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. (NYSE: CEL; TASE: CEL) ("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
SOURCE Cellcom Israel Ltd.
 back to top
CONTACT:
Company Contact: Shiri Israeli, Investor
Relations Coordinator, investors@cellcom.co.il, Tel:
+972-52-998-9755; Investor Relations 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
|
