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Cellcom Israel Announces Fourth Quarter and Full Year 2016 Results

Cellcom Israel concludes 2016 with net income of NIS 150 million and EBITDA1 of NIS 858 million.Nir Sztern, Cellcom CEO said: "The Company continues its successful activity in the fixed-line mark... (March 15, 2017)

NETANYA, Israel, March 15, 2017 /PRNewswire/ --

2016 Full Year Highlights (compared to 2015):

  • Total Revenues totaled NIS 4,027 million ($1,047 million) compared to NIS 4,180 million ($1,087 million) last year, a decrease of 3.7%
  • Service revenues totaled NIS 3,033 million ($789 million) compared to NIS 3,132 million ($815 million) last year, a decrease of 3.2%
  • EBITDA1 totaled NIS 858 million ($223 million) compared to NIS 872 million2 ($227 million) last year, a decrease of 1.6%
  • EBITDA margin 21.3%, an increase from 20.9% last year.
  • Operating income totaled NIS 310 million ($80 million) similar to last year.
  • Net income totaled NIS 150 million ($39 million) compared to NIS 97 million ($25 million) last year, an increase of 54.6%
  • Free cash flow1 totaled NIS 416 million ($108 million) compared to NIS 494 million ($128 million) last year, a decrease of 15.8%
  • Cellular subscriber base totaled approximately 2.801 million subscribers (at the end of December 2016)

[1]


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

[2]

EBITDA for 2015 includes a one-time expense in the amount of approximately NIS 30 million as a result of entering a collective employment agreement.

Fourth Quarter 2016 Highlights (compared to fourth quarter of 2015):

  • Total Revenues totaled NIS 984 million ($256 million) compared to NIS 1,046 million ($272 million) in the fourth quarter last year, a decrease of 5.9%
  • Service revenues totaled NIS 719 million ($187 million) compared to NIS 757 million ($197 million) in the fourth quarter last year, a decrease of 5.0%
  • EBITDA1 totaled NIS 173 million ($45 million) compared to NIS 225 million ($59 million) in the fourth quarter last year, a decrease of 23.1%
  • EBITDA margin 17.6%, a decrease from 21.5% in the fourth quarter last year.
  • Operating income totaled NIS 32 million ($8 million) compared to NIS 79 million ($21 million) in the fourth quarter last year, a decrease of 59.5%
  • Net income totaled NIS 14 million ($4 million) compared to NIS 19 million ($5 million) in the fourth quarter last year, a decrease of 26.3%
  • Free cash flow1 totaled NIS 83 million ($22 million) compared to NIS 121 million ($31 million) in the fourth quarter last year, a decrease of 31.4%

Nir Sztern, the Company's Chief Executive Officer, referred to the results of the full year and fourth quarter:

"Throughout 2016, we continued to be affected by the intensity of the competition in the cellular market while strengthening our position as a communications group. This is a year in which the Group's strategy of intensifying our activity as a communications group bore significant fruit.

The Cellcom tv success continues and expands, and there is no doubt that we offer an alternative to the Israeli consumer and generate competition in the market. To date, approximately 122,000 households have subscribed to Cellcom tv services, enjoying an advanced TV experience.

We continue to work actively in the landline market and to date, more than 180,000 households have subscribed to our internet infrastructure services. This achievement is even more impressive in light of the many challenges posed by the implementation of the reform in this market. We achieved all this alongside continuous successful landline solutions to business customers, offering IPVPN communications solutions, business continuity services, landline transmission services and PRI lines, data security services, fixed-line telephony services, cloud storage solutions and IOT services.

Signing the network sharing agreements with Electra Consumer Products and Xfone 018, will ensure revenues while reducing investment to the Group over the coming decade, with an ability to offer advanced high quality cellular services thanks to the amount of frequencies the shared network shall have. We are happy to have received the requisite approval from the Antitrust Commissioner and are awaiting the Ministry of Communications' approval and the completion of the transactions in order to move forward.

We were able to achieve the results of our strategy as a communications group, providing added value to the customer, thanks to the trust of our shareholders and thanks to the excellent employees and managers of the Group, in their daily uncompromising work in providing quality service to the Company's customers."

Shlomi Fruhling, Chief Financial Officer, said:

"2016 was characterized by growth in the fixed-line segment as well as continuous competition in the cellular segment, which was reflected by an erosion of service revenues compared to last year.

The service revenues in the cellular segment decreased by 4.9% compared to last year and were mainly affected by the intense competition during the year, though compared to previous years we are seeing a reduction in the level of erosion. The erosion was partially offset by an increase in revenues from national roaming services. The contribution of the cellular segment to EBITDA increased by 4.0% compared to last year, due to efficiency measures implemented by the Company.

We continued to grow in the fixed-line segment due to the ongoing recruitment of customers to Cellcom tv, to the landline wholesale market and for triple-play services. The increase in revenues from the Internet and TV fields was partially offset by a decrease in revenues from long distance calling services.

The Group continued to reduce its operating expenses. In 2016, the selling, marketing, general and administrative expenses of the Group decreased by approximately 8.4% compared to last year.

During 2016, the Company completed a debt offering through the issuance of two new series of debentures in Israel totaling approximately NIS 400 million with an average duration of 6.7 years. In addition, the Company completed a debt offering through a private placement of additional Series I debentures, for a total consideration of NIS 250 million. The debt offerings saw high demand, indicating a continued vote of confidence by investors in the Company.

The free cash flow for 2016 totaled NIS 416 million, a 15.8% decrease compared to NIS 494 million in 2015. The decrease in free cash flow was mainly due to a decrease in receipts from customers for services and end user equipment.

The Company's Board of Directors decided not to distribute a dividend for the fourth quarter of 2016, given the ongoing competition in the market and its effect on the Company's operating results and in order to further strengthen the Company's balance sheet. The Board of Directors will re-evaluate its decision as market conditions develop, while taking into consideration the Company's needs."

Cellcom Israel Ltd. (NYSE: CEL; TASE: CEL) ("Cellcom Israel" or the "Company" or the "Group") announced today its financial results for the fourth quarter and full year ended December 31, 2016.

The Company reported that revenues for the fourth quarter and full year 2016 totaled NIS 984 million ($256 million) and NIS 4,027 million ($1,047 million), respectively; EBITDA for the fourth quarter 2016 totaled NIS 173 million ($45 million), or 17.6% of total revenues, and for the full year 2016 totaled NIS 858 million ($223 million), or 21.3% of total revenues; net income for the fourth quarter and full year 2016 totaled NIS 14 million ($4 million) and NIS 150 million ($39 million), respectively. Basic earnings per share for the fourth quarter and full year 2016 totaled NIS 0.12 ($0.03) and NIS 1.47 ($0.38), respectively.

Main Consolidated Financial Results:


NIS millions

% of Revenues

% Change

US$ millions  
(convenience
translation)


2016

2015

2016

2015

2016

2015

Revenues - services

3,033

3,132

75.3%

74.9%

(3.2%)

789

815

Revenues - equipment

994

1,048

24.7%

25.1%

(5.2%)

258

272

Total revenues

4,027

4,180

100.0%

100.0%

(3.7%)

1,047

1,087

Cost of revenues - services

(2,028)

(2,000)

(50.4%)

(47.8%)

1.4%

(527)

(520)

Cost of revenues - equipment

(674)

(763)

(16.7%)

(18.3%)

(11.7%)

(176)

(199)

Total cost of revenues

(2,702)

(2,763)

(67.1%)

(66.1%)

(2.2%)

(703)

(719)

Gross profit

1,325

1,417

32.9%

33.9%

(6.5%)

344

368

Selling and marketing expenses

(574)

(620)

(14.3%)

(14.8%)

(7.4%)

(149)

(161)

General and administrative expenses

(420)

(465)

(10.4%)

(11.1%)

(9.7%)

(109)

(121)

Other expenses, net

(21)

(22)

(0.5%)

(0.5%)

(4.5%)

(6)

(6)

Operating income

310

310

7.7%

7.4%

0.0%

80

80

Financing expenses, net

(150)

(177)

(3.7%)

(4.2%)

(15.3%)

(39)

(46)

Profit before taxes on income 

160

133

4.0%

3.2%

20.3%

41

34

Taxes on income

(10)

(36)

(0.2%)

(0.9%)

(72.2%)

(2)

(9)

Net income

150

97

3.7%

2.3%

54.6%

39

25

Free cash flow

416

494

10.3%

11.8%

(15.8%)

108

128

EBITDA

858

872

21.3%

20.9%

(1.6%)

223

227

 

 


Q4/2016

Q4/2015

Change%

Q4/2016

Q4/2015


NIS million

US$ million

 (convenience translation)

Total revenues

984

1,046

(5.9%)

256

272

Operating Income

32

79

(59.5%)

8

21

Net Income

14

19

(26.3%)

4

5

Free cash flow

83

121

(31.4%)

22

31

EBITDA

173

225

(23.1%)

45

59

EBITDA, as percent of total revenues

17.6%

21.5%

(18.1%)



 

Main Financial Data by Operating Segments:

Starting from the first quarter of 2016, the Company presents its operations in two segments, "Cellular" segment and "Fixed-line" segment. These segments are managed separately for allocating resources and assessing performance purposes. The Company adjusted its operating segments reporting for prior periods on a retroactive basis, therefore the segment reporting for those periods reflect the new reporting format.

  • Cellular Segment - the segment includes the cellular communications services, end user cellular equipment and supplemental services.
  • Fixed-line segment - the segment includes landline telephony services, internet infrastructure and connectivity services, television services, end user fixed-line equipment and supplemental services.

 


Cellular (*)

 

Fixed-line (**)

 

Consolidation
adjustments

(***)

Consolidated results

 

NIS million

2016

2015

Change

%

2016

2015

Change

%

2016

2015

2016

2015

Change

%

Total revenues

2,998

3,203

(6.4%)

1,229

1,181

4.1%

(200)

(204)

4,027

4,180

(3.7%)

Service revenues

2,162

2,273

(4.9%)

1,071

1,063

0.8%

(200)

(204)

3,033

3,132

(3.2%)

Equipment revenues

836

930

(10.1%)

158

118

33.9%

-

-

994

1,048

(5.2%)

EBITDA

625

601

4.0%

233

271

(14.0%)

-

-

858

872

(1.6%)

EBITDA, as percent of total revenues

20.8%

18.8%

10.6%

19.0%

22.9%

(17.0%)



21.3%

20.9%

1.9%

 

 


Cellular (*)

Fixed-line (**)

Consolidation
adjustments

(***)

Consolidated results

NIS million

Q4'16

Q4'15

Change

%

Q4'16

Q4'15

Change

%

Q4'16

Q4'15

Q4'16

Q4'15

Change

%

Total revenues

707

779

(9.2%)

327

319

2.5%

(50)

(52)

984

1,046

(5.9%)

Service revenues

502

546

(8.1%)

267

263

1.5%

(50)

(52)

719

757

(5.0%)

Equipment revenues

205

233

(12.0%)

60

56

7.1%

-

-

265

289

(8.3%)

EBITDA

117

154

(24.0%)

56

71

(21.1%)

-

-

173

225

(23.1%)

EBITDA, as percent of total revenues

16.5%

19.8%

(16.7%)

17.1%

22.3%

(23.3%)



17.6%

21.5%

(18.1%)

 

(*)

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

(**)

The segment includes landline telephony services, internet infrastructure and connectivity services, television services, end user fixed-line equipment and supplemental services.

(***)

Include cancellation of inter-segment revenues between "Cellular" and "Fixed-line" segments.

 

Financial Review (2016 full year compared to 2015):

Revenues for 2016 decreased 3.7% totaling NIS 4,027 million ($1,047 million), compared to NIS 4,180 million ($1,087 million) last year. The decrease in revenues is attributed to a 3.2% decrease in service revenues and a 5.2% decrease in equipment revenues.

Service revenues for 2016 totaled NIS 3,033 million ($789 million), a 3.2% decrease from NIS 3,132 million ($815 million) last year.

Service revenues in the cellular segment totaled NIS 2,162 million ($562 million) in 2016, a 4.9% decrease from NIS 2,273 million ($591 million) last year. This decrease resulted mainly from a decrease in cellular services revenues due to the ongoing erosion in the price of these services and churn of customers as a result of the competition in the cellular market. This decrease was partially offset by an increase in revenues from national roaming services.

Service revenues in the fixed-line segment totaled NIS 1,071 million ($279 million) in 2016, a 0.8% increase from NIS 1,063 million ($276 million) last year. This increase resulted mainly from an increase in revenues from the Internet and TV fields. Such increase was partially offset by a decrease in revenues from long distance calling services.

Equipment revenues totaled NIS 994 million ($258 million) in 2016, a 5.2% decrease compared to NIS 1,048 million ($272 million) last year. This decrease resulted mainly from a decrease in the quantity of end user equipment sold during 2016 in the cellular segment as compared to 2015. This decrease was partially offset by an increase in equipment sales in the fixed-line segment.

Cost of revenues totaled NIS 2,702 million ($703 million) in 2016, compared to NIS 2,763 million ($719 million) in 2015, a 2.2% decrease. This decrease resulted mainly from a decrease in costs of end user equipment sold, primarily as a result of a decrease in the quantity of end user equipment sold in cellular segment during 2016 as compared to 2015, which was partially offset by an increase in content costs related to the TV field and in costs related to the landline wholesale market.

Gross profit for 2016 decreased 6.5% to NIS 1,325 million ($344 million), compared to NIS 1,417 million ($368 million) in 2015. Gross profit margin for 2016 amounted to 32.9%, down from 33.9% in 2015.

Selling, Marketing, General and Administrative Expenses ("SG&A Expenses") for 2016 decreased 8.4% to NIS 994 million ($258 million), compared to NIS 1,085 million ($282 million) in 2015. This decrease is primarily a result of efficiency measures implemented by the Company, a one-time expense as a result of entering a collective employment agreement in 2015, and a decrease in depreciation and amortization expenses.

Other expenses for 2016 totaled NIS 21 million ($6 million), compared to other expenses of NIS 22 million ($6 million) in 2015. Other expenses for 2016 primarily include an expense for a new employee voluntary retirement plan in the amount of approximately NIS 13 million ($3 million), compared to an expense for the previous employee voluntary retirement plan in the amount of approximately NIS 25 million ($7 million) in 2015.

Operating income for 2016 is similar to 2015, NIS 310 million ($80 million). The decrease in the  revenues was fully offset by a decrease in cost of revenues and Selling, Marketing, General and Administrative Expenses.

EBITDA for 2016 decreased by 1.6% totaling NIS 858 million ($223 million) compared to NIS 872 million ($227 million) in 2015. EBITDA for 2016, as a percent of revenues, totaled 21.3% up from 20.9% in 2015. The decrease in the EBITDA resulted mainly from the ongoing erosion in service revenues. The decrease was partially offset by a decrease in operating expenses, mainly as a result of efficiency measures implemented by the Company and from a one-time expense in 2015 as a result of entering a collective employment agreement. 

Cellular segment EBITDA for 2016 totaled NIS 625 million ($163 million), compared to NIS 601 million ($156 million) last year, an increase of 4.0%, resulted mainly from a decrease in operating expenses, mainly as a result of efficiency measures implemented by the Company and from an increase in revenues from national roaming. Fixed-line segment EBITDA for 2016 totaled NIS 233 million ($61 million), compared to NIS 271 ($70 million) last year, a 14.0% decrease resulted mainly from an erosion in long distance calling services revenues and an erosion in the internet field profitability.

Financing expenses, net for 2016 decreased 15.3% and totaled NIS 150 million ($39 million), compared to NIS 177 million ($46 million) in 2015. The decrease mainly resulted from a decrease in interest expenses, associated with the Company's debentures, due to a lower debt level in 2016 compared to 2015.

Taxes on income for 2016 totaled NIS 10 million ($2 million) of tax expenses, compared to NIS 36 million ($9 million) tax expenses in 2015. The decrease resulted mainly from recording of tax income, as a result of a tax assessment agreement for the years 2012-2013 and a decrease in corporate tax rate for the following years.

Net Income for 2016 totaled NIS 150 million ($39 million), compared to NIS 97 million ($25 million) in 2015, a 54.6% increase.

Basic earnings per share for 2016 totaled NIS 1.47 ($0.38), compared to NIS 0.95 ($0.25) last year.

Financial Review (fourth quarter of 2016 compared to fourth quarter of 2015):

Revenues for the fourth quarter of 2016 decreased 5.9% totaling NIS 984 million ($256 million), compared to NIS 1,046 million ($272 million) in the fourth quarter last year. The decrease in revenues is attributed to a 5.0% decrease in service revenues and an 8.3% decrease in equipment revenues.

Service revenues totaled NIS 719 million ($187 million) in the fourth quarter of 2016, a 5.0% decrease from NIS 757 million ($197 million) in the fourth quarter last year.

Service revenues in the cellular segment totaled NIS 502 million ($131 million) in the fourth quarter of 2016, an 8.1% decrease from NIS 546 million ($142 million) in the fourth quarter last year. This decrease resulted mainly from a decrease in cellular services revenues due to the ongoing erosion in the price of these services and churn of customers as a result of the competition in the cellular market.

Service revenues in the fixed-line segment totaled NIS 267 million ($69 million) in the fourth quarter of 2016, a 1.5% increase from NIS 263 million ($68 million) in the fourth quarter last year. This increase resulted mainly from an increase in revenues from the Internet and TV fields. Such increase was fully offset by a decrease in revenues from long distance calling services.

Equipment revenues in the fourth quarter of 2016 totaled NIS 265 million ($69 million), an 8.3% decrease compared to NIS 289 million ($75 million) in the fourth quarter last year. This decrease resulted mainly from a decrease in the amount of end user equipment sold in the cellular segment during the fourth quarter of 2016 as compared to the fourth quarter of 2015. This decrease was partially offset by an increase in equipment sales in the fixed-line segment.

Cost of revenues for the fourth quarter of 2016 totaled NIS 697 million ($181 million), compared to NIS 688 million ($179 million) in the fourth quarter of 2015, a 1.3% increase. This increase resulted mainly from an increase in content costs related to the TV field and in costs related to the landline wholesale market field which was partially offset by a decrease in the costs of end user equipment sold, primarily as a result of a decrease in the quantity of end user equipment sold in the cellular segment during the fourth quarter of 2016 as compared to the fourth quarter of 2015.

Gross profit for the fourth quarter of 2016 decreased 19.8% to NIS 287 million ($75 million), compared to NIS 358 million ($93 million) in the fourth quarter of 2015. Gross profit margin for the fourth quarter of 2016 amounted to 29.2%, down from 34.2% in the fourth quarter of 2015.

Selling, Marketing, General and Administrative Expenses ("SG&A Expenses") for the fourth quarter of 2016 decreased 9.4% to NIS 251 million ($65 million), compared to NIS 277 million ($72 million) in the fourth quarter of 2015. This decrease is primarily a result of a decrease in depreciation and amortization expenses and efficiency measures implemented by the Company.

Operating income for the fourth quarter of 2016 decreased by 59.5% to NIS 32 million ($8 million) from NIS 79 million ($21 million) in the fourth quarter of 2015. The decrease in the operating income resulted from a decrease in revenues primarily due to the ongoing erosion in service revenues.

EBITDA for the fourth quarter of 2016 decreased by 23.1% totaling NIS 173 million ($45 million) compared to NIS 225 million ($59 million) in the fourth quarter of 2015. EBITDA as a percent of revenues for the fourth quarter of 2016 totaled 17.6%, down from 21.5% in the fourth quarter of 2015. The decrease in the EBITDA resulted mainly from the ongoing erosion in service revenues and an increase of a provision for claims recorded in the fourth quarter of 2016. The decrease was partially offset by a decrease in operating expenses, mainly as a result of efficiency measures implemented by the Company.

Cellular segment EBITDA for the fourth quarter of 2016 totaled NIS 117 million ($30 million), compared to NIS 154 million ($40 million) in the fourth quarter last year, a decrease of 24.0%, resulted mainly from a decrease in service revenues as mentioned above. Fixed-line segment EBITDA for the fourth quarter of 2016  totaled NIS 56 million ($15 million), compared to NIS 71 million ($18 million) in the fourth quarter last year, a 21.1% decrease, mainly as a result of an erosion in long distance calling services revenues and an erosion in the internet field profitability.

Financing expenses, net for the fourth quarter of 2016 decreased 16.7% and totaled NIS 40 million ($10 million), compared to NIS 48 million ($12 million) in the fourth quarter of 2015. The decrease resulted mainly from hedging transactions losses in the fourth quarter of 2015 regarding the Israeli Consumer Price Index, associated with the Company's debentures.

Taxes on income for the fourth quarter of 2016 totaled NIS 22 million ($6 million) of tax income, compared to NIS 12 million ($3 million) of tax expenses in the fourth quarter of 2015. The decrease resulted mainly from tax income which was recorded in this quarter as a result of a decrease in corporate tax rate for the following years.

Net Income for the fourth quarter of 2016 totaled NIS 14 million ($4 million), compared to NIS 19 million ($5 million) in the fourth quarter of 2015, a 26.3% decrease.

Basic earnings per share for the fourth quarter of 2016 totaled NIS 0.12 ($0.03), compared to NIS 0.18 ($0.05) in the fourth quarter last year.

Operating Review

Main Performance Indicators - Cellular segment:


2016

2015

Change (%)

Cellular subscribers at the end of period (in thousands)

2,801

2,835

(1.2%)

Churn Rate for cellular subscribers (in %)

42.4%

42.0%

1.0%

Monthly cellular ARPU (in NIS)

63.3

65.0

(2.6%)


Q4/2016

Q4/2015

Change (%)

Churn Rate for cellular subscribers (in %)

10.4%

11.1%

(6.3%)

Monthly cellular ARPU (in NIS)

59.3

63.0

(5.9%)

 

Cellular subscriber base - at the end of 2016 the Company had approximately 2.801 million cellular subscribers, a decrease of approximately 34,000 subscribers net, or approximately 1.2%, compared to the cellular subscriber base at the end of 2015. In the fourth quarter of 2016, the Company's cellular subscriber base decreased by approximately 21,000 net cellular subscribers.

Cellular Churn Rate for 2016 totaled 42.4%, compared to 42.0% in 2015. The cellular churn rate for the fourth quarter 2016 totaled to 10.4%, compared to 11.1% in the fourth quarter last year.

The monthly cellular Average Revenue per User ("ARPU") for 2016 totaled NIS 63.3 ($16.5) compared to NIS 65.0 ($16.9) in 2015. ARPU for the fourth quarter of 2016 totaled NIS 59.3 ($15.4), compared to NIS 63.0 ($16.4) in the fourth quarter last year. The decrease in ARPU resulted, among others, from the ongoing erosion in the prices of cellular services, resulting from the intense competition in the cellular market.

Main Performance Indicators - Fixed-line segment:


2016

2015

Change (%)

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

163

95

71.6%

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

111

63

76.2%

 

In the fourth quarter of 2016, the Company's households base in respect of internet infrastructure field and TV field had increased by approximately 17,000 net households and 12,000 net households, respectively.

Financing and Investment Review

Cash Flow

Free cash flow for 2016 totaled NIS 416 million ($108 million), compared to NIS 494 million ($128 million) in 2015, a 15.8% decrease. Free cash flow for the fourth quarter of 2016 totaled NIS 83 million ($22 million), compared to NIS 121 million ($31 million) in the fourth quarter of 2015, a 31.4% decrease. The decrease in free cash flow, both annual and quarterly, resulted mainly from a decrease in receipts from customers for services and end user equipment.

Total Equity

Total Equity as of December 31, 2016 amounted to NIS 1,340 million ($349 million) primarily consisting of undistributed accumulated retained earnings of the Company.

Cash Capital Expenditures in Fixed Assets and Intangible Assets

During 2016 and the fourth quarter of 2016, the Company invested NIS 368 million ($96 million) and NIS 96 million ($25 million), respectively in fixed assets and intangible assets (including, among others, investments in the Company's communications networks, information systems, software and TV set-top boxes), compared to NIS 396 million ($103 million) and NIS 89 million ($23 million) in 2015 and the fourth quarter 2015, respectively.

Dividend

On March 14, 2017, the Company's Board of Directors decided not to declare a cash dividend for the fourth quarter of 2016. 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, 2015 on Form 20-F dated March 21, 2016, under "Item 8 - Financial Information A. Consolidated Statements and Other Financial Information - Dividend Policy".

Debentures

For information regarding the Company's summary of financial liabilities and details regarding the Company's outstanding debentures as of December 31, 2016, see "Disclosure for Debenture Holders" section in this press release.

Loans from Financial Institutions

Pursuant to a loan agreement entered by the Company and two financial institutions in May 2015, in June 2016 the first loan under the agreement in a principal amount of NIS 200 million was provided to the Company. Pursuant to a loan agreement between the Company and an Israeli bank from August 2015, in December 2016 a loan in the amount of NIS 140 million was provided to the Company. For details regarding the fulfillment of financial covenants included in the loan agreements, which are identical to those included in the Company's Debentures Series F through K, see comment no.1 to the table of "Aggregation of the information regarding the debenture series issued by the Company" under "Disclosure for Debenture Holders" section in this press release. For additional details regarding the loans see the Company's recent annual report for the year ended December 31, 2015 on Form 20-F, filed on March 21, 2016, under "Item 5B. Liquidity and Capital Resources Other Credit Facilities".

Conference Call Details

The Company will be hosting a conference call regarding its results for the year 2016 and for the fourth quarter of 2016 on Wednesday, March 15, 2017 at 10:00 am ET, 07:00 am PT, 14:00 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: 1 888 668 9141
UK Dial-in Number: 0 800 917 5108
Israel Dial-in Number: 03 918 0609
International Dial-in Number: +972 3 918 0609

at: 10:00 am Eastern Time; 07:00 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 the largest Israeli cellular provider; Cellcom Israel provides its approximately 2.801 million cellular subscribers (as at December 31, 2016) with a broad range of value added services including cellular 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 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. Through its broad customer service network Cellcom Israel offers technical support, account information, direct to the door parcel delivery services, internet and fax services, dedicated centers for hearing impaired, etc. Cellcom Israel further provides OTT TV services (as of December 2014), internet infrastructure (as of February 2015) and connectivity services and international calling services, as well as landline telephone communications services in Israel, in addition to data communications 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.cellcom.co.il.

Forward-Looking Statements

The following information contains, or may be deemed to contain forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995 and the Israeli Securities Law, 1968). In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about the Company, may include projections of the Company's future financial results, its anticipated growth strategies and anticipated trends in its business. These statements are only predictions based on the Company's current expectations and projections about future events. There are important factors that could cause the Company's actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause such differences include, but are not limited to: changes to the terms of the Company's license, new legislation or decisions by the regulator affecting the Company's operations, new competition and changes in the competitive environment, the outcome of legal proceedings to which the Company is a party, particularly class action lawsuits, the Company's ability to maintain or obtain permits to construct and operate cell sites, and other risks and uncertainties detailed from time to time in the Company's filings with the U.S. Securities and Exchange Commission, including under the caption "Risk Factors" in its Annual Report for the year ended December 31, 2015. 

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 3.845 = US$ 1 as published by the Bank of Israel for December 31, 2016.

Use of non-IFRS financial measures

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); 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. 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 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 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), 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.

 

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

 

 

Financial Tables Follow

 

Cellcom Israel Ltd.

(An Israeli Corporation)


Consolidated Statements of Financial Position














Convenience







 translation into 







US dollar



December 31,


December 31,


December 31,



2015


2016


2016



NIS millions


NIS millions


US$ millions








Assets







Cash and cash equivalents


761


1,240


322

Current investments, including derivatives


281


284


74

Trade receivables


1,254


1,325


345

Current tax assets


-


25


6

Other receivables


104


61


16

Inventory


85


64


17








Total current assets


2,485


2,999


780








Trade and other receivables


785


796


207

Property, plant and equipment, net


1,745


1,659


432

Intangible assets, net


1,254


1,207


314

Deferred tax assets


9


1


-








Total non- current assets


3,793


3,663


953








Total assets


6,278


6,662


1,733








Liabilities







Current maturities of debentures 


734


863


224

Trade payables and accrued expenses


677


675


176

Current tax liabilities


53


-


-

Provisions


110


108


28

Other payables, including derivatives


286


279


73








Total current liabilities


1,860


1,925


501








Long-term loans from financial institutions


-


340


88

Debentures


3,054


2,866


745

Provisions


20


30


8

Other long-term liabilities


24


31


8

Liability for employee rights upon retirement, net


12


12


3

Deferred tax liabilities


123


118


31








Total non- current liabilities


3,233


3,397


883








Total liabilities


5,093


5,322


1,384








Equity attributable to owners of the Company







Share capital


1


1


-

Cash flow hedge reserve


(2)


(1)


-

Retained earnings


1,170


1,322


344








Non-controlling interests


16


18


5








Total equity


1,185


1,340


349








Total liabilities and equity


6,278


6,662


1,733

 

 

 

Cellcom Israel Ltd.

(An Israeli Corporation)


Consolidated Statements of Income


















Convenience









 translation into 









 US dollar



Year ended


Year ended


Year ended


Year ended



December 31,


December 31,


December 31,


 December 31,



2014


2015


2016


2016



NIS millions


NIS millions


NIS millions


US$ millions










Revenues


4,570


4,180


4,027


1,047

Cost of revenues


(2,727)


(2,763)


(2,702)


(703)










Gross profit


1,843


1,417


1,325


344










Selling and marketing expenses


(672)


(620)


(574)


(149)

General and administrative expenses


(463)


(465)


(420)


(109)

Other expenses, net


(46)


(22)


(21)


(6)










Operating profit


662


310


310


80










Financing income


100


55


46


12

Financing expenses


(298)


(232)


(196)


(51)

Financing expenses, net


(198)


(177)


(150)


(39)










Profit before taxes on income


464


133


160


41










Taxes on income


(110)


(36)


(10)


(2)

Profit for the year


354


97


150


39

Attributable to:









Owners of the Company


351


95


148


39

Non-controlling interests


3


2


2


-

Profit for the year


354


97


150


39










Earnings per share









Basic earnings per share (in NIS)


3.51


0.95


1.47


0.38










Diluted earnings per share (in NIS)


3.48


0.95


1.47


0.38










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


99,924,306


100,589,458


100,604,578


100,604,578










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


100,706,282


100,589,530


100,698,306


100,698,306

 

 

 

Cellcom Israel Ltd.

(An Israeli Corporation)









Consolidated Statements of Cash Flows
















Convenience








 translation into








 US dollar


Year ended


Year ended


Year ended


Year ended


December 31,


December 31,


December 31,


 December 31,


2014


2015


2016


2016


NIS millions


NIS millions


NIS millions


US$ millions

Cash flows from operating activities








Profit for the year

354


97


150


39

Adjustments for: 








Depreciation and amortization

610


562


534


139

Share based payment

3


3


6


2

Loss (gain) on sale of property, plant and equipment

7


(1)


10


3

Income tax expense

110


36


10


2

Financing expenses, net

198


177


150


39









Changes in operating assets and liabilities:








Change in inventory

(5)


4


21


5

Change in trade receivables (including long-term amounts)

422


209


(28)


(7)

Change in other receivables (including long-term amounts)

(35)


(34)


(5)


(1)

Change in trade payables, accrued expenses and provisions

(24)


(54)


-


-

Change in other liabilities (including long-term amounts)

36


(95)


20


5

Payments for derivative hedging contracts, net

(6)


-


-


-

Income tax paid

(119)


(68)


(88)


(23)

Income tax received

6


-


1


-

Net cash from operating activities

1,557


836


781


203









Cash flows used in investing activities








Acquisition of property, plant, and
equipment

(289)


(305)


(295)


(77)

Acquisition of intangible assets

(77)


(91)


(73)


(19)

Dividend received

-


2


-


-

Change in current investments, net

(15)


231


(9)


(2)

Proceeds from other derivative contracts, net

4


-


-


-

Proceeds from sale of property, plant and equipment

4


4


2


-

Interest received 

23


15


11


3

Repayment of a long-term deposit

-


48


-


-

Net cash used in investing activities

(350)


(96)


(364)


(95)

 

 

 

Cellcom Israel Ltd.

(An Israeli Corporation)









Consolidated Statements of Cash Flows (cont'd)
















Convenience








 translation into








 US  dollar 


Year ended


Year ended


Year ended


Year ended


December 31,


December 31,


December 31,


 December 31,


2014


2015


2016


2016


NIS millions


NIS millions


NIS millions


US$ millions









Cash flows used in financing activities








Payments for derivative contracts, net

(29)


(32)


(13)


(3)

Receipt (Repayment) of long-term loans from financial institutions

(12)


-


340


88

Repayment of debentures

(1,092)


(873)


(732)


(191)

Proceeds from issuance of debentures, net of issuance costs

326


(3)


653


170

Dividend paid

(4)


(1)


(1)


-

Interest paid

(295)


(227)


(185)


(48)









Net cash used in financing activities

(1,106)


(1,136)


62


16









Changes in cash and cash equivalents

101


(396)


479


124









Cash and cash equivalents as at the beginning of the year

1,057


1,158


761


198

Effect of exchange rate fluctuations on cash and cash equivalents

-


(1)


-


-









Cash and cash equivalents as at the end of the year

1,158


761


1,240


322

 

 

 

Cellcom Israel Ltd

(An Israeli Corporation)


Reconciliation for Non-IFRS Measures


EBITDA


The following is a reconciliation of net income to EBITDA:


Year ended December 31

Convenience

translation

into US dollar

Year ended

December 31


2014

NIS millions

2015

NIS millions

2016

NIS millions

2016

US$ millions

Net income

354

97

150

39

Income taxes

110

36

10

2

Financing income

(100)

(55)

(46)

(12)

Financing expenses

298

232

196

51

Other expenses (income)

7

(3)

8

2

Depreciation and amortization

610

562

534

139

Share based payments

3

3

6

2

EBITDA

1,282

872

858

223






Three-month period ended

December 31


2014

NIS millions

2015

NIS millions

2016

NIS millions

Convenience

translation

into US dollar

2016

US$ millions

Net income

55

19

14

4

Income taxes

20

12

(22)

(6)

Financing income

(28)

(11)

(13)

(4)

Financing expenses

84

59

53

14

Other expenses

3

1

3

1

Depreciation and amortization

148

143

136

35

Share based payments

-

2

2

1

EBITDA

282

225

173

45


Free cash flow


The following table shows the calculation of free cash flow:





Year ended December 31

Convenience

translation

into US dollar

Year ended

December 31


2014

NIS millions

2015

NIS millions

2016

NIS millions

2016

US$ millions

Cash flows from operating activities(*)

1,557

836

781

203

Cash flows from investing activities

(350)

(96)

(364)

(95)

Sale of tradable debentures(**)

(3)

(246)

(1)

-

Free cash flow

1,204

494

416

108






Three-month period ended

December 31


2014

NIS millions

2015

NIS millions

2016

NIS millions

Convenience

translation

into US dollar

2016

US$ millions

Cash flows from operating activities(*)

277

210

178

47

Cash flows from investing activities

(99)

8

(96)

(25)

Sale of tradable debentures(**)

(4)

(97)

1

-

Free cash flow

174

121

83

22

 

(*)

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

Q1-2015

Q2-2015

Q3-2015

Q4-2015

Q1-2016

Q2-2016

Q3-2016

Q4-2016

FY-2015

FY-2016












Cellular service revenues

582

573

572

546

559

567

534

502

2,273

2,162

Fixed-line service revenues

269

264

267

263

264

264

276

267

1,063

1,071












Cellular equipment revenues

245

237

215

233

219

217

195

205

930

836

Fixed-line equipment revenues

17

17

28

56

29

30

39

60

118

158












Consolidation adjustments

(51)

(51)

(50)

(52)

(49)

(49)

(52)

(50)

(204)

(200)

Total revenues

1,062

1,040

1,032

1,046

1,022

1,029

992

984

4,180

4,027












Cellular EBITDA

130

149

168

154

178

181

149

117

601

625

Fixed-line EBITDA

66

67

67

71

60

57

60

56

271

233

Total EBITDA

196

216

235

225

238

238

209

173

872

858












Operating profit

55

80

96

79

101

104

73

32

310

310

Financing expenses, net

18

62

49

48

24

44

42

40

177

150

Profit for the period

26

12

40

19

59

44

33

14

97

150












Free cash flow

127

119

127

121

149

103

81

83

494

416












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

2,885

2,848

2,832

2,835

2,813

2,812

2,822

2,801

2,835

2,801

Monthly cellular ARPU (in NIS)

65.5

65.5

66.0

63.0

65.2

66.0

62.8

59.3

65.0

63.3

Churn rate for cellular subscribers (%)

11.9%

10.2%

10.1%

11.1%

11.1%

10.6%

10.5%

10.4%

42.0%

42.4%

 

Cellcom Israel Ltd.


Disclosure for debenture holders as of December 31, 2016


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 31.12.2016

As of 14.03.2017

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

B (4)(8)

22/12/05

02/01/06*

05/01/06*

10/01/06*

31/05/06*

925.102

185.020

220.220

11.544

231.764

231.831

-

-

5.30%

05.01.13

05.01.17

January-5

Linked to CPI

Hermetic Trust (1975) Ltd. Meirav Ofer Oren. 113 Hayarkon St., Tel Aviv. Tel: 03-5274867.

D (7)**

07/10/07

03/02/08*

06/04/09*

30/03/11*

18/08/11*

2,423.075

299.602

348.829

9.054

357.883

363.147

299.602

347.822

5.19%

01.07.13

01.07.17

July-1

Linked to CPI

Hermetic Trust (1975) Ltd. Meirav Ofer Oren. 113 Hayarkon St., Tel Aviv. Tel: 03-5274867.

E (7)(8)

06/04/09

30/03/11*

18/08/11*

1,798.962

163.633

163.622

10.115

173.737

173.795

-

-

6.25%

05.01.12

05.01.17

January-5

Not linked

Hermetic Trust (1975) Ltd. Meirav Ofer Oren. 113 Hayarkon St., Tel Aviv. Tel: 03-5274867.

F (4)(5)

(6)(8)**

20/03/12

714.802

714.802

730.637

16.454

747.091

700.899

643.322

656.254

4.60%

05.01.17

05.01.20

January-5

and July-5

Linked to CPI

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

G (4)(5)

(6)(8)**

20/03/12

285.198

285.198

285.414

9.777

295.191

246.571

228.158

228.325

6.99%

05.01.17

05.01.19

January-5

and July-5

Not linked

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

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

08/07/14

03/02/15*

11/02/15*

949.624

949.624

824.173

9.221

833.394

949.814

949.624

827.994

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)**

08/07/14

03/02/15*

11/02/15*

30/03/16*

804.010

804.010

752.961

16.324

769.285

854.261

804.010

754.246

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)

26/09/16

103.267

103.267

102.229

0.665

102.894

102.968

103.267

102.246

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)**

26/09/16

303.971

303.971

300.867

2.838

303.705

301.965

303.971

300.895

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.

Total


8,308.011

3,809.127

3,728.952

85.992

3,814.944

3,925.251

3,331.954

3,217.782







 

Comments:

(1)

In the reporting period, the Company fulfilled all terms of the debentures. The Company also fulfilled all terms of the Indentures and loan agreements. Debentures Series F through K financial and loan agreements covenants - as of December 31, 2016 the net leverage (net debt to EBITDA excluding one time events ratio- see definition in the Company's annual report for the year ended December 31, 2015 on Form 20-F, under "Item 5. Operating and Financial Review and Prospects B. Liquidity and Capital Resources Debt Service Public Debentures") was 2.99 (the net leverage without excluding one-time events was 2.99). In the reporting period, no cause for early repayment occurred. (2) Including interest accumulated in the books. (3) Annual payments, excluding Series F through K debentures in which the payments are semi annual. (4) Regarding debenture Series B and F through K and loan agreements, 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 debenture Series F through K and loan agreements - the Company has the right for early redemption under certain terms (see the Company's annual report for the year ended December 31, 2015 on Form 20-F, under "Item 5. Operating and Financial Review and Prospects B. Liquidity and Capital Resources Debt Service Public Debentures" and "-Other Credit Facilities". (6) Regarding debenture Series F and G - in June 2013, following a second decrease of the Company's debenture rating since their issuance, the annual interest rate has been increased by 0.25% to 4.60% and 6.99%, respectively, beginning July 5, 2013. (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, or the Exchange Offer, 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. (8) On January 5, 2017, after the end of the reporting period, the Company repaid principal payments of approximately NIS 514 million of Series B, E, F and G debentures.



(*)

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

(**)

As of December 31, 2016, debentures Series D, F through I and K are material, which represent 5% or more of the total liabilities of the Company, as presented in the financial statements.

 

Cellcom Israel Ltd.


Disclosure for debenture holders as of December 31, 2016 (cont.)


Debentures Rating Details* 


Series

Rating Company

Rating as of 31.12.2016 (1)

Rating as of 14.03.2017

Rating assigned upon issuance of the Series

Recent date of rating as of 14.03.2017

Additional ratings between original issuance and the recent date of rating as of 14.03.2017 (2)


Rating

B

S&P Maalot

A+

A+

AA-

08/2016

5/2006, 9/2007, 1/2008, 10/2008, 3/2009, 9/2010, 8/2011, 1/2012, 3/2012, 5/2012, 11/2012, 6/2013, 6/2014, 8/2014, 1/2015, 9/2015, 3/2016, 08/2016

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

D

S&P Maalot

A+

A+

AA-

08/2016

1/2008, 10/2008, 3/2009, 9/2010, 8/2011, 1/2012, 3/2012, 5/2012, 11/2012, 6/2013, 6/2014, 8/2014, 01/2015, 9/2015, 3/2016, 08/2016

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

E

S&P Maalot

A+

A+

AA

08/2016

9/2010, 8/2011, 1/2012, 3/2012, 5/2012, 11/2012, 6/2013, 6/2014, 8/2014, 01/2015, 9/2015, 3/2016, 08/2016

AA,AA-,A+ (2)

F

S&P Maalot

A+

A+

AA

08/2016

5/2012, 11/2012, 6/2013, 6/2014, 8/2014, 1/2015, 9/2015, 3/2016, 08/2016

AA,AA-,A+ (2)

G

S&P Maalot

A+

A+

AA

08/2016

5/2012, 11/2012, 6/2013, 6/2014, 8/2014, 1/2015, 9/2015, 3/2016, 08/2016

AA,AA-,A+ (2)

H

S&P Maalot

A+

A+

A+

08/2016

6/2014, 8/2014, 1/2015, 9/2015, 3/2016, 08/2016

A+ (2)

I

S&P Maalot

A+

A+

A+

08/2016

6/2014, 8/2014, 1/2015, 9/2015, 3/2016, 08/2016

A+ (2)

J

S&P Maalot

A+

A+

A+

08/2016

08/2016

A+ (2)

K

S&P Maalot

A+

A+

A+

08/2016

08/2016

A+ (2)

 

(1)

In August 2016, S&P Maalot affirmed the Company's rating of "ilA+/stable".

(2)

In September 2007, S&P Maalot issued a notice that the AA- rating for debentures issued by the Company was in the process of recheck with positive implications (Credit Watch Positive). In October 2008, S&P Maalot issued a notice that the AA- rating for debentures issued by the Company is in the process of recheck with stable implications (Credit Watch Stable). This process was withdrawn upon assignment of AA rating in March 2009. In August 2011, S&P Maalot issued a notice that the AA rating for debentures issued by the Company is in the process of recheck with negative implications (Credit Watch Negative). In May 2012, S&P Maalot updated the Company's rating from an "ilAA/negative" to an "ilAA-/negative". In November 2012, S&P Maalot affirmed the Company's rating of "ilAA-/negative". In June 2013, S&P Maalot updated the Company's rating from an "ilAA-/negative" to an "ilA+/stable". In June 2014, August 2014, January 2015, September 2015, March 2016 and August 2016, S&P Maalot affirmed the Company's rating of "ilA+/stable". For details regarding the rating of the debentures see the S&P Maalot report dated August 23, 2016.



*

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.

Summary of Financial Undertakings (according to repayment dates) as of December 31, 2016

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

635,476

219,313

-

-

-

151,339

Second year

331,941

222,524

-

-

-

101,017

Third year

331,941

165,619

-

-

-

77,439

Fourth year

331,941

80,263

-

-

-

58,843

Fifth year and on

702,484

860,430

-

-

-

148,057

Total

2,333,783

1,548,149

-

-

-

536,695

 

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

-

-

-

-

-

16,060

Second year

-

78,000

-

-

-

14,213

Third year

-

78,000

-

-

-

10,541

Fourth year

-

78,000

-

-

-

6,874

Fifth year and on

-

106,000

-

-

-

3,881

Total

-

340,000

-

-

-

51,569

 

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

Cellcom Israel Ltd.

Summary of Financial Undertakings (according to repayment dates) as of December 31, 2016 (cont.)

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

635,476

219,313

-

-

-

167,399

Second year

331,941

300,524

-

-

-

115,230

Third year

331,941

243,619

-

-

-

87,980

Fourth year

331,941

158,263

-

-

-

65,717

Fifth year and on

702,484

966,430

-

-

-

151,938

Total

2,333,783

1,888,149

-

-

-

588,264

 

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

5,627

1,360

-

-

-

869

Second year

833

476

-

-

-

521

Third year

833

341

-

-

-

475

Fourth year

833

138

-

-

-

430

Fifth year and on

8,542

6,348

-

-

-

1,216

Total

16,668

8,663

-

-

-

3,511

 

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.

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/cellcom-israel-announces-fourth-quarter-and-full-year-2016-results-300423931.html

SOURCE Cellcom Israel Ltd.

Copyright 2014 PR Newswire. All Rights Reserved


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