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Cellcom Israel Announces Second Quarter 2019 Results


NETANYA, Israel, Aug. 15, 2019 /PRNewswire/ --

Cellcom Israel concludes the second quarter of 2019 with a loss of NIS 35 million compared to a loss of NIS 37 million in the corresponding quarter of 2018. The loss includes approximately NIS 52 million of financing expenses which were adversely effected by the high index in the quarter (1.5%).

The Adjusted EBITDA[2] increased to NIS 233[1] million.

Free cash flow[2] for the quarter totaled NIS 55 million and NIS 101 million for the first 6 months of 2019.

The Company's cellular subscribers base increased by approximately 45 thousand subscribers during this quarter.

Nir Sztern, the Company's CEO: "The financial report for the second quarter of 2019 reflects several encouraging results, including: stability of revenues during several consecutive quarters; increase in adjusted EBITDA compared to previous and corresponding quarters; strong free cash flow of NIS 101 million for the first 6 months of 2019. Nonetheless, financing expenses which increased due to the high index in the quarter, weighed down on the Company in this quarter too, which concluded in a loss." 

Second Quarter 2019 Highlights (compared to second quarter of 2018):

  • Total Revenues totaled NIS 920 million ($258 million) compared to NIS 927 million ($260 million) in the second quarter last year, a decrease of 0.8% 
  • Service revenues totaled NIS 695 million ($195 million) compared to NIS 694 million ($195 million) in the second quarter last year, an increase of 0.1%
  • Operating income totaled NIS 6 million ($2 million) compared to Operating loss of NIS 5 million ($1 million) in the second quarter last year
  • Loss totaled NIS 35 million ($10 million) compared to NIS 37 million ($10 million) in the second quarter last year
  • Adjusted EBITDA2 totaled NIS 233 million ($65 million) compared to NIS 140 million ($39 million) in the second quarter last year, an increase of 66.4%
  • Net cash from operating activities totaled NIS 219 million ($61 million) compared to NIS 179 million ($50 million) in the second quarter last year, an increase of 22.3%
  • Free cash flow2 totaled NIS 55 million ($15 million) compared to NIS 56 million ($16 million) in the second quarter last year, a decrease of 1.8%

 

Nir Sztern, the Company's Chief Executive Officer, referred to the results of the second quarter of 2019: "Alongside the intense competition in the communications market, the Cellcom group is in a substantial execution momentum and continues to develop its future growth engines. A few days ago we announced the completion of the investment transaction in IBC and the sale transaction of the fiber-optic infrastructure we deployed in residential areas, to IBC, placing IBC in an excellent position to continue a fast fiber deployment and bring the internet revolution to Israel.

"The financial report for the second quarter of 2019 reflects several encouraging results, including: stability of revenues during several consecutive quarters; increase in adjusted EBITDA compared to previous and corresponding quarters; strong free cash flow of NIS 101 million for the first 6 months of 2019. Nonetheless, financing expenses weighed down on the Company in this quarter too, which concluded in a loss. We believe that Cellcom's strategy, alongside developing new and strong growth engines will assist the Company's financial situation.

"Cellcom's financial situation is stable and strong. Though its debt rating decreased to A which is still a high rating, the company generates a positive cash flow and holds a cash balance of approximately NIS 1.3 billion at quarter end, very high liquidity and continues to have access to the Israeli capital market and debt market."

Shlomi Fruhling, the Company's Chief Financial Officer, said: "The Company's service revenues in the second quarter of 2019 totaled NIS 695 million. The revenues reflect a 2.5% increase compared to the previous quarter and stability compared to the corresponding quarter.

"Service revenues in the cellular segment totaled NIS 420 million in the second quarter of 2019, an increase of 4.0% compared to the previous quarter. The increase resulted from positive seasonality in roaming revenues and from increase in revenues from the network sharing agreements. Service revenues in the fixed-line segment totaled NIS 312 million in the second quarter of 2019, a decrease of 1.6% compared to the previous quarter. The entire decrease resulted from a decrease in operators liaison activity which was offset by the continued growth in internet and TV services.

"Adjusted EBITDA for the quarter totaled NIS 233 million, compared to NIS 224 million in the previous quarter.

"Financing expenses, net, in the second quarter of 2019, totaled NIS 52 million, compared to NIS 27 million in the previous quarter. The increase in financing expenses resulted mainly from an increase from linkage differences to the CPI, in connection with the Company's debentures, due to a high increase of 1.5% in the Israeli consumer price index during the quarter. The financing expenses deepened the loss for the second quarter which totaled NIS 35 million.

"Free cash flow for the second quarter of 2019 totaled NIS 55 million, compared to NIS 46 million in the previous quarter. The improvement in the FCF compared to the previous quarter resulted mainly from a decrease in investments. The Company's cash and cash equivalents balance at end of the second quarter of 2019 are approximately NIS 1.3 billion.

"After the reporting period, the Company completed the investment transaction in IBC and the sale transaction of its fiber-optic infrastructure in residential areas to IBC. Following the completion of the transactions, the Company is expected to substantially decrease its capital investments as early as 2020 and the expenses for wholesale market access payments as more and more customers transfer to IBC's fiber-optic infrastructure.

"The Company's Board of Directors decided not to distribute dividends in respect of the results of the second 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. (CEL) (CEL) ("Cellcom Israel" or the "Company" or the "Group") announced today its financial results for the second quarter of 2019.

The Company reported that revenues for the second quarter of 2019 totaled NIS 920 million ($258 million); Adjusted EBITDA for the second quarter of 2019 totaled NIS 233 million ($65 million), or 25.3% of total revenues; loss for the second quarter of 2019 totaled NIS 35 million ($10 million). Basic loss per share for the second quarter of 2019 totaled NIS 0.30 ($0.08).

 

Main Consolidated Financial Results:


Q2/2019

Q2/2018

Change%

Q2/2019

Q2/2018


NIS million

US$ million
 
(convenience translation)

Total revenues

920

927

(0.8)%

258

260

Operating Income (loss)

6

(5)

N/A

2

(1)

Loss

(35)

(37)

5.4%

(10)

(10)

Free cash flow

55

56

(1.8)%

15

16

Adjusted EBITDA

233

140

66.4%

65

39

Adjusted EBITDA, as percent of total revenues

25.3%

15.1%

67.5%



 

Main Financial Data by Operating Segments:


Cellular (*)

Fixed-line (**)

Consolidation
adjustments

(***)

Consolidated results

NIS million

Q2'19

Q2'18

Change

%

Q2'19

Q2'18

Change

%

Q2'19

Q2'18

Q2'19

Q2'18

Change

%

Total revenues

582

591

(1.5)%

375

376

(0.3)%

(37)

(40)

920

927

(0.8)%

Service revenues

420

434

(3.2)%

312

300

4.0%

(37)

(40)

695

694

0.1%

Equipment revenues

162

157

3.2%

63

76

(17.1)%

-

-

225

233

(3.4)%

Adjusted EBITDA

163

78

109.0%

70

62

12.9%

-

-

233

140

66.4%

Adjusted EBITDA,
as percent of total revenues

28.0%

13.2%

112.1%

18.7%

16.5%

13.3%



25.3%

15.1%

67.5%

(*)    The segment includes the cellular communications services, end user cellular equipment and supplemental services.

(**)    The segment includes landline telephony services, internet 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 (second quarter of 2019 compared to second quarter of 2018):

Revenues for the second quarter of 2019 decreased 0.8% totaling NIS 920 million ($258 million), compared to NIS 927 million ($260 million) in the second quarter last year. The decrease in revenues is mainly attributed to a 3.4% decrease in equipment revenues.

Service revenues totaled NIS 695 million ($195 million) in the second quarter of 2019, a 0.1% increase from NIS 694 million ($195 million) in the second quarter last year.

Service revenues in the cellular segment totaled NIS 420 million ($118 million) in the second quarter of 2019, a 3.2% decrease from NIS 434 million ($122 million) in the second quarter last year. This decrease resulted mainly from the ongoing erosion in the prices of these services as a result of the competition in the cellular market, which was partially offset by growth in revenues from the network sharing agreement.

Service revenues in the fixed-line segment totaled NIS 312 million ($87 million) in the second quarter of 2019, a 4.0% increase from NIS 300 million ($84 million) in the second quarter last year.  The increase resulted mainly from an increase in revenues from internet and TV services. This increase was partially offset by a decrease in revenues from international calling services.

Equipment revenues totaled NIS 225 million ($63 million) in the second quarter of 2019, a 3.4% decrease compared to NIS 233 million ($65 million) in the second quarter last year. The decrease resulted mainly from a decrease in equipment sales in the fixed-line segment.

Cost of revenues for the second quarter of 2019 totaled NIS 679 million ($190 million), a 0.6% increase compared to NIS 675 million ($189 million) in the second quarter of 2018. This increase resulted mainly from increase in cost of access payments to Bezeq and content costs in the fixed-line segment, which were partially offset by one-time costs recorded in the second quarter last year.

Gross profit for the second quarter of 2019 decreased 3.6% to NIS 241 million ($68 million), compared to NIS 252 million ($71 million) in the second quarter of 2018. Gross profit margin for the second quarter of 2019 amounted to 26.2%, down from 27.2% in the second quarter of 2018.

Selling, Marketing, General and Administrative Expenses ("SG&A Expenses") for the second quarter of 2019 increased 1.3% to NIS 241 million ($68 million), compared to NIS 238 million ($67 million) in the second quarter of 2018. This increase is primarily as a result of an increase in expenses of salaries and commissions expenses which were capitalized as part of the customer acquisition costs, as a result of early adoption of an International Financial Reporting Standard (IFRS 15) as of the first quarter of 2017 (the "Adoption of IFRS 15"), that was partially offset by a decrease in salaries expenses.

Other income for the second quarter of 2019 totaled NIS 6 million ($2 million), compared with other expenses of NIS 19 million ($5 million) in the second quarter of 2018. The other income of the second quarter of 2019 mainly included an interest income from the sale of equipment by installments, compared to expenses in the second quarter of 2018 which included NIS 26 million of employee voluntary retirement plan expenses that was partially offset by interest income from sale of equipment by installments.

Operating income for the second quarter of 2019 totaled NIS 6 million ($2 million), compared to operating loss of NIS 5 million ($1 million) in the second quarter of 2018.

Adjusted EBITDA for the second quarter of 2019 increased by 66.4% totaling NIS 233 million ($65 million) compared to NIS 140 million ($39 million) in the second quarter of 2018. Adjusted EBITDA as a percent of revenues for the second quarter of 2019 totaled 25.3%, up from 15.1% in the second quarter of 2018.

Cellular segment Adjusted EBITDA for the second quarter of 2019 totaled NIS 163 million ($46 million), compared to NIS 78 million ($22 million) in the second quarter last year, an increase of 109.0%, which resulted mainly from a decrease in rent expenses in a total amount of NIS 61 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 from a decrease in employee voluntary retirement plan expense that was recognized on the second quarter of 2018. 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 second quarter of 2019 totaled NIS 70 million ($20 million), compared to NIS 62 million ($17 million) in the second quarter last year, a 12.9% 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, a decrease in employee voluntary retirement plan expense that was recorded in the second quarter of 2018 and due to the increase in activity in internet and TV fields.

Financing expenses, net for the second quarter of 2019 totaled NIS 52 million ($15 million), compared with NIS 43 million ($12 million) in the second quarter of 2018, an increase of 20.9%, which resulted mainly from linkage differences to CPI, in connection with the Company's debentures.

Loss for the second quarter of 2019 totaled NIS 35 million ($10 million), compared with loss of NIS 37 million ($10 million) in the second quarter of 2018.

Basic loss per share for the second quarter of 2019 totaled NIS 0.30 ($0.08), compared to basic loss per share of NIS 0.36 ($0.10) in the second quarter last year.

Operating Review

Main Performance Indicators - Cellular segment:


Q2/2019

Q2/2018

Change (%)

Cellular subscribers at the end of period (in thousands)

2,745

2,809

(2.3)%

Churn Rate for cellular subscribers (in %)

11.3%

12.6%

(10.3)%

Monthly cellular ARPU (in NIS)

51.9

51.8

0.2%

 

Cellular subscriber base - Cellular subscriber base of the company increased by 45,000 subscribers during the second quarter of 2019 and was approximately 2.745 million subscribers. At the end of the first quarter of 2019, the company deleted 153,000 subscribers from its subscriber base count, due to a change in the counting method of the company's cellular subscriber base. These subscribers generate negligible revenues to the Company.

Cellular Churn Rate for the second quarter of 2019 totaled to 11.3%, compared to 12.6% in the second quarter last year. (Eliminating the subscribers' deletion due to changing subscribers counting method).

The monthly cellular Average Revenue per User ("ARPU") for the second quarter of 2019 totaled 51.9 NIS ($14.6), compared to NIS 51.8 ($14.5) in the second quarter last year. The increase in ARPU resulted mainly from increase of NIS 2.8 ($0.8) due to prepaid and M2M subscribers' deletion from the Company's cellular subscriber base, that was partially offset ongoing erosion in the prices of cellular services.

Main Performance Indicators - Fixed-line segment:


Q2/2019

Q2/2018

Change (%)

Internet infrastructure field subscribers - (households) at
the end of period (in thousands)

278

248

12.1%

TV field subscribers -  (households) at the
end of period (in thousands)

239

195

22.6%

In the second quarter of 2019, the Company's subscriber base in the TV field increased by approximately 12 thousand net households.

The Company's subscriber base in the internet infrastructure field remained the same compared to the last quarter, as a result of the company's decision to focus on transferring subscribers to independent fiber infrastructure and connecting customers to a standalone tv service.

Financing and Investment Review

Cash Flow

Free cash flow for the second quarter of 2019 totaled NIS 55 million ($15 million), compared to NIS 56 million ($16 million) in the second quarter of 2018, a 1.8% decrease. The decrease in free cash flow resulted mainly from a decrease of receipts from customers that was partially offset by a decrease in payments to end user equipment suppliers, tax payments and salaries expenses.

Total Equity

Total Equity as of June 30, 2019 amounted to NIS 1,628 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 second quarter of 2019, the Company invested NIS 113 million ($32 million) in fixed assets and intangible assets and others (including, among others, investments in the Company's communications networks, investments in deploying of fiber optic, information systems, software and TV set-top boxes and capitalization of part of the customer acquisition costs as a result of the adoption of IFRS 15), compared to NIS 131 million ($37 million) in the second quarter of 2018.

Dividend

On August 14 2019, the Company's Board of Directors decided not to declare a cash dividend for the second 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 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".

Other developments during the second quarter of 2019 and subsequent to the end of the reporting period

Company's Investment Transaction in IBC and Company's sale of fiber-optic infrastructure transaction completed

In August 2019, following the Company's previous reports regarding a possible indirect co-investment of the Company and the Israel Infrastructure Fund, or IIF, in IBC Israel Broadband Company (2013) Ltd., or IBC, and a possible sale of the Company's independent fiber-optic infrastructure in residential areas to IBC, both transactions were completed.

  • The Company paid the sum of appx. NIS 55 million (out of appx. NIS 110 million) for its indirect stake in IBC, the majority of which shall be indirectly provided as shareholder loan to IBC.
  • The Company received the sum of appx. NIS 180 million for its independent fiber-optic infrastructure in residential areas (representing independent fiber-optic infrastructure deployed until the closing), which was financed entirely through shareholder loans indirectly provided to IBC by the Company and IIF, each in the amount of appx. NIS 90 million. Additional consideration shall be paid for additional future deployment to be carried out by the Company.

For additional details see the Company's annual report for the year ended December 31, 2018 on Form 20-F dated March 18, 2019 under Item 4. "Information on the Company - A. History and Development of the Company – Fixed-line Infrastructure – Investment in IBC".

Frequencies Tender Published

In July 2019, the Company announced that the Israeli Ministry of Communications published a frequencies tender including for 5G services, expected to be conducted in Q4/2019. The tender is to include 30MHz in the 700MHz frequencies band, 60MHz in the 2600MHz frequencies band and 300 MHz in the 3500-3800 MHz frequencies band. The tender will be open for MNOs only, other than 100MHz in the 3500-3600 MHz frequencies band which will be open for any contender. New contenders may only provide specific 5G services. MNOs sharing a network shall provide a joint bid (subject to the tender committee's prior approval). The tender further sets maximum frequency allocation per network / new contender, coverage, timeline and quality requirements for winning certain frequencies. The tender also includes certain leniencies and performance based incentives.

The Company is studying the tender documents and at this time cannot evaluate its implications on the Company.

For additional details see the Company's most recent annual report for the year ended December 31, 2018 on Form 20-F, filed on March 18, 2019, under "Item 3. Key Information – D. Risk Factors – Risks Related to our Business – We face intense competition in all aspects of our business", "- We may be adversely affected by significant technological and other changes in the cellular communications industry" and "Item 4. Information on The Company – B. Business Overview – Network and Infrastructure- Spectrum allocation".

Rating Downgrade In Relation To Debentures Traded In Israel

In August 2019, the Company announced that Standard & Poor's Maalot, or Maalot, downgraded the Company's rating to ilA and maintained the Company's rating outlook at "negative", in relation to the Company's debentures traded on the Tel Aviv Stock Exchange.

According to Maalot's report, the downgrade of rating reflects Maalot's estimation that the intensive competition in the market will continue through 2019-2020 (at least) and further weakening of the Company's operational performance, which may result in Adjusted EBITDA margin of less than 20%; erosion in the Company's operational performance without substantial reduction of its debt will lead to increased leverage and finance risk; investment in IBC may benefit the Company's business profile in the mid-long range due to reduction of its dependency on Bezeq's internet infrastructure. According to Maalot's report, the "negative" forecast reflects Maalot's estimation of further erosion to the Company's operational performance due to the competition in the market, and given the high investment needs which may lead to very low free cash flow over the next 12 months.

The aforementioned downgrade does not increase the Company's interest payments on its current debt.

For additional details regarding the Company's public debentures and undertakings of the Company in relation to their rating included in the Company's shelf prospectus, see the Company's annual report on Form 20-F for the year ended December 31, 2018 filed on March 18, 2019, under "Item 5. Operating and Financial Review and Prospects - B. Liquidity and Capital Resources – Debt Service –Public Debentures" and our most recent report on Form 6-K dated March 19,2019.

A security rating is not a recommendation to buy, sell or hold securities, it may be subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.

Changes in Management

In August 2019, Ms. Sharon Amit announced her resignation from her position as VP of human resources of the Company. Ms. Amit will continue to serve until her replacement is nominated.

For additional details, see the Company's annual report on Form 20-F for the year ended December 31, 2018 filed on March 18, 2019, under "Item 6. Directors, Senior Management and Employees – A. Directors and Employees".

Conference Call Details

The Company will be hosting a conference call regarding its results for the second quarter of 2019 on Thursday, August 15, 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: 1 866 744 5399

UK Dial-in Number: 0 800 4048 418

Israel Dial-in Number: 03 918 0691

International Dial-in Number: +972 3 918 0691

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 2.745 million cellular subscribers (as at June 30, 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 2018 Annual Report. 

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 3.566 = US$ 1 as published by the Bank of Israel for June 30, 2019.

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, 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 deposits. See "Reconciliation of Non-IFRS Measures" below.

 

 

Financial Tables Follow

 

Cellcom Israel Ltd.

(An Israeli Corporation)


Condensed Consolidated Interim Statements of Financial Position (Unaudited)




June30,

2018


June30,

2019


June 30,

2019


December 31,

2018



NIS millions


US$ millions


NIS millions










Assets









Cash and cash equivalents


831


855


240


1,202

Current investments, including derivatives


398


428


120


404

Trade receivables


1,215


1,124


315


1,152

Current tax assets


12


8


2


11

Other receivables


86


81


23


84

Inventory


68


60


17


94










Total current assets


2,610


2,556


717


2,947










Trade and other receivables


868


836


234


852

Property, plant and equipment, net


1,602


1,639


460


1,652

Intangible assets and others, net


1,284


1,306


366


1,298

Right-of-use assets, net and Investment property


-


759


213


-










Total non- current assets


3,754


4,540


1,273


3,802










Total assets


6,364


7,096


1,990


6,749










Liabilities









Current maturities of debentures and of loans from financial institutions


647


512


144


620

Current maturities of lease liabilities


-


218


61


-

Trade payables and accrued expenses


655


692


194


696

Provisions


103


103


29


105

Other payables, including derivatives


327


258


72


257










Total current liabilities


1,732


1,783


500


1,678










Long-term loans from financial institutions


334


300


84


334

Debentures


2,498


2,711


760


2,911

Long-term lease liabilities


-


556


156


-

Provisions


21


21


6


20

Other long-term liabilities


3


4


1


16

Liability for employee rights upon retirement, net


15


14


4


14

Deferred tax liabilities


108


79


22


99










Total non- current liabilities


2,979


3,685


1,033


3,394










Total liabilities


4,711


5,468


1,533


5,072










Equity attributable to owners of the Company









Share capital


1


1


-


1

Share premium


259


335


94


325

Receipts on account of share options


17


-


-


10

Retained earnings


1,372


1,290


362


1,339










Non-controlling interest


4


2


1


2










Total equity


1,653


1,628


457


1,677










Total liabilities and equity


6,364


7,096


1,990


6,749


 

Cellcom Israel Ltd.

(An Israeli Corporation)


Condensed Consolidated Interim Statements of Income (Unaudited)







Convenience
translation

into US dollar






Convenience
translation 

into US dollar




For the six
  months ended
  June 30,


For the six
months ended
  June 30,


For the three
months ended
  June 30,


For the three
months ended
  June 30,


For the 
year ended
December 31,


2018


2019


2019


2018


2019


2019


2018


NIS millions


US$millions


NIS millions


US$millions


NIS millions















Revenues

1,860


1,848


518


927


920


258


3,688

Cost of revenues

(1,340)


(1,374)


(385)


(675)


(679)


(190)


(2,661)















Gross profit

520


474


133


252


241


68


1,027















Selling and marketing
expenses

(276)


(307)


(86)


(144)


(149)


(42)


(567)

General and administrative
expenses

(185)


(163)


(46)


(94)


(92)


(26)


(360)

Other income (expenses), net

(12)


11


3


(19)


6


2


1















Operating profit (loss)

47


15


4


(5)


6


2


101















Financing income

14


29


8


11


12


3


19

Financing expenses

(97)


(108)


(30)


(54)


(64)


(18)


(190)

Financing expenses, net

(83)


(79)


(22)


(43)


(52)


(15)


(171)















Loss before taxes on income

(36)


(64)


(18)


(48)


(46)


(13)


(70)















Tax benefit

6


13


4


11


11


3


6

Loss for the period

(30)


(51)


(14)


(37)


(35)


(10)


(64)

Attributable to:














   Owners of the Company

(30)


(51)


(14)


(37)


(35)


(10)


(62)

   Non-controlling interests

-


-


-


-


-


-


(2)

Loss for the period

(30)


(51)


(14)


(37)


(35)


(10)


(64)















Loss per share














Basic loss per share (in NIS)

(0.29)


(0.44)


(0.12)


(0.36)


(0.30)


(0.08)


(0.58)















Diluted loss per share (in NIS)

(0.29)


(0.44)


(0.12)


(0.36)


(0.30)


(0.08)


(0.58)















Weighted-average number of
shares used in the calculation of
basic loss per share (in shares)

101,446,365


116,196,729


116,196,729


101,843,757


116,196,729


116,196,729


107,449,543















Weighted-average number of
shares used in the calculation of
diluted loss per share (in shares)

101,446,365


116,196,729


116,196,729


101,843,757


116,196,729


116,196,729


107,449,543

 

 

 

Cellcom Israel Ltd.

(An Israeli Corporation)


Condensed Consolidated Interim Statements of Cash Flows (Unaudited)







Convenience
translation
into US dollar






Convenience
translation
into US dollar




For the six
 months ended
June 30,


For the six
months ended
  June 30,

For the three
 months ended
June 30,


For the three
months ended
  June 30,


For the
 year ended
December 31,


2018


2019


2019


2018


2019


2019


2018


NIS millions


US$ millions


NIS millions


US$millions


NIS millions


Cash flows from operating
activities


Loss for the period

(30)


(51)


(14)


(37)


(35)


(10)


(64)

Adjustments for: 














Depreciation and amortization

278


439


123


145


225


63


584

Share based payments

2


2


1


-


2


1


2

Loss from sale of property, plant
and equipment

-


1


-


-


1


-


-

tax benefit

(6)


(13)


(4)


(11)


(11)


(3)


(6)

Financing expenses, net

83


79


22


43


52


15


171


Changes in operating assets and
liabilities:














Change in inventory

2


34


10


1


25


7


(24)

Change in trade receivables (including
long-term amounts)

82


51


14


74


67


19


166

Change in other receivables (including
long-term amounts)

(16)


1


-


(25)


(12)


(3)


(21)

Changes in trade payables, accrued
expenses and provisions

(11)


(10)


(3)


(42)


(93)


(26)


(26)

Change in other liabilities (including
long-term amounts)

41


3


1


36


8


2


11

Payments for derivative hedging
contracts, net

(2)


(7)


(2)


-


(6)


(2)


-

Income tax paid

(14)


(7)


(2)


(5)


(4)


(1)


(23)

Net cash from operating activities

409


522


146


179


219


62


770


Cash flows from investing activities














Acquisition of property, plant and
equipment

(168)


(186)


(52)


(69)


(59)


(17)


(356)

Acquisition of intangible assets and
others

(109)


(111)


(31)


(62)


(54)


(15)


(237)

Change in current investments, net

(37)


(9)


(2)


(36)


(11)


(3)


(56)

Receipts for other derivative
contracts, net

3


8


2


3


7


2


3

Proceeds from sale of property,
plant and equipment

-


-


-


-


-


-


1

Interest received 

7


7


2


3


3


1


14

Proceeds from sale of shares in a
consolidated company, net of cash
disposed

5


-


-


5


-


-


-

Net cash used in investing
activities

(299)


(291)


(81)


(156)


(114)


(32)


(631)


 

 

Cellcom Israel Ltd.

(An Israeli Corporation)


Condensed Consolidated Interim Statements of Cash Flows (cont'd) (Unaudited)














Convenience
translation
into US dollar




Convenience
translation
into US dollar




For the six
 months ended
June 30,


For the six
months ended
  June 30,


For the three
 months ended
June 30,


For the three
months ended
  June 30,


For the
 year ended
December 31,


2018


2019


2019


2018


2019


2019


2018


NIS millions


US$ millions


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


42


-


-


-


-

Payments for long-term loans from
financial institutions

(50)


(212)


(60)


(50)


(212)


(59)


(78)

Repayment of debentures

(362)


(308)


(86)


-


-


-


(556)

Proceeds from issuance of
debentures, net of issuance costs

396


-


-


-


-


-


997

Interest paid

(65)


(75)


(21)


(10)


(10)


(3)


(126)

Acquisition of non-controlling
interests

-


-


-


-


-


-


(19)

Equity offering

275


-


-


275


-


-


275

Proceeds from exercise of share
options

-


-


-


-


-


-


59

Lease payments

-


(133)


(37)


-


(59)


(17)


-















Net cash from (used in) financing
activities

194


(578)


(162)


215


(281)


(79)


537















Changes in cash and cash
equivalents

304


(347)


(97)


238


(176)


(49)


676















Cash and cash equivalents as at
the beginning of the period

527


1,202


337


593


1,031


289


527

Effects of exchange rate changes
on cash and cash equivalents

-


-


-


-


-


-


(1)

Cash and cash equivalents as at
the end of the period

831


855


240


831


855


240


1,202

 

 

Cellcom Israel Ltd.

(An Israeli Corporation)


Reconciliation for Non-IFRS Measures


Adjusted EBITDA


The following is a reconciliation of loss to Adjusted EBITDA:



Three-month period ended

June 30,

Year ended

December 31,


2018

2019

Convenience

translation

into US dollar

2019

2018


NIS millions

US$ millions

NIS millions

Loss for the period..........................

(37)

(35)

(10)

(64)

Tax benefit......................................

(11)

(11)

(3)

(6)

Financing income............................

(11)

(12)

(3)

(19)

Financing expenses........................

54

64

18

190

Depreciation and amortization.........

145

225

63

584

Share based payments...................

-

2

-

2

Adjusted EBITDA.............................

140

233

65

687

 

Free cash flow


The following table shows the calculation of free cash flow:



Three-month period ended

June 30,

Year ended

December 31,


2018

2019

Convenience

translation

into US dollar

2019

2018


NIS millions

US$ millions

NIS millions

Cash flows from operating
   activities(*).........................................

179

161

45

769

Cash flows from investing activities.....

(156)

(115)

(32)

(631)

Sale of short-term tradable
   debentures and deposits (**).............

33

9

2

43

Free cash flow.....................................

56

55

15

181

(*)   Including the effects of exchange rate fluctuations in cash and cash equivalents.

(**) 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

Q2-2019

FY-2018









Cellular service revenues

437

434

443

416

404

420

1,730

Fixed-line service revenues

304

300

310

301

317

312

1,215









Cellular equipment revenues

193

157

146

159

158

162

655

Fixed-line equipment revenues

39

76

52

82

92

63

249









Consolidation adjustments

(40)

(40)

(41)

(40)

(43)

(37)

(161)

Total revenues

933

927

910

918

928

920

3,688









Cellular adjusted EBITDA

119

78

118

103

146

163

418

Fixed-line adjusted EBITDA

68

62

73

66

78

70

269

Total adjusted EBITDA

187

140

191

169

224

233

687









Operating profit (loss)

52

(5)

40

14

9

6

101

Financing expenses, net

40

43

37

51

27

52

171

Profit (loss) for the period

7

(37)

1

(35)

(16)

(35)

(64)









Free cash flow

84

56

34

7

46

55

181









Cellular subscribers at the end of
period (in 000's)

2,822

2,809

2,825

2,851

2,853

2,745

2,851

Monthly cellular ARPU (in NIS)

51.8

51.8

52.5

49.0

47.2

51.9

51.3

Churn rate for cellular subscribers (%)

9.5%

12.6%

10.0%

11.1%

11.0%

11.3%

43.2%




Cellcom Israel Ltd.


Disclosure for debenture holders as of June 30, 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 Issuance

As of 30.06.2019

As of 14.08.2019

Interest Rate (fixed)

Principal Repayment
Dates

Interest
Repayment
Dates (3)

Linkage

Trustee

Contact Details

 

Principal

Balance on
Trade

Linked
Principal
Balance

Interest
Accumulated
in Books

Debenture
Balance  
Value in
Books (2)

Market Value

Principal
Balance on
Trade

Linked
Principal
Balance

From

To

F (4)(5)(6)**

20/03/12

714.802

214.441

224.877

4.985

229.862

228.508

214.441

223.526

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.

H (4)(5)(7)(8)**

08/07/14
03/02/15*
11/02/15*

949.624

835.669

795.950

8.105

804.055

738.169

835.669

677.557

1.98%

05.07.18

05.07.24

January-5
and July-5

Linked to CPI

Mishmeret Trust Company Ltd. Rami Sebty. 48 Menachem Begin Rd. Tel Aviv. Tel: 03-6374355.

I (4)(5)(7)(8)**

08/07/14
03/02/15*
11/02/15*
28/03/16*

804.010

723.609

703.413

14.445

717.858

657.680

723.609

623.438

4.14%

05.07.18

05.07.25

January-5
and July-5

Not linked

Mishmeret Trust Company Ltd. Rami Sebty. 48 Menachem Begin Rd. Tel Aviv. Tel: 03-6374355.

J (4)(5)

25/09/16

103.267

103.267

105.034

1.249

106.283

104.072

103.267

104.415

2.45%

05.07.21

05.07.26

January-5 and July-5

Linked to CPI

Mishmeret Trust Company Ltd. Rami Sebty. 48 Menachem Begin Rd. Tel Aviv. Tel: 03-6374355.

K (4)(5)**

25/09/16

01/07/18*

10/12/18*

710.634

710.634

705.357

12.164

717.521

674.178

710.634

705.330

3.55%

05.07.21

05.07.26

January-5 and July-5

Not linked

Mishmeret Trust Company Ltd. Rami Sebty. 48 Menachem Begin Rd. Tel Aviv. Tel: 03-6374355.

L (4)(5)**

24/01/18

10/12/18*

613.937

613.937

587.605

7.401

595.006

532.161

613.937

587.923

2.50%

05.01.23

05.01.28

January-5

Not linked

Strauss Lazar Trust Company (1992) Ltd. Ori Lazar. 17 Yizhak Sadeh St., Tel Aviv. Tel: 03- 6237777.

Total


3,896.274

3,201.557

3,122.236

48.349

3,170.585

2,934.768

3,201.557

2,922.189







 

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 June 30, 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 2.75. 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. (8) On July 5, 2019, after the end of the reporting period, the Company repaid principal payments of approximately NIS 196 million of Series H and I debentures (the ex-date of which was June 23, 2019).

(*) On these dates additional debentures of the series were issued, the information in the table refers to the full series.

(**) As of June 30, 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) for the first and second quarters of 2019. For details of the effects of IFRS 16 on the Company's results see footnote 1 on page 1 of this press release and note 3 to the Company's financial statement for the period ended on June 30, 2019, included elsewhere in this report.

 

Cellcom Israel Ltd.


Disclosure for debenture holders as of June 30, 2019 (cont`d)


Debentures Rating Details* 


Series

Rating
Company

Rating as of
30.06.2019 (1)

Rating as of

14.08.2019

Rating assigned upon
issuance of the Series

Recent date of rating
as of 14.08.2019

Additional ratings between original issuance and the recent date of
rating as of 14.08.2019 (2)


Rating

F

S&P Maalot

A+

A

AA

08/2019

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, 03/2019, 08/2019

AA,AA-,A+,A (2)

H

S&P Maalot

A+

A

A+

08/2019

06/2014, 08/2014, 01/2015, 09/2015, 03/2016, 08/2016, 06/2017, 01/2018, 06/2018, 08/2018, 12/2018, 03/2019, 08/2019

A+,A (2)

I

S&P Maalot

A+

A

A+

08/2019

06/2014, 08/2014, 01/2015, 09/2015, 03/2016, 08/2016, 06/2017, 01/2018, 06/2018, 08/2018, 12/2018, 03/2019, 08/2019

A+,A (2)

J

S&P Maalot

A+

A

A+

08/2019

08/2016, 06/2017, 01/2018, 06/2018, 08/2018, 12/2018, 03/2019, 08/2019

A+,A (2)

K

S&P Maalot

A+

A

A+

08/2019

08/2016, 06/2017, 01/2018, 06/2018, 08/2018, 12/2018, 03/2019, 08/2019

A+,A (2)

L

S&P Maalot

A+

A

A+

08/2019

 01/2018, 06/2018, 08/2018, 12/2018, 03/2019, 08/2019

A+,A (2)

(1)       In August 2019, S&P Maalot updated the Company's rating outlook from an "ilA+/negative" 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". In August 2019, S&P Maalot updated the Company's rating outlook from an "ilA+/negative" to an "ilA/negative". For details regarding the rating of the debentures see the S&P Maalot report dated August 5, 2019, filled with the Israeli Securities Authority website ('MAGNA") on August 5, 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
30.06.2019

Interest Rate
(nominal)

Principal Repayment
Dates (annual
payments)

Interest
Repayment
Dates (semi-
annual
payments)

Linkage

From

To



Loan from financial
institution (2)(3)(4)(5)(6)

06/2016

100

4.60%

30.06.18

30.06.21

June-30

and December-31,
commencing
December 31,
2016 through
June 30, 2021

Not
linked

Loan from financial
institution(2)(3)(4)(5)(6)

06/2017

150

5.10%

30.06.19

30.06.22

June-30

and December-31,
commencing
December 31,
2017 through
June 30, 2022

Not
linked

Loan from bank(2)(3)(4)(5)(6)

03/2019

150

4.00%

30.03.21

30.03.24

March-31

and September-30,
commencing
September 30,
2019 through
March 31,
2024

Not
linked

Total


400








 

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 June 30, 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 Adjusted EBITDA (which the Company used in previous periods)) was 2.75. (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.

(*) 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) for the first and second quarters of 2019. For details of the effects of IFRS 16 on the Company's results see footnote 1 on page 1 of this press release and note 3 to the Company's financial statement for the period ended on June 30, 2019, included elsewhere in this report.

Cellcom Israel Ltd.
Summary of Financial Undertakings (according to repayment dates) as of June 30, 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

339,055

80,369

-

-

-

97,188

Second year

115,500

80,369

-

-

-

81,291

Third year

169,857

218,396

-

-

-

72,556

Fourth year

169,857

310,483

-

-

-

60,702

Fifth year and on

381,999

1,353,480

-

-

-

109,972

Total

1,176,268

2,043,097

-

-

-

421,709

 

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

-

-

-

12,267

Second year

-

100,000

-

-

-

7,390

Third year

-

50,000

-

-

-

2,550

Fourth year

-

-

-

-

-

-

Fifth year and on

-

-

-

-

-

-

Total

-

250,000

-

-

-

22,207

 

c.  Credit from banks in Israel based on the Company's "Solo" financial data (in thousand NIS) - None.

 


Principal payments

Gross interest
payments
(without
deduction of
tax)

ILS linked to
CPI

ILS not
linked to CPI

Euro

Dollar

Other

First year

-

-

-

-

-

6,008

Second year

-

37,500

-

-

-

5,992

Third year

-

37,500

-

-

-

4,500

Fourth year

-

37,500

-

-

-

3,000

Fifth year and on

-

37,500

-

-

-

1,502

Total

-

150,000

-

-

-

21,002

 

Cellcom Israel Ltd.

Summary of Financial Undertakings (according to repayment dates) as of June 30, 2019 (cont`d)

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

339,055

180,369

-

-

-

115,464

Second year

115,500

217,869

-

-

-

94,672

Third year

169,857

305,896

-

-

-

79,606

Fourth year

169,857

347,983

-

-

-

63,702

Fifth year and on

381,999

1,390,980

-

-

-

111,473

Total

1,176,268

2,443,097

-

-

-

464,917

 

f.  Out of the balance sheet Credit exposure based on the Company's "Solo" financial data - None.

g. Out of the balance sheet Credit exposure of all the Company's consolidated companies, excluding companies that are reporting corporations and excluding the Company's data presented in section f above (in thousand NIS) - None.

h. Total balances of the credit from banks, non-bank credit and debentures of all the consolidated companies, excluding companies that are reporting corporations and excluding Company's data presented in sections a - d above (in thousand NIS) - None.

i. Total balances of credit granted to the Company by the parent company or a controlling shareholder and balances of debentures offered by the Company held by the parent company or the controlling shareholder (in thousand NIS) - None.

j. Total balances of credit granted to the Company by companies held by the parent company or the controlling shareholder, which are not controlled by the Company, and balances of debentures offered by the Company held by companies held by the parent company or the controlling shareholder, which are not controlled by the Company (in thousand NIS).

 


Principal payments

Gross interest
payments
(without
deduction of tax)

ILS linked
to CPI

ILS not
linked to
CPI

Euro

Dollar

Other

First year

1,474

32

-

-

-

274

Second year

263

32

-

-

-

211

Third year

357

760

-

-

-

191

Fourth year

357

764

-

-

-

157

Fifth year and on

730

3,495

-

-

-

279

Total

3,181

5,083

-

-

-

1,112

 

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.

[1] As of January 1, 2019, the Company is applying International Financial Reporting Standard, IFRS 16, Leases. The effects of applying the standard in the second quarter of 2019 amounted to an increase of NIS 68 million in Adjusted EBITDA, an increase of NIS 59 million in Cash flows from operating activities and an increase of NIS 1 million in the loss.

[2] Please see "Use of Non-IFRS financial measures" section in continued of this press release.

Company Contact
Shlomi Fruhling
Chief Financial Officer
investors@cellcom.co.il  
Tel: +972 52 998 9735


Investor Relations Contact
Ehud Helft
GK Investor & Public Relations
cellcom@GKIR.com   
Tel: +1 617 418 3096

 

Cision

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