.87 | 3.00 | 0.81 | 0.53 | 1.06 | 0.29 | 2.89 | |||||||||||||||||||||
Diluted earnings per share (in NIS)
|
1.85 | 2.97 | 0.80 | 0.52 | 1.05 | 0.28 | 2.86 |
For the nine
months ended
September 30,
|
Convenience
translation
into US dollar
For the nine
months ended
September 30,
|
For the three
months ended
September 30,
|
Convenience
translation
into US dollar
For the threemonths ended
September 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2013
|
2014
|
2014
|
2013
|
2014
|
2014
|
2013
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
Cash flows from operating activities
|
||||||||||||||||||||||||||||
Profit for the period
|
186 | 299 | 81 | 52 | 106 | 29 | 288 | |||||||||||||||||||||
Adjustments for:
|
||||||||||||||||||||||||||||
Depreciation and amortization
|
513 | 462 | 125 | 171 | 152 | 41 | 676 | |||||||||||||||||||||
Share based payment
|
7 | 3 | 1 | 1 | 1 | - | 9 | |||||||||||||||||||||
Loss on sale of property, plant and equipment
|
2 | 4 | 1 | 1 | 2 | 1 | 2 | |||||||||||||||||||||
Income tax expense
|
79 | 90 | 24 | 29 | 33 | 9 | 117 | |||||||||||||||||||||
Financing expenses, net
|
216 | 142 | 38 | 92 | 51 | 14 | 246 | |||||||||||||||||||||
Other expenses
|
(3 | ) | - | - | - | - | - | (3 | ) | |||||||||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||||||||||||||
Change in inventory
|
22 | (7 | ) | (2 | ) | 11 | (3 | ) | (1 | ) | 27 | |||||||||||||||||
Change in trade receivables (including long-term amounts)
|
434 | 367 | 99 | 160 | 72 | 19 | 576 | |||||||||||||||||||||
Change in other receivables (including long-term amounts)
|
(29 | ) | (32 | ) | (8 | ) | 19 | 51 | 14 | (34 | ) | |||||||||||||||||
Changes in trade payables, accrued expenses and provisions
|
(141 | ) | (7 | ) | (2 | ) | (38 | ) | (33 | ) | (9 | ) | (185 | ) | ||||||||||||||
Change in other liabilities (including long-term amounts)
|
(15 | ) | 46 | 13 | (8 | ) | (20 | ) | (5 | ) | (33 | ) | ||||||||||||||||
Payments for derivative hedging contracts, net
|
(10 | ) | (6 | ) | (2 | ) | (4 | ) | - | - | (17 | ) | ||||||||||||||||
Income tax paid
|
(87 | ) | (87 | ) | (23 | ) | (26 | ) | (32 | ) | (9 | ) | (119 | ) | ||||||||||||||
Income tax received
|
6 | 6 | 2 | - | 6 | 2 | 6 | |||||||||||||||||||||
Net cash from operating activities
|
1,180 | 1,280 | 347 | 460 | 386 | 105 | 1,556 | |||||||||||||||||||||
Cash flows from investing activities
|
||||||||||||||||||||||||||||
Acquisition of property, plant, and equipment
|
(228 | ) | (197 | ) | (54 | ) | (57 | ) | (70 | ) | (19 | ) | (275 | ) | ||||||||||||||
Acquisition of intangible assets
|
(64 | ) | (60 | ) | (16 | ) | (16 | ) | (16 | ) | (4 | ) | (90 | ) | ||||||||||||||
Change in current investments, net
|
(16 | ) | (18 | ) | (5 | ) | (6 | ) | (4 | ) | (1 | ) | (16 | ) | ||||||||||||||
Proceeds from (payments for) other derivative contracts, net
|
(7 | ) | (1 | ) | - | (2 | ) | 1 | - | (10 | ) | |||||||||||||||||
Proceeds from sale of property, plant and equipment
|
12 | 4 | 1 | 2 | 1 | - | 17 | |||||||||||||||||||||
Interest received
|
24 | 21 | 6 | 5 | 4 | 1 | 29 | |||||||||||||||||||||
Dividend received
|
1 | - | - | - | - | - | 1 | |||||||||||||||||||||
Net cash used in investing activities
|
(278 | ) | (251 | ) | (68 | ) | (74 | ) | (84 | ) | (23 | ) | (344 | ) |
For the nine
months ended
September 30,
|
Convenience
translation
into US dollar
For the nine
months ended
September 30,
|
For the three
months ended
September 30,
|
Convenience
translation
into US dollar
For the three
months ended
September 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2013
|
2014
|
2014
|
2013
|
2014
|
2014
|
2013
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
Cash flows from financing activities
|
||||||||||||||||||||||||||||
Payments for derivative contracts, net
|
(5 | ) | (21 | ) | (6 | ) | (1 | ) | (7 | ) | (2 | ) | (8 | ) | ||||||||||||||
Repayment of long term loans from banks
|
(6 | ) | (12 | ) | (3 | ) | (6 | ) | (1 | ) | - | (6 | ) | |||||||||||||||
Repayment of debentures
|
(1,124 | ) | (1,092 | ) | (295 | ) | (563 | ) | (569 | ) | (154 | ) | (1,124 | ) | ||||||||||||||
Proceeds from issuance of debentures, net of issuance costs
|
- | 326 | 88 | - | 326 | 88 | - | |||||||||||||||||||||
Dividend paid
|
- | (4 | ) | (1 | ) | - | - | - | (81 | ) | ||||||||||||||||||
Interest paid
|
(354 | ) | (294 | ) | (80 | ) | (174 | ) | (145 | ) | (39 | ) | (350 | ) | ||||||||||||||
Net cash used in financing activities
|
(1,489 | ) | (1,097 | ) | (297 | ) | (744 | ) | (396 | ) | (107 | ) | (1,569 | ) | ||||||||||||||
Changes in cash and cash equivalents
|
(587 | ) | (68 | ) | (18 | ) | (358 | ) | (94 | ) | (25 | ) | (357 | ) | ||||||||||||||
Cash and cash equivalents as at the beginning of the period
|
1,414 | 1,057 | 286 | 1,185 | 1,083 | 293 | 1,414 | |||||||||||||||||||||
Cash and cash equivalents as at the end of the period
|
827 | 989 | 268 | 827 | 989 | 268 | 1,057 |
Three-month period ended
September 30,
|
Year ended
December 31,
|
|||||||||||||||
Convenience
translation
into US dollar
|
||||||||||||||||
2013
NIS millions
|
2014
NIS millions
|
2014
US$ millions
|
2013
NIS millions
|
|||||||||||||
Profit for the period
|
52 | 106 | 29 | 288 | ||||||||||||
Taxes on income
|
29 | 33 | 9 | 117 | ||||||||||||
Financing income
|
(36 | ) | (33 | ) | (9 | ) | (156 | ) | ||||||||
Financing expenses
|
128 | 84 | 23 | 402 | ||||||||||||
Other expenses (income)
|
2 | 3 | 1 | (1 | ) | |||||||||||
Depreciation and amortization
|
171 | 152 | 41 | 676 | ||||||||||||
Share based payments
|
1 | 1 | - | 9 | ||||||||||||
EBITDA
|
347 | 346 | 94 | 1,335 |
Three-month period ended
September 30,
|
Year ended
December 31,
|
|||||||||||||||
Convenience
translation
into US dollar
|
||||||||||||||||
2013
NIS millions
|
2014
NIS millions
|
2014
US$ millions
|
2013
NIS millions
|
|||||||||||||
Cash flows from operating activities
|
460 | 386 | 105 | 1,556 | ||||||||||||
Cash flows from investing activities
|
(74 | ) | (84 | ) | (23 | ) | (344 | ) | ||||||||
Short-term Investment in (sale of) tradable debentures and deposits (*)
|
3 | 1 | - | (2 | ) | |||||||||||
Free cash flow
|
389 | 303 | 82 | 1,210 |
NIS millions unless otherwise stated
|
Q3-2012 | Q4-2012 | Q1-2013 | Q2-2013 | Q3-2013 | Q4-2013 | Q1-2014 | Q2-2014 | Q3-2014 |
FY-2012
|
FY-2013
|
|||||||||||||||||||||||||||||||||
Cellcom service revenues
|
902 | 828 | 758 | 790 | 789 | 774 | 728 | 728 | 680 | 3,617 | 3,112 | |||||||||||||||||||||||||||||||||
Netvision service revenues
|
276 | 260 | 254 | 246 | 251 | 229 | 223 | 220 | 226 | 1,052 | 979 | |||||||||||||||||||||||||||||||||
Cellcom equipment revenues
|
285 | 310 | 256 | 213 | 205 | 208 | 188 | 221 | 250 | 1,274 | 882 | |||||||||||||||||||||||||||||||||
Netvision equipment revenues
|
15 | 31 | 17 | 13 | 6 | 24 | 15 | 14 | 15 | 82 | 60 | |||||||||||||||||||||||||||||||||
Consolidation adjustments
|
(30 | ) | (22 | ) | (27 | ) | (26 | ) | (27 | ) | (26 | ) | (24 | ) | (25 | ) | (29 | ) | (87 | ) | (106 | ) | ||||||||||||||||||||||
Total revenues
|
1,448 | 1,407 | 1,258 | 1,236 | 1,224 | 1,209 | 1,130 | 1,158 | 1,142 | 5,938 | 4,927 | |||||||||||||||||||||||||||||||||
Cellcom EBITDA
|
355 | 306 | 251 | 271 | 286 | 258 | 265 | 224 | 268 | 1,470 | 1,066 | |||||||||||||||||||||||||||||||||
Netvision EBITDA
|
75 | 68 | 63 | 68 | 61 | 77 | 75 | 90 | 78 | 283 | 269 | |||||||||||||||||||||||||||||||||
Total EBITDA
|
430 | 374 | 314 | 339 | 347 | 335 | 340 | 314 | 346 | 1,753 | 1,335 | |||||||||||||||||||||||||||||||||
Operating profit
|
239 | 189 | 139 | 169 | 173 | 170 | 185 | 156 | 190 | 985 | 651 | |||||||||||||||||||||||||||||||||
Financing expenses, net
|
64 | 42 | 46 | 78 | 92 | 30 | 27 | 64 | 51 | 259 | 246 | |||||||||||||||||||||||||||||||||
Profit for the period
|
124 | 113 | 67 | 67 | 52 | 102 | 114 | 79 | 106 | 531 | 288 | |||||||||||||||||||||||||||||||||
Free cash flow
|
414 | 288 | 168 | 345 | 389 | 308 | 366 | 361 | 303 | 1,130 | 1,210 | |||||||||||||||||||||||||||||||||
Cellular subscribers at the end of period (in 000's)
|
3,338 | *3,199 | 3,166 | 3,151 | 3,156 | **3,092 | 3,049 | 3,029 | 3,010 | 3,199 | 3,092 | |||||||||||||||||||||||||||||||||
Monthly cellular ARPU (in NIS)
|
86.7 | 82.4 | 75.9 | 79.7 | 79.6 | 78.7 | 74.7 | 75.4 | 70.6 | 87.5 | 78.5 | |||||||||||||||||||||||||||||||||
Churn rate for cellular subscribers (%)
|
8.6 | % | 8.7 | % | 9.4 | % | 9.0 | % | 8.9 | % | 9.9 | % | 11.1 | % | 11.1 | % | 11.0 | % | 31.5 | % | 36.8 | % |
Series
|
Original Issuance Date
|
Principal on the Date of Issuance
|
As of 30.09.2014
|
As of 11.11.2014
|
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
|
|||||||
B(4) **
|
22/12/05
02/01/06*
05/01/06*
10/01/06*
31/05/06*
|
925.102
|
555.061
|
669.990
|
26.072
|
696.062
|
729.795
|
555.061
|
668.025
|
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.
|
D **
|
07/10/07
03/02/08*
06/04/09*
30/03/11*
18/08/11*
|
2,423.075
|
1,453.846
|
1,712.196
|
22.155
|
1,734.351
|
1,866.010
|
1,453.846
|
1,707.175
|
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
|
899.481
|
899.481
|
41.278
|
940.759
|
996.985
|
899.481
|
899.481
|
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)(6)**
|
20/03/12
|
714.802
|
714.802
|
739.679
|
8.110
|
747.789
|
856.619
|
714.802
|
737.511
|
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
|
285.198
|
285.198
|
4.752
|
289.950
|
336.933
|
285.198
|
285.198
|
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)
|
08/07/14
|
105.962
|
105.962
|
106.274
|
0.490
|
106.764
|
110.582
|
105.962
|
105.962
|
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)
|
08/07/14
|
222.667
|
222.667
|
222.667
|
2.147
|
224.814
|
237.897
|
222.667
|
222.667
|
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
|
Total
|
6,475.768
|
4,237.017
|
4,635.485
|
105.004
|
4,740.489
|
5,134.821
|
4,237.017
|
4,626.018
|
(1) In the reporting period, the company fulfilled all terms of the debentures. The company also fulfilled all terms of the Indentures. Debentures F through I financial covenants - as of September 30, 2014 the net leverage (net debt to EBITDA excluding one-time events ratio- see definition in the Company's annual report for the year ended December 31, 2013 on Form 20-F, under "Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Debt Service ") was 2.39 (the net leverage without excluding one-time events was 2.34). In the reporting period, no cause for early repayment occurred. (2) Including interest accumulated in the books and excluding net balance of premium on debentures and deferred issuance expenses. (3) Annual payments, excluding series F through I debentures in which the payments are semi-annual. (4) Regarding Debenture series B and F through I - the company undertook not to create any pledge on its assets, as long as debentures are not fully repaid, subject to certain exclusions. (5) Regarding Debenture series F through I- the company has the right for early redemption under certain terms (see the Company's annual report for the year ended December 31, 2013 on Form 20-F, under "Item 5. Operating and Financial Review and Prospects– B. Liquidity and Capital Resources – Debt Service"). (6) Regarding Debenture series F and G - in June 2013, following a second decrease of the Company's debenture rating since their issuance, the annual interest rate has been increased by 0.25% to 4.60% and 6.99%, respectively, beginning July 5, 2013.
|
Series | Rating Company |
Rating as of
30.09.2014 (1)
|
Rating as of
11.11.2014
|
Rating assigned
upon issuance
of the Series
|
Recent date of
rating as of
11.11.2014
|
Additional ratings between original issuance and the recent date of rating as of 11.11.2014 (2) | |
Rating
|
|||||||
B
|
S&P Maalot
|
A+
|
A+
|
AA-
|
8/2014
|
5/2006, 9/2007, 1/2008, 10/2008, 3/2009, 9/2010, 8/2011, 1/2012, 3/2012, 5/2012, 11/2012, 6/2013, 6/2014, 8/2014
|
AA-,AA,AA-,A+ (2)
|
D
|
S&P Maalot
|
A+
|
A+
|
AA-
|
8/2014
|
1/2008, 10/2008, 3/2009, 9/2010, 8/2011, 1/2012, 3/2012, 5/2012, 11/2012, 6/2013, 6/2014, 8/2014
|
AA-, AA,AA-,A+ (2)
|
E
|
S&P Maalot
|
A+
|
A+
|
AA
|
8/2014
|
9/2010, 8/2011, 1/2012, 3/2012, 5/2012, 11/2012, 6/2013, 6/2014, 8/2014
|
AA,AA-,A+ (2)
|
F
|
S&P Maalot
|
A+
|
A+
|
AA
|
8/2014
|
5/2012, 11/2012, 6/2013, 6/2014, 8/2014
|
AA,AA-,A+ (2)
|
G
|
S&P Maalot
|
A+
|
A+
|
AA
|
8/2014
|
5/2012, 11/2012, 6/2013, 6/2014, 8/2014
|
AA,AA-,A+ (2)
|
H
|
S&P Maalot
|
A+
|
A+
|
A+
|
8/2014
|
8/2014
|
A+ (2)
|
I
|
S&P Maalot
|
A+
|
A+
|
A+
|
8/2014
|
8/2014
|
A+ (2)
|
(1)
|
In August 2014, S&P Maalot affirmed the Company's rating of “ilA+/stable”.
|
(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”. 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, S&P Maalot Issued a notice of "ilA+" ranking for new series H and I debentures issued in July 2014. For details regarding the rating of the debentures see the S&P Maalot report dated August 18, 2014.
|
*
|
A securities rating is not a recommendation to buy, sell or hold securities. Ratings may be subject to suspension, revision or withdrawal at any time, and each rating should be evaluated independently of any other rating.
|
|
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
|
752,789
|
292,235
|
-
|
-
|
-
|
236,493
|
Second year
|
752,789
|
292,235
|
-
|
-
|
-
|
178,980
|
Third year
|
824,109
|
348,643
|
-
|
-
|
-
|
117,800
|
Fourth year
|
226,713
|
163,286
|
-
|
-
|
-
|
46,771
|
Fifth year and on
|
521,442
|
285,012
|
-
|
-
|
-
|
64,489
|
Total
|
3,077,841
|
1,381,410
|
-
|
-
|
-
|
644,534
|
|
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
|
752,789
|
292,235
|
-
|
-
|
-
|
236,493
|
Second year
|
752,789
|
292,235
|
-
|
-
|
-
|
178,980
|
Third year
|
824,109
|
348,643
|
-
|
-
|
-
|
117,800
|
Fourth year
|
226,713
|
163,286
|
-
|
-
|
-
|
46,771
|
Fifth year and on
|
521,442
|
285,012
|
-
|
-
|
-
|
64,489
|
Total
|
3,077,841
|
1,381,410
|
-
|
-
|
-
|
644,534
|
|
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
|
-
|
25
|
-
|
-
|
-
|
-
|
Second year
|
-
|
-
|
-
|
-
|
-
|
-
|
Third year
|
-
|
-
|
-
|
-
|
-
|
-
|
Fourth year
|
-
|
-
|
-
|
-
|
-
|
-
|
Fifth year and on
|
-
|
-
|
-
|
-
|
-
|
-
|
Total
|
-
|
25
|
-
|
-
|
-
|
-
|
|
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
|
41,273
|
7,592
|
-
|
-
|
-
|
9,325
|
Second year
|
41,273
|
7,592
|
-
|
-
|
-
|
6,696
|
Third year
|
43,921
|
8,224
|
-
|
-
|
-
|
3,985
|
Fourth year
|
7,943
|
1,580
|
-
|
-
|
-
|
1,035
|
Fifth year and on
|
15,887
|
948
|
-
|
-
|
-
|
764
|
Total
|
150,298
|
25,936
|
-
|
-
|
-
|
21,805
|
|
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, 2014
(Unaudited)
|
Page
|
|
Condensed Consolidated Interim Statements of Financial position
|
2
|
Condensed Consolidated Interim Statements of Income
|
3
|
Condensed Consolidated Interim Statements of Comprehensive Income
|
4
|
Condensed Consolidated Interim Statements of Changes in Equity
|
5
|
Condensed Consolidated Interim Statements of Cash Flows
|
8
|
Notes to the Condensed Consolidated Interim Financial Statements
|
10
|
September 30,
2013
|
September 30,
2014
|
Convenience
translation
into US dollar
(Note 2D)
September 30,
2014
|
December 31,
2013
|
|||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
827 | 989 | 268 | 1,057 | ||||||||||||
Current investments, including derivatives
|
511 | 531 | 144 | 513 | ||||||||||||
Trade receivables
|
1,790 | 1,473 | 398 | 1,731 | ||||||||||||
Other receivables
|
76 | 75 | 20 | 63 | ||||||||||||
Inventory
|
89 | 91 | 25 | 84 | ||||||||||||
Total current assets
|
3,293 | 3,159 | 855 | 3,448 | ||||||||||||
Trade and other receivables
|
904 | 797 | 216 | 854 | ||||||||||||
Property, plant and equipment, net
|
1,907 | 1,793 | 485 | 1,865 | ||||||||||||
Intangible assets, net
|
1,418 | 1,317 | 356 | 1,390 | ||||||||||||
Deferred tax assets
|
25 | 18 | 5 | 22 | ||||||||||||
Total non-current assets
|
4,254 | 3,925 | 1,062 | 4,131 | ||||||||||||
Total assets
|
7,547 | 7,084 | 1,917 | 7,579 | ||||||||||||
Liabilities
|
||||||||||||||||
Current maturities of debentures and long term loans and short term credit
|
1,101 | 1,094 | 296 | 1,100 | ||||||||||||
Trade payables and accrued expenses
|
608 | 714 | 193 | 582 | ||||||||||||
Current tax liabilities
|
69 | 83 | 23 | 99 | ||||||||||||
Provisions
|
181 | 97 | 26 | 187 | ||||||||||||
Other payables, including derivatives
|
361 | 321 | 87 | 398 | ||||||||||||
Total current liabilities
|
2,320 | 2,309 | 625 | 2,366 | ||||||||||||
Long-term loans from banks
|
5 | - | - | 5 | ||||||||||||
Debentures
|
4,337 | 3,553 | 961 | 4,332 | ||||||||||||
Provisions
|
21 | 21 | 6 | 21 | ||||||||||||
Other long-term liabilities
|
12 | 9 | 3 | 10 | ||||||||||||
Liability for employee rights upon retirement, net
|
16 | 12 | 3 | 13 | ||||||||||||
Deferred tax liabilities
|
146 | 145 | 39 | 122 | ||||||||||||
Total non-current liabilities
|
4,537 | 3,740 | 1,012 | 4,503 | ||||||||||||
Total liabilities
|
6,857 | 6,049 | 1,637 | 6,869 | ||||||||||||
Equity attributable to owners of the Company
|
||||||||||||||||
Share capital
|
1 | 1 | - | 1 | ||||||||||||
Cash flow hedge reserve
|
(15 | ) | (6 | ) | (2 | ) | (13 | ) | ||||||||
Retained earnings
|
701 | 1,026 | 278 | 719 | ||||||||||||
Non-controlling interests
|
3 | 14 | 4 | 3 | ||||||||||||
Total equity
|
690 | 1,035 | 280 | 710 | ||||||||||||
Total liabilities and equity
|
7,547 | 7,084 | 1,917 | 7,579 |
For the nine
months ended
September 30,
|
Convenience
translation
into US dollar
(Note 2D)
For the nine
months ended
September 30,
|
For the three
months ended
September 30,
|
Convenience
translation
into US dollar
(Note 2D)
For the three
months ended
September 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2013
|
2014
|
2014
|
2013
|
2014
|
2014
|
2013
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Revenues
|
3,718 | 3,430 | 928 | 1,224 | 1,142 | 309 | 4,927 | |||||||||||||||||||||
Cost of revenues
|
(2,278 | ) | (1,995 | ) | (540 | ) | (745 | ) | (660 | ) | (178 | ) | (2,990 | ) | ||||||||||||||
Gross profit
|
1,440 | 1,435 | 388 | 479 | 482 | 131 | 1,937 | |||||||||||||||||||||
Selling and marketing expenses
|
(522 | ) | (505 | ) | (137 | ) | (166 | ) | (171 | ) | (46 | ) | (717 | ) | ||||||||||||||
General and administrative expenses
|
(438 | ) | (356 | ) | (96 | ) | (138 | ) | (118 | ) | (32 | ) | (570 | ) | ||||||||||||||
Other income (expenses), net
|
1 | (43 | ) | (12 | ) | (2 | ) | (3 | ) | (1 | ) | 1 | ||||||||||||||||
Operating profit
|
481 | 531 | 143 | 173 | 190 | 52 | 651 | |||||||||||||||||||||
Financing income
|
118 | 86 | 23 | 36 | 33 | 9 | 156 | |||||||||||||||||||||
Financing expenses
|
(334 | ) | (228 | ) | (61 | ) | (128 | ) | (84 | ) | (23 | ) | (402 | ) | ||||||||||||||
Financing expenses, net
|
(216 | ) | (142 | ) | (38 | ) | (92 | ) | (51 | ) | (14 | ) | (246 | ) | ||||||||||||||
Profit before taxes on income
|
265 | 389 | 105 | 81 | 139 | 38 | 405 | |||||||||||||||||||||
Taxes on income
|
(79 | ) | (90 | ) | (24 | ) | (29 | ) | (33 | ) | (9 | ) | (117 | ) | ||||||||||||||
Profit for the period
|
186 | 299 | 81 | 52 | 106 | 29 | 288 | |||||||||||||||||||||
Attributable to:
|
||||||||||||||||||||||||||||
Owners of the Company
|
185 | 298 | 81 | 52 | 105 | 29 | 287 | |||||||||||||||||||||
Non-controlling interests
|
1 | 1 | - | - | 1 | - | 1 | |||||||||||||||||||||
Profit for the period
|
186 | 299 | 81 | 52 | 106 | 29 | 288 | |||||||||||||||||||||
Earnings per share
|
||||||||||||||||||||||||||||
Basic earnings per share (in NIS)
|
1.87 | 3.00 | 0.81 | 0.53 | 1.06 | 0.29 | 2.89 | |||||||||||||||||||||
Diluted earnings per share (in NIS)
|
1.85 | 2.97 | 0.80 | 0.52 | 1.05 | 0.28 | 2.86 |
For the nine
months ended
September 30,
|
Convenience
translation
into US dollar
(Note 2D)
For the nine
months ended
September 30,
|
For the three
months ended
September 30,
|
Convenience
translation
into US dollar
(Note 2D)
For the three
months ended
September 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2013
|
2014
|
2014
|
2013
|
2014
|
2014
|
2013
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Profit for the period
|
186 | 299 | 81 | 52 | 106 | 29 | 288 | |||||||||||||||||||||
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
|
10 | 9 | 2 | 5 | - | - | 14 | |||||||||||||||||||||
Changes in fair value of cash flow hedges
|
(13 | ) | - | - | (3 | ) | - | - | (16 | ) | ||||||||||||||||||
Tax on other comprehensive income items that were or will be transferred to profit or loss in subsequent periods
|
- | (2 | ) | - | (1 | ) | - | - | 1 | |||||||||||||||||||
Total other comprehensive income (loss) for the period that after initial recognition in comprehensive income was or will be transferred to profit or loss, net of tax
|
(3 | ) | 7 | 2 | 1 | - | - | (1 | ) | |||||||||||||||||||
Other comprehensive income items
that will not be transferred to profit or loss
|
||||||||||||||||||||||||||||
Actuarial losses on defined benefit plans
|
- | - | - | - | - | - | (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 (loss) for the period, net of tax
|
(3 | ) | 7 | 2 | 1 | - | - | (2 | ) | |||||||||||||||||||
Total comprehensive income for the period
|
183 | 306 | 83 | 53 | 106 | 29 | 286 | |||||||||||||||||||||
Total comprehensive income attributable to:
|
||||||||||||||||||||||||||||
Owners of the Company
|
182 | 305 | 83 | 53 | 105 | 29 | 285 | |||||||||||||||||||||
Non-controlling interests
|
1 | 1 | - | - | 1 | - | 1 | |||||||||||||||||||||
Total comprehensive income for the period
|
183 | 306 | 83 | 53 | 106 | 29 | 286 |
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, 2014 (Unaudited)
|
||||||||||||||||||||||||||||
Balance as of January 1, 2014
(Audited) |
1 | (13 | ) | 719 | 707 | 3 | 710 | 192 | ||||||||||||||||||||
Comprehensive income for the period
|
||||||||||||||||||||||||||||
Profit for the period
|
- | - | 298 | 298 | 1 | 299 | 81 | |||||||||||||||||||||
Other comprehensive income for the period, net of tax
|
||||||||||||||||||||||||||||
Net changes in fair value of cash flow hedges
|
- | 7 | - | 7 | - | 7 | 2 | |||||||||||||||||||||
Transactions with owners, recognized directly in equity
|
||||||||||||||||||||||||||||
Share based payments
|
- | - | 3 | 3 | - | 3 | 1 | |||||||||||||||||||||
Expiration of put option over non-controlling interests in a consolidated company
|
- | - | 6 | 6 | 10 | 16 | 4 | |||||||||||||||||||||
Balance as of September 30, 2014 (Unaudited) | 1 | (6 | ) | 1,026 | 1,021 | 14 | 1,035 | 280 |
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, 2013 (Unaudited)
|
||||||||||||||||||||||||||||
Balance as of January 1, 2013
(Audited) |
1 | (12 | ) | 509 | 498 | 2 | 500 | 135 | ||||||||||||||||||||
Comprehensive income
for the period
|
||||||||||||||||||||||||||||
Profit for the period
|
- | - | 185 | 185 | 1 | 186 | 50 | |||||||||||||||||||||
Other comprehensive loss for
the period, net of tax
|
||||||||||||||||||||||||||||
Net changes in fair value of cash flow hedges
|
- | (3 | ) | - | (3 | ) | - | (3 | ) | (1 | ) | |||||||||||||||||
Transactions with owners, recognized directly in equity
|
||||||||||||||||||||||||||||
Share based payments
|
- | - | 7 | 7 | - | 7 | 2 | |||||||||||||||||||||
Balance as of September 30, 2013 (Unaudited) | 1 | (15 | ) | 701 | 687 | 3 | 690 | 186 |
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, 2014 (Unaudited)
|
||||||||||||||||||||||||||||
Balance as of July 1, 2014
(Unaudited) |
1 | (6 | ) | 920 | 915 | 13 | 928 | 251 | ||||||||||||||||||||
Comprehensive income for the period
|
||||||||||||||||||||||||||||
Profit for the period
|
- | - | 105 | 105 | 1 | 106 | 29 | |||||||||||||||||||||
Transactions with owners, recognized directly in equity
|
||||||||||||||||||||||||||||
Share based payments
|
- | - | 1 | 1 | - | 1 | - | |||||||||||||||||||||
Balance as of September 30, 2014
(Unaudited)
|
1 | (6 | ) | 1,026 | 1,021 | 14 | 1,035 | 280 |
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, 2013 (Unaudited)
|
||||||||||||||||||||||||||||
Balance as of July 1, 2013
(Unaudited) |
1 | (16 | ) | 648 | 633 | 3 | 636 | 172 | ||||||||||||||||||||
Comprehensive income for the period
|
||||||||||||||||||||||||||||
Profit for the period
|
- | - | 52 | 52 | - | 52 | 14 | |||||||||||||||||||||
Other comprehensive income for the period, net of tax
|
||||||||||||||||||||||||||||
Net changes in fair value of cash flow hedges
|
- | 1 | - | 1 | - | 1 | - | |||||||||||||||||||||
Transactions with owners, recognized directly in equity
|
||||||||||||||||||||||||||||
Share based payments
|
- | - | 1 | 1 | - | 1 | - | |||||||||||||||||||||
Balance as of September 30, 2013
(Unaudited)
|
1 | (15 | ) | 701 | 687 | 3 | 690 | 186 |
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, 2013
(Audited)
|
||||||||||||||||||||||||||||
Balance as of January 1, 2013
(Audited)
|
1 | (12 | ) | 509 | 498 | 2 | 500 | 135 | ||||||||||||||||||||
Comprehensive income for the year
|
||||||||||||||||||||||||||||
Profit for the year
|
- | - | 287 | 287 | 1 | 288 | 78 | |||||||||||||||||||||
Other comprehensive loss for the year, net of tax
|
||||||||||||||||||||||||||||
Net changes in fair value of cash flow hedges
|
- | (1 | ) | - | (1 | ) | - | (1 | ) | - | ||||||||||||||||||
Actuarial losses on defined benefit plan
|
- | - | (1 | ) | (1 | ) | - | (1 | ) | - | ||||||||||||||||||
Transactions with owners, recognized directly in equity
|
||||||||||||||||||||||||||||
Share based payments
|
- | - | 9 | 9 | - | 9 | 2 | |||||||||||||||||||||
Dividend paid in cash
|
- | - | (85 | ) | (85 | ) | - | (85 | ) | (23 | ) | |||||||||||||||||
Balance as of December 31, 2013
(Audited)
|
1 | (13 | ) | 719 | 707 | 3 | 710 | 192 |
For the nine
months ended
September 30,
|
Convenience
translation
into US dollar
(Note 2D)
For the nine
months ended
September 30,
|
For the three
months ended
September 30,
|
Convenience
translation
into US dollar
(Note 2D)
For the threemonths ended
September 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2013
|
2014
|
2014
|
2013
|
2014
|
2014
|
2013
|
||||||||||||||||||||||
NIS millions
|
US$ millions
|
NIS millions
|
US$ millions
|
NIS millions
|
||||||||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||||||||||
Cash flows from operating activities
|
||||||||||||||||||||||||||||
Profit for the period
|
186 | 299 | 81 | 52 | 106 | 29 | 288 | |||||||||||||||||||||
Adjustments for:
|
||||||||||||||||||||||||||||
Depreciation and amortization
|
513 | 462 | 125 | 171 | 152 | 41 | 676 | |||||||||||||||||||||
Share based payment
|
7 | 3 | 1 | 1 | 1 | - | 9 | |||||||||||||||||||||
Loss on sale of property, plant and equipment
|
2 | 4 | 1 | 1 | 2 | 1 | 2 | |||||||||||||||||||||
Income tax expense
|
79 | 90 | 24 | 29 | 33 | 9 | 117 | |||||||||||||||||||||
Financing expenses, net
|
216 | 142 | 38 | 92 | 51 | 14 | 246 | |||||||||||||||||||||
Other expenses
|
(3 | ) | - | - | - | - | - | (3 | ) | |||||||||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||||||||||||||
Change in inventory
|
22 | (7 | ) | (2 | ) | 11 | (3 | ) | (1 | ) | 27 | |||||||||||||||||
Change in trade receivables (including long-term amounts)
|
434 | 367 | 99 | 160 | 72 | 19 | 576 | |||||||||||||||||||||
Change in other receivables (including long-term amounts)
|
(29 | ) | (32 | ) | (8 | ) | 19 | 51 | 14 | (34 | ) | |||||||||||||||||
Changes in trade payables, accrued expenses and provisions
|
(141 | ) | (7 | ) | (2 | ) | (38 | ) | (33 | ) | (9 | ) | (185 | ) | ||||||||||||||
Change in other liabilities (including long-term amounts)
|
(15 | ) | 46 | 13 | (8 | ) | (20 | ) | (5 | ) | (33 | ) | ||||||||||||||||
Payments for derivative hedging contracts, net
|
(10 | ) | (6 | ) | (2 | ) | (4 | ) | - | - | (17 | ) | ||||||||||||||||
Income tax paid
|
(87 | ) | (87 | ) | (23 | ) | (26 | ) | (32 | ) | (9 | ) | (119 | ) | ||||||||||||||
Income tax received
|
6 | 6 | 2 | - | 6 | 2 | 6 | |||||||||||||||||||||
Net cash from operating activities
|
1,180 | 1,280 | 347 | 460 | 386 | 105 | 1,556 | |||||||||||||||||||||
Cash flows from investing activities
|
||||||||||||||||||||||||||||
Acquisition of property, plant, and equipment
|
(228 | ) | (197 | ) | (54 | ) | (57 | ) | (70 | ) | (19 | ) | (275 | ) | ||||||||||||||
Acquisition of intangible assets
|
(64 | ) | (60 | ) | (16 | ) | (16 | ) | (16 | ) | (4 | ) | (90 | ) | ||||||||||||||
Change in current investments, net
|
(16 | ) | (18 | ) | (5 | ) | (6 | ) | (4 | ) | (1 | ) | (16 | ) | ||||||||||||||
Proceeds from (payments for) other derivative contracts, net
|
(7 | ) | (1 | ) | - | (2 | ) | 1 | - | (10 | ) | |||||||||||||||||
Proceeds from sale of property, plant and equipment
|
12 | 4 | 1 | 2 | 1 | - | 17 | |||||||||||||||||||||
Interest received
|
24 | 21 | 6 | 5 | 4 | 1 | 29 | |||||||||||||||||||||
Dividend received
|
1 | - | - | - | - | - | 1 | |||||||||||||||||||||
Net cash used in investing activities
|
(278 | ) | (251 | ) | (68 | ) | (74 | ) | (84 | ) | (23 | ) | (344 | ) |
For the nine
months ended
September 30,
|
Convenience
translation
into US dollar
(Note 2D)
For the nine
months ended
September 30,
|
For the three
months ended
September 30,
|
Convenience
translation
into US dollar
(Note 2D)
For the three
months ended
September 30,
|
For the
year ended
December 31,
|
||||||||||||||||||||||||
2013
|
2014
|
2014
|
2013
|
2014
|
2014
|
2013
|
||||||||||||||||||||||
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
|
(5 | ) | (21 | ) | (6 | ) | (1 | ) | (7 | ) | (2 | ) | (8 | ) | ||||||||||||||
Repayment of long term loans from banks
|
(6 | ) | (12 | ) | (3 | ) | (6 | ) | (1 | ) | - | (6 | ) | |||||||||||||||
Repayment of debentures
|
(1,124 | ) | (1,092 | ) | (295 | ) | (563 | ) | (569 | ) | (154 | ) | (1,124 | ) | ||||||||||||||
Proceeds from issuance of debentures, net of issuance costs
|
- | 326 | 88 | - | 326 | 88 | - | |||||||||||||||||||||
Dividend paid
|
- | (4 | ) | (1 | ) | - | - | - | (81 | ) | ||||||||||||||||||
Interest paid
|
(354 | ) | (294 | ) | (80 | ) | (174 | ) | (145 | ) | (39 | ) | (350 | ) | ||||||||||||||
Net cash used in financing activities
|
(1,489 | ) | (1,097 | ) | (297 | ) | (744 | ) | (396 | ) | (107 | ) | (1,569 | ) | ||||||||||||||
Changes in cash and cash equivalents
|
(587 | ) | (68 | ) | (18 | ) | (358 | ) | (94 | ) | (25 | ) | (357 | ) | ||||||||||||||
Cash and cash equivalents as at the beginning of the period
|
1,414 | 1,057 | 286 | 1,185 | 1,083 | 293 | 1,414 | |||||||||||||||||||||
Cash and cash equivalents as at the end of the period
|
827 | 989 | 268 | 827 | 989 | 268 | 1,057 |
A.
|
Statement of compliance
|
B.
|
Functional and presentation currency
|
C.
|
Basis of measurement
|
D.
|
Convenience translation into U.S. dollars (“dollars” or “$”)
|
E.
|
Use of estimates and judgments
|
F.
|
Exchange rates and known Consumer Price Indexes are as follows:
|
Exchange rates
of US$
|
Consumer Price
Index (points)*
|
|||||||
As of September 30, 2014
|
3.695 | 223.80 | ||||||
As of September 30, 2013
|
3.537 | 223.80 | ||||||
As of December 31, 2013
|
3.471 | 223.58 | ||||||
Increase (decrease) during the period:
|
||||||||
Nine months ended September 30, 2014
|
6.45% | 0.10% | ||||||
Nine months ended September 30, 2013
|
(5.25%) | 2.01% | ||||||
Three months ended September 30, 2014
|
7.48% | 0.29% | ||||||
Three months ended September 30, 2013
|
(2.24%) | 1.29% | ||||||
Year ended December 31, 2013
|
(7.02%) | 1.91% |
A.
|
Application of a new amendment for the first time
|
B.
|
New standards not yet adopted
|
1.
|
IFRS 15, Revenue from Contracts with Customers
|
2.
|
IFRS 9 (2014), Financial Instruments
|
2.
|
IFRS 9 (2014), Financial Instruments (cont'd)
|
|
—
|
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.
|
Nine-month period ended September 30, 2014
|
||||||||||||||||
NIS millions
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Cellcom
|
Netvision
|
Reconciliation for consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
2,758 | 672 | - | 3,430 | ||||||||||||
Inter-segment revenues
|
37 | 41 | (78 | ) | - | |||||||||||
EBITDA*
|
757 | 243 | - | 1,000 | ||||||||||||
Reconciliation of reportable segment EBITDA to profit for the period
|
||||||||||||||||
Depreciation and amortization
|
(358 | ) | (66 | ) | (38 | ) | (462 | ) | ||||||||
Taxes on income
|
(68 | ) | (34 | ) | 12 | (90 | ) | |||||||||
Financing income
|
86 | |||||||||||||||
Financing expenses
|
(228 | ) | ||||||||||||||
Other expenses
|
(4 | ) | ||||||||||||||
Share based payments
|
(3 | ) | ||||||||||||||
Profit for the period
|
188 | 146 | (35 | ) | 299 |
Nine-month period ended September 30, 2013
|
||||||||||||||||
NIS millions
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Cellcom
|
Netvision
|
Reconciliation for consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
2,973 | 745 | - | 3,718 | ||||||||||||
Inter-segment revenues
|
38 | 42 | (80 | ) | - | |||||||||||
EBITDA*
|
808 | 192 | - | 1,000 | ||||||||||||
Reconciliation of reportable segment EBITDA to profit for the period
|
||||||||||||||||
Depreciation and amortization
|
(378 | ) | (78 | ) | (57 | ) | (513 | ) | ||||||||
Taxes on income
|
(66 | ) | (28 | ) | 15 | (79 | ) | |||||||||
Financing income
|
118 | |||||||||||||||
Financing expenses
|
(334 | ) | ||||||||||||||
Other income
|
1 | |||||||||||||||
Share based payments
|
(7 | ) | ||||||||||||||
Profit for the period
|
142 | 86 | (42 | ) | 186 |
Three-month period ended September 30, 2014
|
||||||||||||||||
NIS millions
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Cellcom
|
Netvision
|
Reconciliation for consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
917 | 225 | - | 1,142 | ||||||||||||
Inter-segment revenues
|
13 | 16 | (29 | ) | - | |||||||||||
EBITDA*
|
268 | 78 | - | 346 | ||||||||||||
Reconciliation of reportable segment EBITDA to profit for the period
|
||||||||||||||||
Depreciation and amortization
|
(118 | ) | (22 | ) | (12 | ) | (152 | ) | ||||||||
Taxes on income
|
(27 | ) | (11 | ) | 5 | (33 | ) | |||||||||
Financing income
|
33 | |||||||||||||||
Financing expenses
|
(84 | ) | ||||||||||||||
Other expenses
|
(3 | ) | ||||||||||||||
Share based payments
|
(1 | ) | ||||||||||||||
Profit for the period
|
69 | 46 | (9 | ) | 106 |
Three-month period ended September 30, 2013
|
||||||||||||||||
NIS millions
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Cellcom
|
Netvision
|
Reconciliation for consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
982 | 242 | - | 1,224 | ||||||||||||
Inter-segment revenues
|
12 | 15 | (27 | ) | - | |||||||||||
EBITDA*
|
286 | 61 | - | 347 | ||||||||||||
Reconciliation of reportable segment EBITDA to profit for the period
|
||||||||||||||||
Depreciation and amortization
|
(126 | ) | (26 | ) | (19 | ) | (171 | ) | ||||||||
Taxes on income
|
(28 | ) | (6 | ) | 5 | (29 | ) | |||||||||
Financing income
|
36 | |||||||||||||||
Financing expenses
|
(128 | ) | ||||||||||||||
Other expenses
|
(2 | ) | ||||||||||||||
Share based payments
|
(1 | ) | ||||||||||||||
Profit for the period
|
40 | 26 | (14 | ) | 52 |
Year ended December 31, 2013
|
||||||||||||||||
NIS millions
|
||||||||||||||||
(Audited)
|
||||||||||||||||
Cellcom
|
Netvision
|
Reconciliation for consolidation
|
Consolidated
|
|||||||||||||
External revenues
|
3,944 | 983 | - | 4,927 | ||||||||||||
Inter-segment revenues
|
50 | 56 | (106 | ) | - | |||||||||||
EBITDA*
|
1,066 | 269 | - | 1,335 | ||||||||||||
Reconciliation of reportable segment EBITDA to profit for the year
|
||||||||||||||||
Depreciation and amortization
|
(504 | ) | (96 | ) | (76 | ) | (676 | ) | ||||||||
Taxes on income
|
(91 | ) | (45 | ) | 19 | (117 | ) | |||||||||
Financing income
|
156 | |||||||||||||||
Financing expenses
|
(402 | ) | ||||||||||||||
Other income
|
1 | |||||||||||||||
Share based payments
|
(9 | ) | ||||||||||||||
Profit for the year
|
210 | 135 | (57 | ) | 288 |
a.
|
Series H debentures to the public in Israel in the aggregate principal amount of NIS 106 million in exchange for net consideration of NIS 105 million. The debentures are payable in seven annual installments: three equal payments of 12% of the principal on July 5 of each of the years 2018 through and including 2020, and four equal annual installments of 16% of the principal on July 5 of each of the years 2021 through and including 2024. The debentures bear annual interest of 1.98%. The interest is to be paid in 20 semi-annual installments on January 5 and on July 5, of each calendar year commencing January 5, 2015 through and including July 5, 2024. The debentures (principal amount and interest) are linked to the CPI which was published on June 15, 2014, for May 2014.
|
b.
|
Series I debentures to the public in Israel in the aggregate principal amount of NIS 223 million in exchange for net consideration of NIS 221 million. The debentures are payable in eight annual installments: three equal payments of 10% of the principal on July 5 of each of the years 2018 through and including 2020, and five equal annual installments of 14% of the principal on July 5 of each of the years 2021 through and including 2025. The debentures bear annual interest of 4.14%. The interest is to be paid in 22 semi-annual installments on January 5 and on July 5 of each calendar year commencing January 5, 2015 through and including July 5, 2025. The debentures (principal amount and interest) are without any linkage.
|
(1)
|
Financial instruments measured at fair value for disclosure purposes only
|
September 30,
|
December 31,
|
|||||||||||||||||||||||
2013
|
2014
|
2013
|
||||||||||||||||||||||
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
|
(5,563 | ) | (6,031 | ) | (4,752 | ) | (5,135 | ) | (5,631 | ) | (6,098 | ) |
(2)
|
Fair value hierarchy of financial instruments measured at fair value
|
September 30, 2014
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
NIS millions
|
||||||||||||||||
Financial assets at fair value through profit or loss
|
||||||||||||||||
Current investments in debt securities
|
527 | - | - | 527 | ||||||||||||
Derivatives
|
- | 4 | - | 4 | ||||||||||||
Long-term receivables
|
- | 49 | - | 49 | ||||||||||||
Total assets
|
527 | 53 | - | 580 | ||||||||||||
Financial liabilities at fair value
|
||||||||||||||||
Derivatives at fair value through profit or loss
|
- | (26 | ) | - | (26 | ) | ||||||||||
Total liabilities
|
- | (26 | ) | - | (26 | ) |
(2)
|
Fair value hierarchy of financial instruments measured at fair value (cont'd)
|
September 30, 2013
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
NIS millions
|
||||||||||||||||
Financial assets at fair value through profit or loss
|
||||||||||||||||
Current investments in debt securities
|
507 | - | - | 507 | ||||||||||||
Derivatives
|
- | 4 | - | 4 | ||||||||||||
Long-term receivables
|
- | 46 | - | 46 | ||||||||||||
Total assets
|
507 | 50 | - | 557 | ||||||||||||
Financial liabilities at fair value
|
||||||||||||||||
Derivatives at fair value through profit or loss
|
- | (24 | ) | - | (24 | ) | ||||||||||
Forward foreign currency contracts used for hedging
|
- | (11 | ) | - | (11 | ) | ||||||||||
Total liabilities
|
- | (35 | ) | - | (35 | ) |
December 31, 2013
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
NIS millions
|
||||||||||||||||
Financial assets at fair value through profit or loss
|
||||||||||||||||
Current investments in debt securities
|
509 | - | - | 509 | ||||||||||||
Derivatives
|
- | 4 | - | 4 | ||||||||||||
Long-term receivables
|
- | 47 | - | 47 | ||||||||||||
Total assets
|
509 | 51 | - | 560 | ||||||||||||
Financial liabilities at fair value
|
||||||||||||||||
Derivatives at fair value through profit or loss
|
- | (24 | ) | - | (24 | ) | ||||||||||
Forward foreign currency contracts used for hedging
|
- | (6 | ) | - | (6 | ) | ||||||||||
Total liabilities
|
- | (30 | ) | - | (30 | ) |
(3)
|
Valuation methods to determine fair value
|
|
US$/NIS forward contracts - fair value is measured on the basis of the capitalization of the difference between the forward price in the contract and the current forward price for the residual period until redemption, using appropriate interest curves used for derivative pricing.
|
|
CPI/NIS forward contracts - fair value is measured on the basis of the capitalization of the difference between the transaction price and the future expected CPI, using appropriate NIS yield curve based on government and short-term bonds.
|
(1)
|
As reported in Note 29(4) to the annual financial statements, subsequent to the network sharing policy published by the Israeli Ministry of Communications or the MOC, in May 2014, the Company entered a new 4G network sharing agreement with Golan Telecom Ltd. or Golan, after concluding that the previous 4G network sharing agreement with Pelephone Communications Ltd., or Pelephone, and Golan does not meet the policy principles and therefore will not be approved by the MOC. In July 2014, the MOC published a tender for 1800MHz frequencies, for 4G technologies (such as LTE, LTE Advanced). The tender documents include a draft license amendment which sets certain specific requirements for the approval of such network, among others, in regards to the economic stake of the operators in the shared network.
|
a.
|
An updated agreement with Golan
|
b.
|
Passive infrastructure cooperation agreement with Pelephone
|
(2)
|
In April 2014, the Company entered an agreement with Nokia Solutions and Networks Israel Ltd., of Nokia Solutions and Networks group, a worldwide leading network manufacturer, for the supply of its 4G network, which also supports LTE Advanced technology. The operation of the network as well as its LTE Advanced qualities is subject to the regulator's approvals and availability of spectrum. The agreement is a framework agreement and the total commitment amount depends on the amount of sites which will be supplied. As of the financial statements signing date, the aggregate commitments under the agreement amounts to approximately NIS 32 million.
|
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 approximately NIS 48 million.
|
CELLCOM ISRAEL LTD.
|
|||||
Date:
|
November 12, 2014
|
By:
|
/s/ Liat Menahemi Stadler
|
||
Name:
|
Liat Menahemi Stadler
|
||||
Title:
|
General Counsel
|