Cellcom Israel Announces First Quarter 2019 Results
NETANYA, Israel, May 28, 2019 /PRNewswire/ --
First Quarter 2019 Highlights (compared to first quarter of 2018):
-- Total Revenues totaled NIS 928 million ($256 million) compared to NIS
933 million ($257 million) in the first quarter last year, a decrease of
0.5%
-- Service revenues totaled NIS 678 million ($187 million) compared to NIS
701 million ($193 million) in the first quarter last year, a decrease of
3.3%
-- Operating income totaled NIS 9 million ($2 million) compared to NIS
52(2) million ($14 million) in the first quarter last year, a decrease
of 82.7%
-- Loss totaled NIS 16 million ($4 million) compared to net income of NIS 7
million ($2 million) in the first quarter last year(3)
-- Adjusted EBITDA(1) totaled NIS 224(3) million ($62 million) compared to
NIS 187(2) million ($51 million) in the first quarter last year, an
increase of 19.8%(3)
-- Net cash flow from operating activities totaled NIS 303 million ($84
million) compared to NIS 230 million ($63 million) in the first quarter
last year, an increase of 31.7%(3 )
-- Free cash flow(1) totaled NIS 46 million ($13 million) compared to NIS
84 million ($23 million) in the first quarter last year, a decrease of
45.2%
Nir Sztern, the Company's Chief Executive Officer, referred to the results of the first quarter of 2019:
"Alongside with the success of our strategy to expand our activities in the fixed-line segment, the intensity of the competition in the cellular segment continues to have a negative impact on the results of this segment.
We ended the current quarter with a loss of NIS 16 million, compared to a loss of NIS 35 million in the previous quarter. Adjusted EBITDA for the quarter increased by approximately 20% compared to the same quarter last year, from NIS 187(2) million to NIS 224(3) million.
In this quarter, we recorded an increase in end-user equipment revenues, with an increase of 8% compared to the corresponding quarter last year, to NIS 250 million, which is mainly due to an increase in sales of end-user equipment in the fixed-line segment.
We continue the rapid deployment of Cellcom's independent fiber optic infrastructure in residential areas and expect the completion of the transaction for the sale of that fiber infrastructure to IBC, in the coming months (subject to the parties entering into a definitive agreement), together with the investment in IBC (subject to its approval), will contribute significantly to the results of the Company's operations and make a positive improvement to its free cash flow.
The rapid deployment rate will enable more than 750 thousand households to be within fiber network coverage by the end of 2022, with connection to a high-speed, quality Internet infrastructure.
Recently, we announced the signing of an agreement with Netflix, the world's leading entertainment service, to distribute their service through direct access by Cellcom tv, including through an advanced based Android TV 4K set-top box.
Netflix's rich catalog joins Cellcom's vast content offering, which today already includes hundreds of series and films of the leading studios and the full HBO catalog.
During the first quarter, the Company's subscriber base in the television field grew by approximately 8,000 households, most of them customers of excellent service packages, Triple and Quattro.
Recently we announced the signing of a collective agreement with the employees union and the Histadrut, for the years 2019-2020. The agreement we signed is based on an innovative and unique model that takes care of employees' welfare and directly links the success of the Company to the compensation of its employees. This agreement is expected to reduce the Company's expenses compared to the expenses under the previous agreement, and to have a positive cumulative effect of approximately NIS 54 million on the Company's Adjusted EBITDA for the years 2019-2020 compared with the previous collective agreement."
Shlomi Fruhling, the Company's Chief Financial Officer, said:
"The Company's revenues from services in the first quarter of 2019 amounted to NIS 678 million, similar to that of the previous quarter. In the fixed-line segment, the Company recorded continued growth, which was offset by a reduction in revenues from cellular services as a result of seasonality and the increased competition in the market.
In the first quarter of 2019, the Company began reporting in accordance with IFRS 16. The main effect of the implementation of the standard, is the transition from recognition of lease payments as an operating expense to recognition of these expenses as assets, and the recording of depreciation expenses in respect thereof. The effect of the standard on the adjusted EBITDA in the first quarter is an addition of NIS 63 million.
We continue with our efforts to reduce the Company expenses. In May, a collective agreement was signed between the Company and the employees' union and the Histadrut which relates to the years 2019 and 2020, in which the cumulative contribution to Adjusted EBITDA to the Company, compared with the collective agreement of 2018 is NIS 54 million. As part of the agreement, eligible employees will be granted options and restricted share units at a total value of NIS 14 million, which they will be able to exercise on fixed dates over a 4 year period, and restricted share units to the employees' non-profit organization at a value of NIS 5 million.
Adjusted EBITDA in the quarter amounted to NIS 224 million and included an addition of NIS 63 million in respect of the initial implementation of IFRS 16, as compared with Adjusted EBITDA in the previous quarter of NIS 170(2) million.
Free cash flow for the first quarter of 2019 amounted to NIS 46 million, compared to NIS 7 million in the previous quarter. The improvement in free cash flow was mainly due to a decrease in payments for equipment.
The Company's Board of Directors decided not to distribute dividends in respect of the results of the first quarter of 2019, in view of the continued intensified competition in the market and its negative impact on the Company's operating results and in order to continue to strengthen the Company's balance sheet. The Board of Directors will review its decision in accordance with the development of market conditions, while taking into account the Company's needs."
Cellcom Israel Ltd. (NYSE: CEL) (TASE: CEL) ("Cellcom Israel" or the "Company" or the "Group") announced today its financial results for the first quarter of 2019.
The Company reported that revenues for the first quarter of 2019 totaled NIS 928 million ($256 million); Adjusted EBITDA for the first quarter of 2019 totaled NIS 224 million ($62 million), or 24.1% of total revenues; loss for the first quarter of 2019 totaled NIS 16 million ($4 million). Basic loss per share for the first quarter of 2019 totaled NIS 0.14 ($0.04).
Main Consolidated Financial Results:
---
Q1/2019 Q1/2018 Change%
Q1/2019
Q1/2018
---
NIS million US$ million
(convenience translation)
---
Total revenues 928 933 (0.5)% 256 257
---
Operating Income 9 52 (82.7)% 2 14
---
Net Income (Loss) (16)(3) 7 N/A (4) 2
---
Free cash flow 46 84 (45.2)% 13 23
---
Adjusted EBITDA 224(3) 187(2) 19.8% 62 51
---
Adjusted EBITDA, as percent of 24.1% 20.0% 20.5%
total revenues
===
Main Financial Data by Operating Segments:
Cellular (*) Fixed-line (**) Consolidation
adjustments Consolidated results
(***)
NIS million Q1'19 Q1'18 Change Q1'19 Q1'18 Change Q1'19 Q1'18 Q1'19 Q1'18 Change
% % %
Total revenues 562 630 (10.8)% 409 343 19.2% (43) (40) 928 933 (0.5)%
---
Service revenues 404 437 (7.6)% 317 304 4.3% (43) (40) 678 701 (3.3)%
---
Equipment revenues 158 193 (18.1)% 92 39 135.9% 250 232 7.8%
---
Adjusted EBITDA 146 119(2) 22.7% 78 68 14.7% 224 187(2) 19.8%
---
Adjusted EBITDA, as percent of 26.0% 18.9% 37.6% 19.1% 19.8% (3.5)% 24.1% 20% 20.5%
total revenues
===
(*) The segment includes the cellular communications services, end user cellular equipment and supplemental services.
(**) The segment includes landline telephony services, internet infrastructure and connectivity services, television services, transmission services, end user fixed-line equipment and supplemental services.
(***) Include cancellation of inter-segment revenues between "Cellular" and "Fixed-line" segments.
Financial Review (first quarter of 2019 compared to first quarter of 2018):
Revenues for the first quarter of 2019 decreased 0.5% totaling NIS 928 million ($256 million), compared to NIS 933 million ($257 million) in the first quarter last year. The decrease in revenues is attributed to a 3.3% decrease in service revenues, which was partially offset by a 7.8% increase in equipment revenues.
Service revenues in the first quarter of 2019 totaled NIS 678 million ($187 million), a 3.3% decrease compared to NIS 701 million ($193 million) in the first quarter last year.
Service revenues in the cellular segment totaled NIS 404 million ($111 million) in the first quarter of 2019, a 7.6% decrease compared to NIS 437 million ($120 million) in the first quarter last year. This decrease resulted mainly from the ongoing erosion in the price of these services as a result of the competition in the cellular market.
Service revenues in the fixed-line segment totaled NIS 317 million ($87 million) in the first quarter of 2019, a 4.3% increase compared to NIS 304 million ($84 million) in the first quarter last year. This increase resulted mainly from an increase in revenues from internet and TV services.
Equipment revenues totaled NIS 250 million ($69 million) in the first quarter of 2019, a 7.8% increase compared to NIS 232 million ($64 million) in the first quarter last year. The increase resulted mainly from an increase in the amount of end user equipment sold in the fixed-line segment which was partially offset by a decrease in the amount of end user equipment sold in the cellular segment.
Cost of revenues totaled NIS 695 million ($191 million) in the first quarter of 2019, a 4.5% increase compared to NIS 665 million ($183 million) in the first quarter last year. The increase in cost of revenues resulted mainly from an increase in cost of equipment caused mainly by an increase in the quantity of end user equipment sold in the fixed-line segment. This increase was partially offset by a decrease in costs of end user equipment sold in cellular segment and from an increase in costs of TV services content and in costs related to internet services in the fixed-line segment.
Gross profit for the first quarter of 2019 totaled NIS 233 million ($65 million), a 13.1% decrease compared to NIS 268 million ($74 million) in the first quarter of 2018. Gross profit margin for the first quarter of 2019 amounted to 25.1%, down from 28.7% in the first quarter of 2018.
Selling, Marketing, General and Administrative Expenses ("SG&A Expenses") for the first quarter of 2019 increased 2.7% to NIS 229 million ($64 million), compared to NIS 223 million ($61 million) in the first quarter of 2018. This increase is primarily a result of an increase in amortization expenses of salaries and commissions expenses, which were capitalized as part of the customer acquisition costs, according to International Financial Reporting Standard 15 (IFRS 15). This increase was partially offset by a decrease in doubtful accounts expenses and welfare expenses.
Operating income for the first quarter of 2019 decreased 82.7% to NIS 9 million ($2 million) from NIS 52 million ($14 million) in the first quarter of 2018.
Adjusted EBITDA for the first quarter of 2019 increased 19.8% to NIS 224 million ($62 million), compared to NIS 187(2) million ($51 million) in the first quarter of 2018. Adjusted EBITDA as a percent of revenues for the first quarter of 2019 totaled 24.1%, up from 20.0% in the first quarter of 2018. The increase in Adjusted EBITDA is attributed to a 22.7% increase in the cellular segment Adjusted EBITDA, and a 14.7% increase in the fixed-line segment Adjusted EBITDA. The increase in Adjusted EBITDA resulted mainly from decrease in rent expenses in a total amount of NIS 63 million which were recognized as a right-of-use asset as a result of the initial implementation of IFRS 16 as of 1 January, 2019.
Cellular segment Adjusted EBITDA for the first quarter of 2019 totaled NIS 146 million ($40 million), compared to NIS 119(2) million ($33 million) in the first quarter last year, an increase of 22.7%, which resulted mainly from a decrease in rent expenses in a total amount of NIS 56 million which were recognized as a right-of-use asset as a result of the initial implementation of IFRS 16 as of 1 January, 2019. This increase was partially offset by a decrease in revenues from services, which resulted mainly from ongoing erosion in the price of these services as a result of the competition in the cellular market.
Fixed-line segment Adjusted EBITDA for the first quarter of 2019 totaled NIS 78 million ($21 million), compared to NIS 68 million ($19 million) in the first quarter last year, a 14.7% increase, which resulted mainly from a decrease in rent expenses in a total amount of NIS 7 million which were recognized as a right-of-use asset as a result of the initial implementation of IFRS 16 as of 1 January, 2019 and an increase in the amount of end user equipment sold in the fixed-line segment.
Financing expenses, net for the first quarter of 2019 decreased by 32.5% and totaled NIS 27 million ($7 million), compared to NIS 40(2) million ($11 million) in the first quarter of 2018. The decrease resulted mainly from profits in the Company's tradable investment portfolio due to a rise in the securities market in the first quarter of 2019. This decrease was partially offset by an increase in financing expenses as a result of the initial implementation of IFRS 16 as of 1 January, 2019.
Loss for the first quarter of 2019 totaled NIS 16(3) million ($4 million), compared to net income of NIS 7 million ($2 million) in the first quarter of 2018.
Basic loss per share for the first quarter of 2019 totaled NIS 0.14 ($0.04), compared to basic earnings per share of NIS 0.08 ($0.02) in the first quarter last year.
Operating Review
Main Performance Indicators - Cellular segment:
Q1/2019 Q1/2018 Change (%)
---
Cellular
subscribers
at
the
end 2,853 2,822 1.1%
of period
(in
thousands)
---
Churn
Rate
for
cellular 11.0% 9.5% 15.8%
subscribers
(in %)
---
Monthly
cellular
ARPU
(in
NIS) 47.2 51.8 (8.9)%
---
Cellular subscriber base - at the end of the first quarter of 2019 the Company had approximately 2.853 million cellular subscribers. During the first quarter of 2019 the Company's cellular subscriber base increased by approximately 2 thousand net cellular subscribers.
Cellular Churn Rate for the first quarter of 2019 totaled to 11.0%, compared to 9.5% in the first quarter last year.
The monthly cellular Average Revenue per User ("ARPU") for the first quarter of 2019 totaled NIS 47.2 ($13.0), compared to NIS 51.8 ($14.3) in the first quarter last year. The decrease in ARPU resulted mainly from the ongoing erosion in the prices of cellular services.
Main Performance Indicators - Fixed-line segment:
Q1/2019 Q1/2018 Change (%)
---
Internet infrastructure
field - 278 235 18.3%
subscribers (households) at the
end of period (in thousands)
---
TV field - subscribers 227 184 23.4%
(households) at the end of
period (in thousands)
===
In the first quarter of 2019, the Company's subscriber base in the internet infrastructure field increased by approximately 9 thousand net households, and the Company's subscriber base in the TV field increased by approximately 8 thousand net households.
Financing and Investment Review
Cash Flow
Free cash flow for the first quarter of 2019, totaled NIS 46 million ($13 million), compared to NIS 84 million ($23 million) in the first quarter of 2018, a 45.2% decrease. The decrease in free cash flow, resulted mainly from a decrease in receipts from customers due to a decrease in company's revenues from services and end user equipment, and higher cash capital expenditures in fixed assets mainly from fiber-optic network deployment. This decrease was partially offset by decrease in payments to end user equipment suppliers.
Total Equity
Total Equity as of March 31, 2019 amounted to NIS 1,661 million ($457 million) primarily consisting of undistributed accumulated retained earnings of the Company.
Cash Capital Expenditures in Fixed Assets and Intangible Assets and others
During the first quarter of 2019, the Company invested NIS 184 million ($51 million) in fixed assets and intangible assets and others (including, among others, investments in the Company's communications networks, fiber-optic network, information systems, software and TV set-top boxes and capitalization of part of the customer acquisition costs as a result of IFRS 15), compared to NIS 146 million ($40 million) in the first quarter 2018.
Dividend
On May 27, 2019, the Company's Board of Directors decided not to declare a cash dividend for the first quarter of 2019. In making its decision, the board of directors considered the Company's dividend policy and business status and decided not to distribute a cash dividend at this time, given the intensified competition and its adverse effect on the Company's results of operations, and in order to strengthen the Company's balance sheet. The board of directors will re-evaluate its decision in future quarters. No future dividend declaration is guaranteed and is subject to the Company's board of directors' sole discretion, as detailed in the Company's annual report for the year ended December 31, 2018 on Form 20-F dated March 18, 2019, or the 2018 Annual Report, under "Item 8 - Financial Information - A. Consolidated Statements and Other Financial Information - Dividend Policy".
Debentures, Material Loans and Financial Liabilities
For information regarding the Company's outstanding debentures as of March 31, 2019, see "Disclosure for Debenture Holders" section in this press release.
In accordance with the company's deferred loan agreement with an Israeli bank from June 2017, in March 2019, the loan in an amount of NIS 150 million was provided to the Company.
For information regarding the Company's material loans as of March 31, 2019, see "Aggregation of the Information regarding the Company's Material Loans" section in this press release.
For a summary of the Company's financial liabilities as of March 31, 2019, see "Disclosure for Debenture Holders" section in this press release.
Other developments during the first quarter of 2019 and subsequent to the end of the reporting period
Collective Employment Agreement
In May 2019, following the previously announced labor dispute in the Company relating to the Company's intention to take streamlining measures and negotiations of a new collective employment agreement, the Company, the employees' representatives and the Histadrut, the union representing the Company's employees, entered a collective employment agreement, or the New Agreement, amending its collective employment agreement (for the years 2018-2020) entered in 2018, or the 2018 Agreement, under which: salary increase for 2019 will be annulled; the salary increase for 2020 will be postponed for at least 15 months and until a certain condition is met; the employees' welfare budget will be reduced; and the Company will grant entitled employees options and RSUs and RSUs to a non-profit organization for the employees, subject to all approvals and procedures required by law. The New Agreement further includes certain arrangements relating to the Company and employees' representatives relations and also includes the termination of the previously announced labor dispute. The New Agreement is expected to decrease the Company's costs related to the New Agreement, in comparison with the Company's costs related to the 2018 Agreement and is expected to have an accumulated positive effect (which effect does not take into account the non-cash expense the Company will incur for the equity grants) of approximately NIS 54 million on the Company's Adjusted EBITDA for the duration of the Agreement (2019-2020), in comparison with the effect that the 2018 Agreement was expected to have on the Company's Adjusted EBITDA for 2019 - 2020. Said forward-looking statements, relating to the potential benefits from the new collective employment agreement on the company's Adjusted EBITDA, are subject to uncertainties and assumptions about future employment developments and the Israeli telecommunication regulation and market condition.
For additional details see the Company's 2018 Annual Report under "Item 3. Key Information - D. Risk Factors - Risks Related to our Business - The unionizing of our employees may impede necessary organizational and personnel changes, result in increased costs or disruption to our operation" and Item 6. Directors, senior management and employees - D. Employees".
Share Incentive Plan
In May 2019, the Company's board of directors resolved to grant employees of the Company (who are not office holders or directors) and a non-profit organization for the employees a total amount of 2,923,476 options at an exercise price of NIS 15.66 and 1,014,517 RSUs. The grant will be carried out after the fulfilment of all approvals and procedures required by law. The options and RSUs granted to the employees will be vested in four equal installments on each of the first, second, third and fourth anniversary of the date of grant and the RSUs granted to the non-profit organization will be vested in two equal installments on each of the first and second anniversary of the date of grant. The options of the first installment may be exercised within 18 months from their vesting, and the options of the second, third and fourth installments may be exercised with 12 months from their vesting. For additional details see the Company's 2018 Annual Report under "- Item E. Share Ownership - Share Incentive Plan".
Early Repayment of Bank Loan
In April 2019, the Company made an early repayment of a loan under the Company's August 2015 loan agreement with an Israeli bank, provided to the Company in December 2016, in an outstanding principal amount of NIS 112 million (in addition to outstanding accumulated interest until date of repayment). The bank's loan from 2015 was one of the Company's more expensive and shorter duration debt and its early repayment will reduce the Company's leverage and save an accumulated amount of approximately NIS 9 million of interest expenses. For additional details regarding the Company's existing debentures and existing loan agreements, including the terms of the repaid bank's August 2015 loan and the bank's outstanding loan provided in March 2019 (according to the June 2017 loan agreement), see the Company's 2018 Annual Report under "Item 5B. Liquidity and Capital Resources - Debt Service - Public Debentures" and "-Other Credit Facilities".
Collaboration Agreement with Netflix
In May 2019, the Company announced a collaboration agreement with Netflix International B.V., the world's leading internet entertainment provider, for the distribution of Netflix's services in Israel, including through direct access to the Netflix services from the Cellcom tv platform.
Change in Independent Auditors
In March 2019, Somekh Chaikin did not stand for re-election as the Company's joint independent registered public accounting firm and Keselman & Keselman, a member of PricewaterhouseCoopers International Limited independent, was appointed by the Company's general meeting of shareholders, or the Meeting, as the independent auditor of the Company until the Company's next annual general meeting. For more information see the Company's proxy statement relating to the Meeting, filed on form 6-K dated February 14, 2019 and the Company's current report on Form 6-K dated April 1, 2019.
Changes in Directors and Management
In March 2019, Mr. Joseph Barnea and Ms. Ronit Baytel (external directors) and Mr. Shlomo Waxe (independent director) did not stand for reelection as directors and the Meeting appointed Mr. Gustavo Traiber (independent director), Ms. Varda Liberman and Mr. Shmuel Hauzer (external directors) as members of the board of directors of the Company. For more information see the Company's proxy statement relating to the Meeting, filed on form 6-K dated February 14, 2019 and the Company's current report on Form 6-K dated April 1, 2019. In May 2019, following Mr. Yaniv Gruenwald's resignation form his position as the Company's vice president of television and content in March 2019, the Company's board of directors has nominated Mr. Rafi Shauli as the Company's vice president of television and content, effective June 1, 2019.
Rafi Shauli has served as head of the Company's private customers marketing department in the marketing division from 2012. From 2008 to 2011, he served as director of products and business development in the marketing division of Yes and from 2011 to 2012 as director of products and business development in the marketing division of Bezeq. From 2005 to 2008, Mr. Shauli served as director of communications solutions for businesses in marketing department 013 Netvision. Mr. Shauli holds a B.A. in economics and statistics from the Hebrew university of Jerusalem.
Conference Call Details
The Company will be hosting a conference call regarding its results for the first quarter of 2019 on Tuesday, May 28, 2019 at 09:00 am ET, 06:00 am PT, 2:00 UK time, 16:00 Israel time. On the call, management will review and discuss the results, and will be available to answer questions. To participate, please either access the live webcast on the Company's website, or call one of the following teleconferencing numbers below. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.
US Dial-in Number: 1 866 860 9642
UK Dial-in Number: 0 800 051 8913
Israel Dial-in Number: 03 918 0687
International Dial-in Number: +972 3 918 0687
at: 09:00 am Eastern Time; 06:00 am Pacific Time; 14:00 UK Time; 16:00 Israel Time
To access the live webcast of the conference call, please access the investor relations section of Cellcom Israel's website: www.cellcom.co.il. After the call, a replay of the call will be available under the same investor relations section.
About Cellcom Israel
Cellcom Israel Ltd., established in 1994, is a leading Israeli communications group, providing a wide range of communications services. Cellcom Israel is the largest Israeli cellular provider, providing its approximately 2.853 million cellular subscribers (as at March 31, 2019) with a broad range of services including cellular telephony, roaming services for tourists in Israel and for its subscribers abroad, text and multimedia messaging, advanced cellular content and data services and other value-added services in the areas of music, video, mobile office etc., based on Cellcom Israel's technologically advanced infrastructure. The Company operates an LTE 4 generation network and an HSPA 3.5 Generation network enabling advanced high speed broadband multimedia services, in addition to GSM/GPRS/EDGE networks. Cellcom Israel offers Israel's broadest and largest customer service infrastructure including telephone customer service centers, retail stores, and service and sale centers, distributed nationwide. Cellcom Israel further provides OTT TV services, internet infrastructure and connectivity services and international calling services, as well as landline telephone services in Israel. Cellcom Israel's shares are traded both on the New York Stock Exchange (CEL) and the Tel Aviv Stock Exchange (CEL). For additional information please visit the Company's website http://investors.cellcom.co.il.
Forward-Looking Statements
The following information contains, or may be deemed to contain forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995 and the Israeli Securities Law, 1968). In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about the Company, may include projections of the Company's future financial results, its anticipated growth strategies and anticipated trends in its business. These statements are only predictions based on the Company's current expectations and projections about future events. There are important factors that could cause the Company's actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause such differences include, but are not limited to: changes to the terms of the Company's license, new legislation or decisions by the regulator affecting the Company's operations, new competition and changes in the competitive environment, the outcome of legal proceedings to which the Company is a party, particularly class action lawsuits, the Company's ability to maintain or obtain permits to construct and operate cell sites, and other risks and uncertainties detailed from time to time in the Company's filings with the U.S. Securities and Exchange Commission, including under the caption "Risk Factors" in its Annual Report for the year ended December 31, 2018.
Although the Company believes the expectations reflected in the forward-looking statements contained herein are reasonable, it cannot guarantee future results, level of activity, performance or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The Company assumes no duty to update any of these forward-looking statements after the date hereof to conform its prior statements to actual results or revised expectations, except as otherwise required by law.
The Company prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). Unless noted specifically otherwise, the dollar denominated figures were converted to US$ using a convenience translation based on the New Israeli Shekel (NIS)/US$ exchange rate of NIS 3.632 = US$ 1 as published by the Bank of Israel for March 31, 2019.
Voluntary change in accounting policy - In 2019, the management has updated the accounting policy as follows: revenues from long-term credit arrangements (for more than 12 monthly payments) are recognized on the basis of the present value of future cash flows, discounted according to market interest rates at the time of the transaction. The difference between the original credit and its present value over the credit period, is recorded from 2019 as other income (previously was recorded as interest income). The application of the change in the new accounting policy was applied retrospectively. Therefore, the change's influence of the first quarter of 2018 was an increase of other income in approximately NIS 7 million, and as a result, an increase of approximately NIS 7 million in adjusted EBITDA and on the other hand, a decrease of approximately NIS 7 million in financing income.
Use of non-IFRS financial measures
Adjusted EBITDA is a non-IFRS measure and is defined as income before financing income (expenses), net; other income (expenses), net (excluding expenses related to employee voluntary retirement plans and gain (loss) due to sale of subsidiaries); income tax; depreciation and amortization and share based payments. This is an accepted measure in the communications industry. The Company presents this measure as an additional performance measure as the Company believes that it enables us to compare operating performance between periods and companies, net of any potential differences which may result from differences in capital structure, taxes, age of fixed assets and related depreciation expenses. Adjusted EBITDA should not be considered in isolation, or as a substitute for operating income, any other performance measures, or cash flow data, which were prepared in accordance with Generally Accepted Accounting Principles as measures of profitability or liquidity. Adjusted EBITDA does not take into account debt service requirements, or other commitments, including capital expenditures, and therefore, does not necessarily indicate the amounts that may be available for the Company's use. In addition, Adjusted EBITDA as presented by the Company may not be comparable to similarly titled measures reported by other companies, due to differences in the way these measures are calculated. See the reconciliation of net income to Adjusted EBITDA under "Reconciliation of Non-IFRS Measures" in the press release.
Free cash flow is a non-IFRS measure and is defined as the net cash provided by operating activities (including the effect of exchange rate fluctuations on cash and cash equivalents) excluding a loan to Golan Telecom given by 2017, minus the net cash used in investing activities excluding short-term investment in tradable debentures and deposits and proceeds from sales of such debentures (including interest received in relation to such debentures) and its deposits, and from 2019, with the initial application of IFRS 16, lease payments are also deducted which are presented in financing activity. See "Reconciliation of Non-IFRS Measures" below.
Financial Tables Follow
Cellcom Israel Ltd.
(An Israeli Corporation)
Condensed Consolidated Interim Statements of Financial Position (Unaudited)
---
Convenience
translation
into US dollar
(Note 2D)
March 31, March 31,
March 31, December 31,
2018 2019 2019 2018
NIS millions US$ millions NIS millions
(Unaudited)
(Unaudited) (Audited)
Assets
Cash and cash equivalents 593 1,031 284 1,202
Current investments, including derivatives 361 410 113 404
Trade receivables 1,276 1,176 324 1,152
Current tax assets 3 10 3 11
Other receivables 82 74 20 84
Inventory 69 85 23 94
Total current assets 2,384 2,786 767 2,947
Trade and other receivables 881 853 235 852
Property, plant and equipment, net 1,588 1,647 453 1,652
Intangible assets and others, net 1,271 1,305 359 1,298
Right-of-use assets, net and Investment property 771 212
Deferred tax assets 1
Total non- current assets 3,741 4,576 1,259 3,802
Total assets 6,125 7,362 2,026 6,749
Liabilities
Current maturities of debentures and of loans from 565 618 170 620
financial institutions
Current maturities of lease liabilities 217 60
Trade payables and accrued expenses 674 744 205 696
Provisions 94 108 29 105
Other payables, including derivatives 255 228 63 257
Total current liabilities 1,588 1,915 527 1,678
Long-term loans from financial institutions 462 400 110 334
Debentures 2,487 2,692 741 2,911
Long-term lease liabilities 560 154
Provisions 21 20 6 20
Other long-term liabilities 18 5 1 16
Liability for employee rights upon retirement, net 15 14 4 14
Deferred tax liabilities 120 95 26 99
Total non- current liabilities 3,123 3,786 1,042 3,394
Total liabilities 4,711 5,701 1,569 5,072
Equity attributable to owners of the Company
Share capital 1 1 1
Share premium 325 89 325
Receipts on account of share options 10 3 10
Retained earnings 1,409 1,323 364 1,339
Non-controlling interest 4 2 1 2
Total equity 1,414 1,661 457 1,677
Total liabilities and equity 6,125 7,362 2,026 6,749
Cellcom Israel Ltd
.(An Israeli Corporation)
Condensed Consolidated Interim Statements of Income (Unaudited)
---
Convenience
translation
into US dollar
(Note 2D)
Three-month
Three- month
Year ended
period ended period ended December 31,
March 31, March 31,
2018
2019*
2019* 2018
NIS millions
US$millions
NIS millions
(Unaudited)
(Unaudited)
(Audited)
Revenues 933 928 256 3,688
Cost of revenues (665) (695) (191) (2,661)
Gross profit 268 233 65 1,027
Selling and marketing expenses (132) (158) (44) (567)
General and administrative expenses (91) (71) (20) (360)
Other income, net
7* 5 1
1*
Operating profit 52 9 2 101
Financing income
4* 18 5
19*
Financing expenses (44) (45) (12) (190)
Financing expenses, net (40) (27) (7) (171)
Profit (loss) before taxes on income 12 (18) (5) (70)
Tax benefit (taxes on income) (5) 2 1 6
Profit (loss) for the period 7 (16) (4) (64)
Attributable to:
Owners of the Company 7 (16) (4) (62)
Non-controlling interests (2)
Profit (loss) for the period 7 (16) (4) (64)
Earnings (loss) per share
Basic earnings (loss) per share (in NIS) 0.08 (0.14) (0.04) (0.58)
Diluted earnings (loss) per share (in NIS) 0.08 (0.14) (0.04) (0.58)
Weighted-average number of shares used 101,044,557 116,196,729 116,196,729 107,499,543
in the calculation of basic earnings (loss)
per share (in shares)
Weighted-average number of shares used 101,141,836 116,196,729 116,196,729 107,499,543
in the calculation of diluted earnings (loss)
per share (in shares)
*Reclassified - Please see "Voluntary change in accounting policy" section in this press release.
Cellcom Israel Ltd.
(An Israeli Corporation)
Condensed Consolidated Interim Statements of Cash Flows (Unaudited)
---
Convenience
translation
into US dollar
(Note 2D)
Three-month Three- month Year ended
period ended period ended December 31,
March 31, March 31,
2018 2019 2019 2018
NIS millions
US$millions NIS millions
(Unaudited)
(Unaudited) (Audited)
Cash flows from operating
activities
Profit (loss) for the period 7 (16) (4) (64)
Adjustments for:
Depreciation and
amortization 133 214 59 584
Share based payments 2 2
Income tax expense (tax
benefit) 5 (2) (1) (6)
Financing expenses, net
40* 27 7
171*
Changes in operating assets
and liabilities:
Change in inventory 1 9 2 (24)
Change in trade receivables
(including long-term
amounts)
8* (16) (4)
166*
Change in other receivables
(including long-term
amounts) 9 13 4 (21)
Change in trade payables,
accrued expenses and
provisions 31 83 23 (26)
Change in other liabilities
(including long-term
amounts) 5 (5) (1) 11
Payments for derivative
hedging contracts, net (2) (1)
Income tax paid (9) (3) (1) (23)
Net cash from operating
activities 230 303 84 770
Cash flows from investing
activities
Acquisition of property,
plant, and equipment (99) (127) (35) (356)
Additions to intangible
assets and others (47) (57) (16) (237)
Change in current
investments, net (1) 2 1 (56)
Proceeds from sale of
property, plant and
equipment 1
Interest received 4 4 1 14
Receipts from other
derivative contracts, net 1 3
Net cash used in investing
activities (143) (177) (49) (631)
*Reclassified - Please see "Voluntary change in accounting policy" section in this press release.
Cellcom Israel Ltd.
(An Israeli Corporation)
Condensed Consolidated Interim Statements of Cash Flows (Unaudited) (cont`d)
---
Convenience
translation
into US dollar
Three-month Three- month
Year ended
period ended period ended December 31,
March 31, March 31,
2018 2019 2019 2018
NIS millions US$ millions
NIS millions
Cash flows from financing
activities
Payments for derivative
contracts, net (15)
Receipt of long-term
loans from financial
institutions 150 41
Repayment of debentures (362) (308) (85) (556)
Proceeds from issuance of
debentures, net of
issuance costs 396 997
Lease payments (74) (20)
Net cash from (used in)
financing activities 34 (232) (64) 426
Changes in cash and cash
equivalents 66 (171) (47) 676
Cash and cash equivalents
as at the beginning of
the period 527 1,202 331 527
Effects of exchange rate
changes on cash and cash (1)
equivalents
Cash and cash equivalents
as at the end of the
period 593 1,031 284 1,202
Cellcom Israel Ltd
(An Israeli Corporation)
Reconciliation for Non-IFRS Measures
---
Adjusted EBITDA
The following is a reconciliation of net income to Adjusted EBITDA:
Three-month period ended Year ended
March 31, December 31,
---
2018 2019
Convenience 2018
translation
into US dollar
2019
---
NIS millions US$ millions NIS millions
---
Net income (loss) 7 (16) (4) (64)
Taxes on income
(tax benefit) 5 (2) (1) (6)
Financing income (4) (18) (5) (19)
Financing
expenses 44 45 12 190
Other income 1 1 -
Depreciation and
amortization 133 214 59 584
Share based
payments 2 2
---
Adjusted EBITDA 187 224 62 687
===
Free cash flow
The following table shows the calculation of free cash flow:
Three-month period ended Year ended
March 31, December 31,
---
2018 2019
Convenience 2018
translation
into US dollar
2019
---
NIS millions US$ millions NIS millions
---
Cash flows from
operating 230 229 64 769
activities(*)
Cash flows from
investing
activities (143) (177) (49) (631)
Purchase (Sale)
of tradable (3) (6) (2) 43
debentures and deposits
(**)
---
Free cash flow 84 46 13 181
===
(*) Including the effects of exchange rate fluctuations in cash and cash equivalents and as of January 1, 2019, the
initial application of IFRS 16, including lease payments in a total amount of NIS 74 million.
(**) Net of interest received in relation to tradable debentures.
Cellcom Israel Ltd.
(An Israeli Corporation)
Key financial and operating indicators
---
NIS millions unless otherwise stated Q1-2018 Q2-2018 Q3-2018 Q4-2018 Q1-2019 FY-2018
--- ---
Cellular service revenues 437 434 443 416 404 1,730
Fixed-line service revenues 304 300 310 301 317 1,215
Cellular equipment revenues 193 157 146 159 158 655
Fixed-line equipment revenues 39 76 52 82 92 249
Consolidation adjustments (40) (40) (41) (40) (43) (161)
---
Total revenues 933 927 910 918 928 3,688
Cellular adjusted EBITDA 119 78 118 103 146 418
Fixed-line adjusted EBITDA 68 62 73 66 78 269
---
Total adjusted EBITDA 187 140 191 169 224 687
Operating profit (loss) 52 (5) 40 14 9 101
Financing expenses, net 40 43 37 51 27 171
Profit (loss) for the period 7 (37) 1 (35) (16) (64)
Free cash flow 84 56 34 7 46 181
Cellular subscribers at the end of period (in 000's) 2,822 2,809 2,825 2,851 2,853 2,851
Monthly cellular ARPU (in NIS) 51.8 51.8 52.5 49.0 47.2 51.3
Churn rate for cellular subscribers (%) 9.5% 12.6% 10.0% 11.1% 11.0% 43.2%
Cellcom Israel Ltd.
Disclosure for debenture holders as of March 31, 2019
---
Aggregation of the information regarding the debenture series issued by the Company (1), in million NIS
---
Series Original Issuance Date Principal on the Date of
As of 31.03.2019 As of 27.05.2019
Interest Principal Repayment
Issuance Dates
Interest
Linkage
Trustee
Rate
Repayment
(fixed) Dates (3)
Contact Details
--- ---
Principal
Linked Interest Accumulated in Books Debenture Balance Value in
Books (2)
Market Value Principal Balance on Trade Linked Principal Balance
From
To
Balance on Principal
Trade Balance
--- ---
F (4)(5)(6)**
20/03/12 714.802 214.441 221.601 2.372 223.973 232.282 214.441 223.218 4.60%
05.01.17
05.01.20
January-5 Linked to CPI
Strauss Lazar Trust Company (1992) Ltd.
and July-5 Ori Lazar. 17 Yizhak Sadeh St.,
Tel Aviv. Tel: 03- 6237777.
--- ---
H (4)(5)(7)**
08/07/14 949.624 835.669 779.577 3.857 783.434 845.279 835.669 843.089 1.98%
05.07.18
05.07.24
January-5 Linked to CPI
Mishmeret Trust Company Ltd.
03/02/15* and July-5 Rami Sebty. 48 Menachem Begin Rd.
11/02/15* Tel Aviv. Tel: 03-6374355.
--- ---
I (4)(5)(7)**
08/07/14 804.010 723.609 701.924 6.976 708.900 746.330 723.609 723.609 4.14%
05.07.18
05.07.25
January-5
Not linked
Mishmeret Trust Company Ltd.
03/02/15* and July-5 Rami Sebty. 48 Menachem Begin Rd.
11/02/15* Tel Aviv. Tel: 03-6374355.
28/03/16*
--- ---
J (4)(5)
25/09/16 103.267 103.267 103.448 0.594 104.042 103.246 103.267 105.024 2.45%
05.07.21
05.07.26
January-5 Linked to CPI
Mishmeret Trust Company Ltd.
and July-5 Rami Sebty. 48 Menachem Begin Rd.
Tel Aviv. Tel: 03-6374355.
--- ---
K (4)(5)**
25/09/16 710.634 710.634 705.075 5.875 710.950 689.031 710.634 710.634 3.55%
05.07.21
05.07.26
January-5
Not linked
Mishmeret Trust Company Ltd.
01/07/18* and July-5 Rami Sebty. 48 Menachem Begin Rd.
10/12/18* Tel Aviv. Tel: 03-6374355.
--- ---
L(4)(5)**
24/01/18 613.937 613.937 586.699 3.574 590.273 533.695 613.937 613.937 2.50%
05.01.23
05.01.28
January-5
Not linked
Strauss Lazar Trust Company (1992) Ltd.
10/12/18* Ori Lazar. 17 Yizhak Sadeh St.,
Tel Aviv. Tel: 03- 6237777.
--- ---
Total 3,896.274 3,201.557 3,098.324 23.248 3,121.572 3,149.863 3,201.557 3,219.511
---
Comments:
(1) For a summary of the terms of the Company's outstanding debentures see the Company's 2018 Annual Report under "Item 5. Operating and Financial Review and Prospects - B. Liquidity and Capital Resources - Debt Service - Public Debentures". In the reporting period, the Company fulfilled all terms of the debentures and Indentures. Debentures financial covenants - as of March 31, 2019 the net leverage (net debt to Adjusted EBITDA*** excluding one-time events ratio- see definition in the reference above to the Company's 2018 Annual Report (The definition of Adjusted EBITDA is identical to the definition of EBITDA (which the Company used in previous periods)) was 3.14. In the reporting period, no cause for early repayment occurred. (2) Including interest accumulated in the books. (3) Semi-annual payments other than regarding Series L. (4) Regarding the debentures, the Company undertook not to create any pledge on its assets, as long as debentures or loans are not fully repaid, subject to certain exclusions. (5) Regarding the debentures - the Company has the right for early redemption under certain terms. (6) Regarding debenture Series F, 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. (7) In February 2015, pursuant to an exchange offer of the Company's Series H and I debentures for a portion of the Company's outstanding Series D and E debentures, respectively, the Company exchanged approximately NIS 555 million principal amount of Series D debentures with approximately NIS 844 million principal amount of Series H debentures, and approximately NIS 272 million principal amount of Series E debentures with approximately NIS 335 million principal amount of Series I debentures. Series D and E debentures were fully repaid in July 2017 and in January 2017, respectively.
(*) On these dates additional debentures of the series were issued, the information in the table refers to the full series.
(**) As of March 31, 2019, debentures Series H, I, K and L are material, which represent 5% or more of the total liabilities of the Company, as presented in the financial statements.
(***) The definition of net leverage refers to Adjusted EBITDA for a period of 12 consecutive months. Accordingly, the net leverage ratio above includes the effects of the new standard IFRS 16 (applied by the Company as of January 1, 2019) only for the first quarter of 2019. For details of the effects of IFRS 16 on the Company's results see footnote 3 on page 1 of this press release and note 3 to the Company's financial statement for the period ended on March 31, 2019, included elsewhere in this report.
Cellcom Israel Ltd.
Disclosure for debenture holders as of March 31, 2019 (cont`d)
---
Debentures Rating Details*
---
Rating assigned upon Recent date of rating as of Additional ratings
issuance of the Series 27.05.2019 between original
issuance and the recent
date of rating as of
Series
Rating Company Rating as of 31.03.2019 (1) Rating as of 27.5.2019 27.05.2019 (2)
--- ---
Rating
05/2012, 11/2012,
06/2013, 06/2014,
08/2014, 01/2015,
09/2015, 03/2016,
08/2016, 06/2017,
01/2018, 06/2018,
08/2018, 12/2018,
F
S&P Maalot
A+
A+
AA
03/2019 03/2019
AA,AA-,A+ (2)
--- ---
06/2014, 08/2014,
01/2015, 09/2015,
03/2016, 08/2016,
06/2017, 01/2018,
06/2018, 08/2018,
H
S&P Maalot
A+
A+
A+
03/2019 12/2018, 03/2019
A+ (2)
--- ---
06/2014, 08/2014,
01/2015, 09/2015,
03/2016, 08/2016,
06/2017, 01/2018,
06/2018, 08/2018,
I
S&P Maalot
A+
A+
A+
03/2019 12/2018, 03/2019
A+ (2)
--- ---
J
S&P Maalot
A+
A+
A+
03/2019 08/2016, 06/2017,
01/2018, 06/2018,
08/2018, 12/2018,
03/2019
A+ (2)
--- ---
K
S&P Maalot
A+
A+
A+
03/2019 08/2016, 06/2017,
01/2018, 06/2018,
08/2018, 12/2018,
03/2019
A+ (2)
--- ---
L
S&P Maalot
A+
A+
A+
03/2019 01/2018, 06/2018,
08/2018, 12/2018,
03/2019
A+ (2)
--- ---
(1) In March 2019, S&P Maalot updated the Company's rating outlook from an "ilA+/stable" to an "ilA+/negative".
(2) In May 2012, S&P Maalot updated the Company's rating from an "ilAA/negative" to an "ilAA-/negative". In November 2012, S&P Maalot affirmed the Company's rating of "ilAA-/negative". In
June 2013, S&P Maalot updated the Company's rating outlook from an "ilAA-/negative" to an "ilA+/stable". In June 2014, August 2014, January 2015, September 2015, March 2016, August 2016, June 2017,
January 2018, June 2018, August 2018 and December 2018, S&P Maalot affirmed the Company's rating of "ilA+/stable". In March 2019, S&P Maalot updated the Company's rating outlook from an "ilA+/stable"
to an "ilA+/negative". For details regarding the rating of the debentures see the S&P Maalot report dated March 19, 2019, included in the Company's Shelf offering Report filled in the Israeli
Securities Authority website ('MAGNA") on March 19, 2019.
* 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.
Cellcom Israel Ltd.
Aggregation of the information regarding the Company's Material Loans (1), in million NIS
---
Loan
Provision Date Principal Amount as of Interest Rate (nominal) Principal Repayment
31.03.2019 Dates (annual
payments)
Interest Repayment Dates (semi-annual payments)
Linkage
--- ---
From
To
---
Loan from
financial
institution
(2)(3)(4)(5)(6)
06/2016 150 4.60%
30.06.18
30.06.21
June-30
Not linked
and December-31, commencing December 31, 2016 through June 30, 2021
--- ---
Loan from
bank(2)(3)(4)(5)(6)(7)
12/2016 112 4.90%
30.06.18
30.06.22
June-30 and December 30, commencing June 30, 2017 through June 30, 2022
Not linked
--- ---
Loan from
financial
institution(2)(3)(4)(5)(6)
06/2017 200 5.10%
30.06.19
30.06.22
June-30
Not linked
and December-31, commencing December 31, 2017 through June 30, 2022
--- ---
Loan from
bank(2)(3)(4)(5)(6)
03/2019 150 4.00%
30.03.21
30.03.24
March-31
Not linked
and September-30, commencing September 30, 2019 through March 31, 2024
--- ---
Total 612
---
Comments:
(1) For a summary of the terms of the Company's loan agreements see the Company's 2018 Annual Report under "Item 5. Operating and Financial Review and Prospects - B. Liquidity and Capital Resources - Other Credit Facilities" and the reference therein to "- Debt Service - Public Debentures". (2) In the reporting period, the Company fulfilled all terms of the loan agreements. (3) Loan agreements financial covenants - as of March 31, 2019 the net leverage (net debt to Adjusted EBITDA* excluding one-time events ratio- see definition in the reference above to the Company's 2018 Annual Report (The definition of Adjusted EBITDA is identical to the definition of EBITDA (which the Company used in previous periods)) was 3.14. (4) In the reporting period, no cause for early repayment occurred. (5) In the loan agreements, the Company undertook not to create any pledge on its assets, as long as the loans are not fully repaid, subject to certain exclusions. (6) According to the loan agreements the Company may prepay the loans, subject to a prepayment fee. (7) In April 2019, after the end of the reporting period, the Company made early repayment of the loan in an outstanding amount of NIS 112 million (in addition to outstanding accumulated interest until date of repayment).
(*) The definition of net leverage refers to Adjusted EBITDA for a period of 12 consecutive months. Accordingly, the net leverage ratio above includes the effects of the new standard IFRS 16 (applied by the Company as of January 1, 2019) only for the first quarter of 2019. For details of the effects of IFRS 16 on the Company's results see footnote 3 on page 1 of this press release and note 3 to the Company's financial statement for the period ended on Mach 31, 2019, included elsewhere in this report.
Cellcom Israel Ltd.
Summary of Financial Undertakings (according to repayment dates) as of March 31, 2019
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 335,506 80,399 96,896
---
Second
year 114,056 80,399 81,123
---
Third
year 167,700 218,579 72,420
---
Fourth
year 167,700 310,629 60,603
---
Fifth
year
and on 377,068 1,354,054 109,880
---
Total 1,162,030 2,044,060 420,922
---
b. Private debentures and other non-bank credit, excluding such debentures held by the Company's parent company, by a controlling shareholder, by companies controlled by them, or by companies controlled by the Company, based on the Company's "Solo" financial data (in thousand NIS).
Principal payments Gross interest payments
(without deduction of tax)
ILS
linked
to
CPI ILS not linked to CPI Euro Dollar Other
---
First
year 100,000 14,655
---
Second
year 100,000 9,812
---
Third
year 100,000 4,955
---
Fourth
year 50,000 1,264
---
Fifth
year
and on
---
Total 350,000 30,686
---
c. Credit from banks in Israel based on the Company's "Solo" financial data (in thousand NIS).
Principal payments Gross interest payments
(without deduction of tax)
ILS
linked
to
CPI ILS not linked to CPI Euro Dollar Other
---
First
year 28,000 4,800
---
Second
year 28,000 3,430
---
Third
year 28,000 2,056
---
Fourth
year 28,000 684
---
Fifth
year
and on
---
Total 112,000 10,970
---
d. Credit from banks abroad based on the Company's "Solo" financial data (in thousand NIS) - None.
Cellcom Israel Ltd.
Summary of Financial Undertakings (according to repayment dates) as of March 31, 2018 (cont`d)
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 335,506 292,399 119,093
---
Second
year 114,056 217,899 96,926
---
Third
year 167,700 356,079 81,876
---
Fourth
year 167,700 398,129 64,867
---
Fifth
year
and on 377,068 1,391,554 111,382
---
Total 1,162,030 2,656,060 474,144
---
f. Out of the balance sheet Credit exposure based on the Company's "Solo" financial data - None.
g. Out of the balance sheet Credit exposure of all the Company's consolidated companies, excluding companies that are reporting corporations and excluding the Company's data presented in section f above (in thousand NIS) - None.
h. Total balances of the credit from banks, non-bank credit and debentures of all the consolidated companies, excluding companies that are reporting corporations and excluding Company's data presented in sections a - d above (in thousand NIS) - None.
i. Total balances of credit granted to the Company by the parent company or a controlling shareholder and balances of debentures offered by the Company held by the parent company or the controlling shareholder (in thousand NIS) - None.
j. Total balances of credit granted to the Company by companies held by the parent company or the controlling shareholder, which are not controlled by the Company, and balances of debentures offered by the Company held by companies held by the parent company or the controlling shareholder, which are not controlled by the Company (in thousand NIS).
Principal payments Gross interest payments
(without deduction of tax)
ILS ILS not linked to
linked CPI
to
CPI Euro Dollar Other
---
First
year 2 144
---
Second
year 2 144
---
Third
year 3 578 134
---
Fourth
year 3 618 113
---
Fifth
year
and
on 16 2,920 223
---
Total 22 4,120 758
---
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.
References:
(1) Please see "Use of Non-IFRS financial measures" section in this press release.
(2) Reclassified - Adjusted EBITDA before reclassification totaled NIS 180 million. Please see "Voluntary change in accounting policy" section in this press release.
(3) As of January 1, 2019 the Company is applying International Financial Reporting Standard IFRS 16, Leases. The effects of applying the standard in the first quarter of 2019 amounted to an increase of NIS 63 million in Adjusted EBITDA, an increase of NIS 74 million in Cash flows from operating activities and an increase of NIS 4 million in the loss.
Company Contact Investor Relations Contact
Shlomi Fruhling
Ehud Helft
Chief Financial Officer
GK Investor & Public Relations
investors@cellcom.co.il
cellcom@GKIR.com
Tel: +972 52 998 9735
Tel: +1 617 418 3096
---
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SOURCE Cellcom Israel Ltd.
