|
Cellcom Israel Announces First Quarter 2008 Results
NETANYA, Israel, May 14 /PRNewswire-FirstCall/ --
- Cellcom Israel Concludes Another Strong Quarter; A Record Quarter in
Terms of Total Revenues, EBITDA, Operating Income and Net Income
- These Record Results Achieved Despite the Ongoing Price Erosions, the
Increased Expenses due to the Preparation for Number Portability and the
Increased Market Competition;
- Quarterly Net Income Increased 31.3%; EBITDA(1) up by 11%
- Cellcom Israel Declares a First Quarter Dividend of NIS 2.65 per Share
(Totals Approx. NIS 258 Million)
First Quarter 2008 Highlights (results compared to first quarter of
2007):
- Total Revenues (including revenues from end-user equipment) increased
10.9% to NIS 1,595 million ($449 million)
- Total Revenues from services increased 5.8% to NIS 1,358 million ($382
million)
- Revenues from content and value added services (including SMS)
increased 41%, reaching 10.9% of services revenues
- EBITDA increased 11% to NIS 593 million ($167 million); EBITDA margin
37.2%, up from 37.1%
- Operating income increased 22.2% to NIS 424 million ($119 million)
- Net income increased 31.3% to NIS 273 million ($77 million)
- Subscriber base increased approx. 23,000; reaching approx. 3.096
million at the end of March 2008
- 3G subscribers reached approx. 523,000 at the end of March 2008, net
addition of approx. 104,000
- The Company Declared first quarter dividend of NIS 2.65 per share
Cellcom Israel Ltd. ("Cellcom Israel", the "Company"), announced today its financial results for the first quarter of 2008. Revenues for the first quarter 2008 totaled NIS 1,595 million ($449 million); EBITDA for the first quarter 2008 totaled NIS 593 million ($167 million), or 37.2% of revenues; and net income for the first quarter 2008 reached NIS 273 million ($77 million). Earnings per basic share for the first quarter 2008 reached NIS 2.80 ($0.79).
Commenting on the results, Amos Shapira, Chief Executive Officer said, "I am very pleased with our first quarter 2008 results, especially given the competitive environment and the continuing price erosions. I want to thank all our employees and managers for the achievements this quarter, as well as for implementing the thought-out strategy in this changing market environment, further enhancing our status as the leading cellular company in Israel. Our results this quarter continued to be impacted by the increased expenses and payments for the number portability implemented in December 2007, however, I am pleased to note that the majority of these expenses terminated by the end of the first quarter.
This quarter we bore the fruits of our aggressive approach to develop additional activities for driving revenues, while constantly monitoring expenses. Cellcom Israel presents today a record quarter in terms of total revenues, EBITDA, operating income and net income. The increased revenues are specifically notable, in light of the continuing price erosions, that reached this quarter to approximately 3.5% compared to first quarter last year.
On the technology side, almost two years after launching our advanced HSDPA 3.5 G services, our 3G subscriber base continues to grow, reaching close to 523,000 as of the end of March 2008, up 104,000 this quarter, all of which are post-paid subscribers, characterized by higher ARPU. Furthermore, we continue to strive to enhance customer relationships through broad and successful marketing initiatives, in line with our strategy to constantly innovate, improve service levels and drive customer satisfaction".
Mr. Shapira added: "This quarter, I am also pleased to note, we further increased our subscriber base, while increasing revenues from content and value added services, reaching 10.9% of our service revenues. Furthermore, we deepened our penetration of landline and transmission services in the business sector which contributed to the Company's growth capability. During the quarter, we enhanced our offering in the landline services by offering our customers a variety of new advanced services, using the Next Generation Network (NGN). Simultaneously, we invest many efforts in efficiency measures, such as bringing in house the installation services of hands-free vehicle devices and changing our handset repair service layout, in order to increase profitability margins and to compensate for the price erosions, resulting mainly from the increased competition".
Tal Raz, Chief Financial Officer, commented: "This was a strong quarter in terms of profitability for the Company, resulting mainly from the 9% increase in airtime minutes, higher revenues from content services as well as ongoing cost efficiencies. Our ongoing efficiency measures contributed to a decline in marketing, sales, general and administrative expenses as percentage of revenues from 21.4% in the first quarter last year to 19.4% in the first quarter this year. Our Free Cash Flow1 for the first quarter totaled NIS 78 million and was impacted mainly by the increase in the Company's expenses for preparation for number portability, which mainly include an increase in payments for handsets procurement and payroll expenses attributed to the increased workforce. The majority of these payments were finalized by the end of the first quarter 2008. At the beginning of the first quarter 2008, we also paid a one time catch up tax payment in the amount of NIS 70 million for 2007 accrued tax liability. I am pleased to note, however, that our stronger financial performance this quarter partially mitigated the impact these three exceptional items had on our Free Cash Flow".
Main Financial and Performance Indicators:
Q1/2008 Q1/2007 % Change Q1/2008 Q1/2007
million NIS million US$
(convenience
translation)
Total Services revenues 1,358 1,284 5.8% 382.0 361.4
Revenues from content and
value added services 148 105 41.0% 41.7 29.6
Handset and accessories
revenues 237 154 53.9% 66.7 43.3
Total revenues 1,595 1,438 10.9% 448.9 404.7
Operating Profit 424 347 22.2% 119.3 97.7
Net Income 273 208 31.3% 76.8 58.5
Cash Flow from Operating
Activities, net of Investing
Activities 78 267 -70.8% 22.0 75.1
EBITDA 593 534 11.0% 166.9 150.3
EBITDA, as percent of
Revenues 37.2% 37.1% 0.3%
Subscribers end of period
(in thousands) 3,096 2,928 5.7%
Estimated Market Share(2) 34% 34% -
Average Monthly MOU (in
minutes) 351 341 2.9%
Monthly ARPU 145 146 -0.7% 40.8 41.1
Financial Review
Revenues for the first quarter of 2008 totaled NIS 1,595 million ($449 million), a 10.9% increase compared to NIS 1,438 million ($405 million) in the first quarter last year. The increase in revenues resulted from a 5.8% increase in revenues from services, reaching NIS 1,358 million ($382 million) compared to NIS 1,284 million ($361 million) in the first quarter last year, as well as from a 53.9% increase in handset and accessories' revenues from NIS 154 million ($43 million) in the first quarter last year, to NIS 237 million ($67 million) in the first quarter 2008. The increase in revenues from services during the first quarter is attributed mainly to an increase of approximately 9% in airtime usage (outgoing and incoming), following the increase in the Company's subscriber base and Minutes of Use ("MOU") per subscriber. Revenues also reflected a 41% increase in revenues from content and value added services (including SMS) in the first quarter 2008, compared to the first quarter last year, reaching NIS 148 million ($42 million), or 10.9% of revenues from services. The increase in revenues from services was partially offset by the reduction of interconnect tariffs and the ongoing airtime price erosion. The increase in handset and accessories' revenues primarily resulted from a larger amount of handsets sold during the first quarter of 2008 and an increase in the average handset sale price, due to larger sales of advanced 3G handsets in the first quarter of 2008.
Cost of revenues for the first quarter of 2008 totaled NIS 879 million ($247 million), compared to NIS 784 million ($221 million) in the first quarter last year, an increase of 12.1%. The increase in cost of revenues primarily resulted from an increase in interconnect expenses due to increase in outgoing calls terminating in other operators' networks, as well as an increase in cost of content and value-added services due to increased usage. The increase also resulted from an increase in handset costs following the higher number of handsets sold during the first quarter of 2008, partially offset by increased efficiency in handset procurement.
Gross profit for the first quarter of 2008 totaled NIS 716 million ($202 million), a 9.5% increase compared to NIS 654 million ($184 million) in the first quarter of 2007. Gross profit margin for the first quarter 2008 declined to 44.9% from 45.5% in the first quarter last year, mainly due to the significant increase in handsets sales during the quarter compared to the first quarter last year, which produces lower margins.
Selling, Marketing, General and Administrative Expenses ("SG&A Expenses") for the first quarter of 2008 totaled NIS 310 million ($87 million), or 19.4% of total revenues, compared to NIS 308 million ($87 million), or 21.4% of total revenues, in the first quarter of 2007. The SG&A Expenses in the first quarter 2008 were mainly effected by an increase in salaries and related expenses resulting from the expansion of our workforce in the second half of 2007, as part of our strategy to constantly improve service level and customer satisfaction, as well as in preparation for the implementation of number portability. This increase was partially offset by a decrease in advertising expenses and in sales commissions, as we started to defer sales commissions, related to the acquisition and retention of subscribers bearing guaranteed revenues, and to recognize these commissions as intangible assets to be amortized over the expected life of such subscribers' guaranteed revenues, in the fourth quarter of 2007.
Operating income for the first quarter 2008 increased 22.2%, reaching NIS 424 million ($119 million), compared to NIS 347 million ($98 million) in the first quarter last year. Operating income reflects, among other things, one-time gains of approximately NIS 19 million, relating mainly to the sale of certain surplus underground pipes for fiber optic cables and the sale of a land plot in Modi'in, Israel.
EBITDA for the first quarter 2008 increased 11%, reaching NIS 593 million ($167 million), compared to NIS 534 million ($150 million) in the first quarter 2007. EBITDA as a percent of revenues, totaled to 37.2%, compared to 37.1% in the first quarter last year.
Finance Expenses, net for the first quarter 2008 totaled NIS 45 million ($13 million), compared to NIS 42 million ($12 million) in the first quarter last year, a 7.1% increase. This increase resulted mainly from an increase in interest and linkage expenses to the Israeli Consumer Price Index (CPI), associated with our debentures, following the increase in our debt level. This was partially offset by an increase in interest income relating to our short term deposits as well as an increase in income from foreign currency differences relating to trade payables balances due to a higher appreciation of the NIS against the US dollar in the first quarter of 2008 compared to the first quarter last year.
Net Income for the first quarter 2008 increased 31.3%, reaching NIS 273 million ($77 million), compared to NIS 208 million ($59 million) in the first quarter last year. Basic earnings per share for the first quarter 2008 totaled NIS 2.80 ($0.79), compared to NIS 2.13 ($0.60) in the first quarter 2007.
Operating Review
New Subscribers - at the end of March 2008 the Company had approximately 3.096 million subscribers. During the first quarter of 2008 the Company added approximately 23,000 net new subscribers (increase of approximately 33,000 post-paid subscribers and a decrease of approximately 10,000 pre-paid subscribers).
In the first quarter of 2008, the Company added approximately 104,000 net new 3G subscribers to its 3G subscriber base, reaching approximately 523,000 3G subscribers at the end of March 2008, representing 16.9% of the Company's total subscriber base.
The Churn Rate in the first quarter 2008 was 5.3%, compared to 3.8% in the first quarter last year. As expected and as experienced in other countries, the implementation of number portability increased the churn in the first quarter of 2008, and primarily consists from lower contribution pre-paid subscribers and subscribers with collection problems. The increase in the churn of pre-paid subscribers had a negligible impact on the Company's results.
Average monthly subscriber Minutes of Use ("MOU") in the first quarter 2008 totaled 351 minutes, compared to 341 minutes in the first quarter 2007, an increase of 2.9%.
The monthly Average Revenue per User (ARPU) for the first quarter 2008 decreased 0.7% and totaled NIS 145 ($40.8), compared to NIS 146 ($41.1) in the first quarter last year.
Financing and Investment Review
Cash Flow
Free cash flow (Cash provided by operating activities, net of cash used in investing activities) for the first quarter of 2008 totaled NIS 78 million ($22 million), compared to NIS 267(3) million ($75 million) generated in the first quarter of 2007. The decrease in Free Cash Flow in the first quarter 2008 resulted mainly from the increase in the Company's expenses for preparation for number portability, which mainly include an increase in payments for handsets procurement and payroll expenses attributed to the increased workforce. The majority of these payments were finalized by the end of the first quarter 2008. At the beginning of the first quarter 2008, the Company also paid a one time catch up tax payment in the amount of NIS 70 million for 2007 accrued tax liability. The Company's stronger financial performance this quarter partially mitigated the impact these three exceptional items had on its Free Cash Flow.
Shareholders' Equity
Shareholders' Equity as of March 31, 2008 amounted to NIS 396 million ($111 million), primarily consisting of accumulated undistributed retained earnings.
Investment in Fixed Assets and Intangible Assets
During the first quarter 2008, the Company invested NIS 116 million ($33 million) in fixed assets and intangible assets (including, among others, deferred commissions and investments in information systems and software), compared to NIS 71 million ($20 million) in the first quarter 2007. The increase mainly relates to the deferral of commissions as of the fourth quarter 2007 and to the different timing of investments over the years compared.
Dividend
On May 14, 2008, the Company's board of directors declared a cash dividend in the amount of NIS 2.65 per share, and in the aggregate amount of approximately NIS 258 million (the equivalent of approximately $0.77 per share and approximately $75 million in the aggregate, based on the representative rate of exchange on May 13, 2008; The actual US$ amount for dividend paid in US$ will be converted from NIS based upon the representative rate of exchange published by the Bank of Israel on June 4, 2008), subject to withholding tax described below. The dividend will be payable to all of the Company's shareholders of record at the end of the trading day in the NYSE on May 27, 2008. The payment date will be June 10, 2008. According to the Israeli tax law, the Company will deduct at source 20% of the dividend amount payable to each shareholder, as aforesaid, subject to applicable exemptions. The dividend per share that the Company will pay for the first quarter of 2008 does not reflect the level of dividends that will be paid for future quarterly periods, which can change at any time in accordance with the Company's dividend policy. Dividend declaration is not 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, 2007 on Form 20-F, under "Item 8 - Financial Information - Dividend Policy".
Financing
Issuance of Debentures
In February 2008, the Company issued, in a private placement, additional debentures for a total principal amount of approximately NIS 574.8 million from its existing series C and D debentures, for a total consideration of approximately NIS 600 million. The debentures were listed for trading on the Tel Aviv Stock Exchange.
For additional details see the Company's annual report for the year ended December 31, 2007 on Form 20-F under "Item 5. Operating and Financial Review and Prospects - B. Liquidity and capital resources - Debt service - Public debentures".
Credit Facility Full Prepayment
In March 2008, the Company voluntarily prepaid the balance of outstanding amounts under its credit facility, in a principal amount of $140 million (comprising of $85 million denominated in US$ and approximately NIS 253 million denominated in NIS), following which, the credit facility was terminated.
For additional details see the Company's annual report for the year ended December 31, 2007 on Form 20-F under "Item 5. Operating and Financial Review and Prospects - B. Liquidity and Capital Resources - Debt Service - Credit facility from bank syndicate".
Other developments subsequent to balance sheet date
Site Licensing - As previously disclosed, the Company has relied upon an exemption from the requirement to obtain building permits in relation to cellular radio access devices. This exemption has been challenged in court and is currently under consideration in the court of appeals. In May 2008, subsequent to the balance sheet date, the Company was informed that the Israeli Attorney General opined that the exemption from the requirement to obtain building permits does apply to cellular radio access devices. The Company was further informed, however, that the General Attorney has also recommended that an inter-ministry committee be established to examine whether further application of the exemption to cellular devices is appropriate in light of changed circumstances since enactment of the exemption, and opined that failure to conclude the examination by the end of the year may effect the legal assessment of the exemption's reasonability.
For additional details see the Company's most recent annual report for the year ended December 31, 2007 on Form 20-F under "Item 3. Key Information - D. Risk Factors - Risks related to our business - We may not be able to obtain permits to construct cell sites" as well as under Item 4. Information on the Company - B. Business Overview - Government Regulations - Permits for Cell site Construction - Site Licensing".
Conference Call Details
The Company will be hosting a conference call on Wednesday, May 14, 2008 at 08:30 am EDT, 03:30 pm Israel time, and 01:30 pm UK 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: 1-888-668-9141
UK Dial-in Number: 0-800-917-5108
Israel Dial-in Number: 03-918-0691
International Dial-in Number: +972-3-918-0691
at: 08:30 am Eastern Time; 05:30 am Pacific Time; 1:30 pm UK Time;
3:30 pm Israel Time
To access the live webcast of the conference call, please access the investor relations section of Cellcom Israel's website: http://investors.ircellcom.co.il/events.cfm. 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 the leading Israeli cellular provider; Cellcom Israel provides its approximately 3.096 million subscribers (as at March 31, 2008) with a broad range of value added services including cellular and landline telephony, roaming services for tourists in Israel and for its subscribers abroad and additional services in the areas of music, video, mobile office etc., based on Cellcom Israel's technologically advanced infrastructure. The Company operates an HSPA 3.5 Generation network enabling the fastest high speed content transmission available in the world, in addition to GSM/GPRS/EDGE and TDMA 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. Through its broad customer service network Cellcom Israel offers its customers technical support, account information, direct to the door parcel services, internet and fax services, dedicated centers for the hearing impaired, etc. In April 2006 Cellcom Israel, through Cellcom Fixed Line Communications L.P., a limited partnership wholly-owned by Cellcom Israel, became the first cellular operator to be granted a special general license for the provision of landline telephone communication services in Israel, in addition to data communication services. 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.ircellcom.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 us, may include projections of our future financial results, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our 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 our license, new legislation or decisions by the regulator affecting our operations, the outcome of legal proceedings to which we are a party, particularly class action lawsuits, our ability to maintain or obtain permits to construct and operate cell sites, and other risks and uncertainties detailed from time to time in our filings with the U.S. Securities and Exchange Commission, including under the caption "Risk Factors" in our Annual Report for the year ended December 31, 2007.
Although we believe the expectations reflected in the forward-looking statements contained herein are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We assume no duty to update any of these forward-looking statements after the date hereof to conform our prior statements to actual results or revised expectations, except as otherwise required by law.
This is the first time the Company prepares its financial statements in accordance with International Financial Reporting Standards (IFRS). Unless noted specifically otherwise, the dollar denominated figures were converted to US$ using a convenience translation based on the US$\New Israeli Shekel (NIS) conversion rate of NIS 3.553 = US$1 as published by the Bank of Israel on March 31, 2008.
Use of non-GAAP financial measures
EBITDA is a non-GAAP measure and is defined as income before financial income (expenses), net; other income (expenses), net; income tax; depreciation and amortization. This is an accepted measure in the communications industry. The Company presents this measure as an additional performance measure as the Company believes that it enables us to compare operating performance between periods and companies, net of any potential differences which may result from differences in capital structure, taxes, age of fixed assets and related depreciation expenses. EBITDA should not be considered in isolation, or as a substitute for operating income, any other performance measures, or cash flow data, which were prepared in accordance with Generally Accepted Accounting Principles as measures of profitability or liquidity. EBITDA does not take into account debt service requirements, or other commitments, including capital expenditures, and therefore, does not necessarily indicate the amounts that may be available for the Company's use. In addition, EBITDA may not be comparable to similarly titled measures reported by other companies, due to differences in the way these measures are calculated. See the reconciliation between the net income and the EBITDA presented at the end of this Press Release.
Free cash flow is a non-GAAP measure and is defined as the net cash provided by operating activities minus the net cash used in investing activities. See the reconciliation note at the end of this Press Release.
Financial Tables Follow
Cellcom Israel Ltd.
(An Israeli Corporation)
Condensed Consolidated Balance Sheets
Convenience
translation
into US
dollar
March 31, March 31, March 31, December
31,
2008 2008 2007 2007
NIS millions US$ millions NIS millions NIS
millions
(Unaudited) (Unaudited) (Unaudited) (Audited)
Current assets
Cash and cash
equivalents 826 232 225 911
Trade
receivables,net 1,438 405 1,274 1,385
Other
receivables,
including
derivatives 125 35 95 96
Inventory 236 67 137 245
Total current
assets 2,625 739 1,731 2,637
Long-term
receivables 579 163 545 575
Property,
plant and
equipment, net 2,265 637 2,430 2,335
Intangible
assets, net 681 192 679 685
Total assets 6,150 1,731 5,385 6,232
Current liabilities
Short-term credit 280 79 121 353
Trade payables and
accrued expenses 709 199 671 953
Current tax liabilities 49 14 145 122
Provisions 91 26 81 91
Other current
including liabilities,
derivatives 341 96 318 384
Dividend declared 700 197 - -
Total current
liabilities 2,170 611 1,336 1,903
Long-term liabilities
Long-term loans from
banks - - 1,076 343
Debentures 3,425 964 1,989 2,983
Provisions 14 4 13 14
Other long term
liabilities 2 1 2 3
Deferred taxes 143 40 152 149
Total non-current
liabilities 3,584 1,009 3,232 3,492
Total liabilities 5,754 1,620 4,568 5,395
Shareholders' equity
Share capital 1 - 1 1
Capital reserves (51) (14) (23) (33)
Retained earnings 446 125 839 869
Total shareholders'
equity 396 111 817 837
Total liabilities and
shareholders' equity 6,150 1,731 5,385 6,232
Cellcom Israel Ltd.
(An Israeli Corporation)
Condensed Consolidated Statements of Income
Three- month period ended Year ended
March 31, December 31,
Convenience
translation
into US
dollar
2008 2008 2007 2007
NIS millions US$ NIS millions NIS millions
millions
(Unaudited) (Unaudited) (Unaudited) (Audited)
Revenues 1,595 449 1,438 6,050
Cost of revenues 879 247 784 3,377
Gross profit 716 202 654 2,673
Selling and
marketing expenses 156 44 149 685
General and
administrative
expenses 154 43 159 653
Other (income)
expenses (18) (5) (1) 3
Operating income 424 120 347 1,332
Financing expenses (107) (30) (55) (287)
Financing income 62 17 13 140
Financing costs, (45) (13) (42) (147)
net
Income before 379 107 305 1,185
income tax
Income tax 106 30 97 310
Net income 273 77 208 875
Earnings per share
Basic earnings per
share (in NIS) 2.80 0.79 2.13 8.97
Diluted earnings
per share (in NIS) 2.76 0.78 2.13 8.89
Weighted average
number of shares
used in the
calculation of
basic earnings per
share (in thousands) 97,505 97,505 97,500 97,500
Weighted average
number of shares
used in the
calculation of
diluted earnings
per share (in
thousands) 98,887 98,887 97,500 98,441
Cellcom Israel Ltd.
(An Israeli Corporation)
Condensed Consolidated Statements of Cash Flows
Three-month period ended Year
ended
December
March 31, 31,
Convenience
translation
into US
dollar
2008 2008 2007 2007
US$ NIS
NIS millions millions NIS millions millions
(Unaudited) (Unaudited) (Unaudited) (Audited)
Cash flow from operating
activities
Net income for the period 273 77 208 875
Adjustments to reconcile
net income to funds
generated from operations:
Depreciation and
amortization 187 52 188 775
Reversal of provision
allowance - - - (10)
Loss (Gain) from sale of
assets (18) (5) 1 4
Income tax expenses 06 30 97 310
Financial costs, net 45 13 42 147
Equity setteled share
based payments transaction 4 1 11 29
Changes in operating
assets and liabilities:
Changes in inventories 9 3 (6) (114)
Changes in trade
receivables (including
long-term amounts) (87) (25) (19) (99)
Changes in other
receivables and debits
(including long-term
amounts) (9) (3) (21) (24)
Changes in trade payables
(including long-term
amounts) (177) (50) (16) 188
Changes in other payables
and credits (including
long-term amounts) 18 5 24 30
Income tax paid (161) (45) (69) (313)
Net cash provided by
operating activities 190 53 440 1,798
Cash flows from investing
activities
Acquisition of property,
plant, and equipment (118) (33) (153) (466)
Acquisition of intangible
assets (54) (15) (22) (97)
Proceeds from sales of
assets 50 14 1 4
Interest received from
investments 10 3 1 23
Investment in long-term
deposit - - - (12)
Net cash provided by
investing activities (112) (31) (173) (548)
Cellcom Israel Ltd.
(An Israeli Corporation)
Condensed Consolidated Statements of Cash Flows (cont'd)
Three-month period ended Year
ended
December
March 31, 31,
Convenience
translation
into US
dollar
2008 2008 2007 2007
NIS US$ NIS NIS
millions millions millions millions
(Unaudited) (Unaudited) (Unaudited) (Audited)
Cash flows from financing
activities
Payment of long-term loans
from banks (648) (182) - (645)
Proceeds from issuance of
debentures, net 589 166 - 1,066
Cash dividend paid (16) (5) - (639)
Interest paid (88) (25) (98) (177)
Net cash provided by
financing activities (163) (46) (98) (395)
Changes in cash and cash
equivalents (85) (24) 169 855
Balance of cash and cash
equivalents at beginning of
the period 911 256 56 56
Balance of cash and cash
equivalents at end of
the period 826 232 225 911
Appendix - Non-cash investing and financing activities
Three-month period ended Year ended
March 31, December 31,
Convenience
translation
into US
dollar
2008 2008 2007 2007
NIS US$
millions millions NIS millions NIS millions
(Unaudited) (Unaudited) (Unaudited) (Audited)
Acquisition of
property, plant and
equipment and
intangible assets
on credit 87 25 54 216
Tax withheld
regarding cash
dividend - - - 16
Cellcom Israel Ltd.
(An Israeli Corporation)
Reconciliation for Non-GAAP Measures
EBITDA
The following is a reconciliation of net income to EBITDA:
Year
ended
Three-month period ended December 31,
March 31,
Convenience translation
into US dollar
2008 2008 2007 2007
NIS US$ NIS NIS
millions millions millions millions
(Unaudited) (Unaudited) (Unaudited) (Audited)
Net income............. 273 77 208 875
Income taxes........... 106 30 97 310
Financing income....... (62) (17) (13) (140)
Financing expenses..... 107 30 55 287
Other expenses (income) (18) (5) (1) 3
Depreciation and
amortization.......... 187 52 188 775
EBITDA................ 593 167 534 2,110
Free Cash Flow
The following table shows the calculation of free cash flow:
Year
ended
Three-month period ended December 31,
March 31,
Convenience translation
into US dollar
2008 2008 2007 2007
NIS US$ NIS NIS
millions millions millions millions
(Unaudited) (Unaudited) (Unaudited) (Audited)
Cash flows from
operating activities.......190 53 * 440 * 1,798
Cash flows from
investing activities......(112) (31) * (173) * (548)
Free Cash Flow............. 78 22 267 1,250
* Restated due to the new presentation of Statements of Cash Flows in accordance with International Financial Reporting Standards (IFRS), following the Company's adoption of IFRS as of January 1, 2008.
(1) Please view "Use of Non-GAAP financial measures" section at the end of this press release.
(2) In order to estimate the Company's market share, the Company was required to estimate the number of subscribers of two additional Israeli cellular operators - Pelephone Communications Ltd. ("Pelephone") and Mirs Communications Ltd. ("Mirs"), as at March 31, 2008, since Pelephone has not yet published this information, and Mirs does not publish this information
(3) Restated due to the new presentation of Statements of Cash Flows in accordance with International Financial Reporting Standards (IFRS), following the Company's adoption of IFRS as of January 1, 2008.
Company Contact Investor Relations Contact
Shiri Israeli Ehud Helft / Ed Job
Investor Relations Coordinator CCGK Investor Relations
investors@cellcom.co.il ehud@gkir.com / ed.job@ccgir.com
Tel: +972-52-998-9755 Tel: (US) +1-866-704-6710 /
+1-646-213-1914
Cellcom Israel Ltd.
CONTACT: Company Contact: Shiri Israeli, Investor RelationsCoordinator, investors@cellcom.co.il, Tel: +972-52-998-9755; InvestorRelations Contact: Ehud Helft / Ed Job, CCGK Investor Relations,ehud@gkir.com / ed.job@ccgir.com, Tel: (US) +1-866-704-6710 / +1-646-213-1914
[ Back To TMCnet.com's Homepage ]
|
Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, September 16-18, 2008. Los Angeles, California.
