- Second Dividend during 2015 is expected from B Communications on
September 29, 2015-
Company Website:
http://www.Igld.com
RAMAT GAN, Israel -- (Business Wire)
Internet Gold – Golden Lines Ltd. (NASDAQ Global Select Market and
TASE:IGLD) today reported its financial results for the quarter ended
June 30, 2015. Internet Gold’s primary holding is its controlling
interest in B Communications Ltd. (TASE and Nasdaq: BCOM), which in turn
holds the controlling interest in Bezeq, The Israel Telecommunication
Corp., Israel’s largest telecommunications provider (TASE:BEZQ).
Commenting on the results, Doron Turgeman, CEO of Internet Gold said,
“During the last few years, we focused on improving our debt structure
and our financial strength. We feel very comfortable with both our
current Loan to Value and liquidity. Today's decision by B
Communications' board of directors to declare a cash dividend in the
amount of NIS 0.73 per share, is very good news for us and we expect to
receive NIS 15 million on September 29, 2015. It's the second
consecutive quarter that BCOM distributed a dividend to its shareholders
and we believe there will be more distributions in the quarters ahead.
We are very pleased with the results of our B Communications subsidiary
and with Bezeq, which continues to generate a steady return that
enhances our overall financial position and capabilities.”
Dividend from B Communications: On August 31, 2015, B
Communications' board of directors declared a cash dividend in the
amount of NIS 22 million ($6 million) or NIS 0.73 ($0.19) per share.
Internet Gold expects to receive its distributive share of approximately
NIS 15 million ($4 million) on September 29, 2015. On June 16, 2015,
Internet Gold received a cash dividend totaling NIS 45 million ($12
million) from B Communications as part of the NIS 67 million ($18
million) or NIS 2.24 ($0.59) per share dividend paid by BCOM.
Bezeq’s Results: For the second quarter of 2015, the Bezeq Group
reported revenues of NIS 2.6 billion ($691 million) and an operating
profit of NIS 794 million ($211 million). Bezeq’s EBITDA for the second
quarter totaled NIS 1.25 billion ($330 million), representing an EBITDA
margin of 47.8%. Net profit for the period attributable to Bezeq’s
shareholders totaled NIS 482 million ($128 million). Bezeq's cash flow
from operating activities during the period totaled NIS 840 million
($223 million). The second quarter of 2015 was the first quarter for
Bezeq to fully consolidate the operating results of YES in its
financials.
Cash and Debt Position: As of June 30, 2015,Internet
Gold’s unconsolidated cash and cash equivalents and short term
investments totaled NIS 335 million ($89 million), its unconsolidated
gross debt was NIS 1.1 billion ($303 million) and its unconsolidated net
debt was NIS 807 million ($214 million).
|
Internet Gold's Unconsolidated Balance Sheet Data (1) |
|
In millions | |
| |
| Convenience |
| |
| | | | | translation into | | |
| | | | | U.S. dollars | | |
| | | | | (Note A) | | |
| June 30, | | June 30, | | June 30, | | December 31, |
| 2014 | | 2015 | | 2015 | | 2014 |
| NIS | | NIS | | US$ | | NIS |
Short term liabilities
|
72
| | 215 | | 57 | |
82
|
Long term liabilities
|
1,125
| | 927 | | 246 | |
1,062
|
Total liabilities
|
1,197
| | 1,142 | | 303 | |
1,144
|
Cash and cash equivalents
|
418
| | 335 | | 89 | |
322
|
Total net debt
|
779
| | 807 | | 214 | |
822
|
(1) Does not include the consolidated balance sheet of B
Communications and its subsidiaries.
|
|
Internet Gold's Cash Management: Internet Gold manages its cash
balances according to an investment policy that was approved by its
board of directors. The investment policy seeks to preserve principal
and maintain adequate liquidity while maximizing the income received
from investments without significantly increasing the risk of loss.
According to Internet Gold's investment policy approximately 80% of its
funds must be invested in investment-grade securities.
Dividend from Bezeq: On March 25, 2015, the Board of Directors of
Bezeq resolved to recommend to the general meeting of its shareholders
the distribution of a cash dividend of NIS 844 million ($224 million).
On May 6, 2015, Bezeq's shareholders approved the dividend distribution
and on May 27, 2015, B Communications’ received its share of the
dividend distribution of NIS 259 million ($69 million).
On August 30, 2015, the Board of Directors of Bezeq resolved to
recommend to the general meeting of shareholders the distribution of a
cash dividend of NIS 933 million ($248 million) representing its profits
for the first half of 2015, excluding its revaluation gain of NIS 12
million ($3 million) arising from its gaining control over YES. The
dividend, which is subject to shareholder approval, is expected to be
paid on October 26, 2015 to shareholders of record as of October 12,
2015.
B Communications’ share of the dividend distribution, if approved, is
expected to be approximately NIS 286 million ($76 million).
Internet Gold’s Second Quarter Consolidated Financial Results
Internet Gold's consolidated revenues for the second quarter of 2015
totaled NIS 2.6 billion ($691 million), a 15.7% increase compared with
NIS 2.25 billion reported in the second quarter of 2014. The increase
resulted from the full consolidation of Yes, beginning in the second
quarter of 2015. For both the current and the prior-year periods,
Internet Gold’s consolidated revenues consisted entirely of Bezeq’s
revenues.
Internet Gold's consolidated operating income for the second quarter of
2015 totaled NIS 611 million ($162 million), a 41% decrease compared
with NIS 1,039 million reported in the second quarter of 2014. Bezeq’s
results for the second quarter of 2014 included NIS 582 million one-time
capital gain (before tax) from the sale of Coral Tel Ltd., the operator
of the "Yad2" portal.
Internet Gold's consolidated net income for the second quarter of 2015
totaled NIS 239 million ($63 million), compared with NIS 532 million
reported in the second quarter of 2014. Bezeq’s results for the second
quarter of 2014 included a one-time capital gain (after tax) of NIS 437
million from the sale of Coral Tel Ltd.
Internet Gold’s Second Quarter Unconsolidated Financial Results
As of June 30, 2015 Internet Gold held approximately 67% of B
Communications outstanding shares. Accordingly, Internet Gold's interest
in B Communications’ net income for the second quarter of 2015 totaled
NIS 14 million ($4 million), compared with its share in B
Communications' net income of NIS 72 million in the second quarter of
2014.
Internet Gold’s unconsolidated net financial expenses for the second
quarter of 2015 totaled NIS 26 million ($7 million) compared with NIS 39
million in the second quarter of 2014. These expenses consist of NIS 22
million ($6 million) of interest and CPI linkage expenses related to its
publicly-traded debentures and NIS 4 million ($1 million) of financial
expenses generated by the decline in value of our short term investments.
Internet Gold's net loss attributable to shareholders for the second
quarter of 2015 totaled NIS 13 million ($3 million) compared with an
income attributable to its shareholders of NIS 32 million in the second
quarter of 2014.
|
| |
| |
| |
| |
In millions | | | | | |
| | |
| | | | | | Convenience | | |
| | | | | | translation | | |
| | Three-month | | Three-month | | into | | |
| | period ended | | period ended | | U.S. dollars | | Year ended |
| | June 30, | | June 30, | | (Note A) | | December 31, |
| | 2014 | | 2015 | | 2015 | | 2014 |
| | NIS | | NIS | | US$ | | NIS |
Revenues
| | - | | - | |
-
| |
-
|
Financial expenses, net
| |
(39)
| | (26) | | (7) | | (83) |
Operating expenses
| |
(1)
| | (1) | | - | | (4) |
Interest in BCOM's net income (loss)
| |
72
| | 14 | | 4 | | (16) |
Net income (loss)
| |
32
| | (13) | | (3) | | (103) |
| | | | | | | |
|
Bezeq Group Results (Consolidated)
To provide further insight into its results, the Company is providing
the following summary of the consolidated financial report of the Bezeq
Group for the second quarter ended June 30, 2015. For a full discussion
of Bezeq’s results for the second quarter ended June 30, 2015, please
refer to its website: http://ir.bezeq.co.il.
| | |
|
Bezeq Group (consolidated) | Q2 2015 | Q2 2014 | % change |
| (NIS millions) | |
| | |
|
Revenues
|
2,603
|
2,250
|
15.7%
|
Operating profit
|
794
|
1,234
|
-35.7%
|
EBITDA
|
1,245
|
1,553
|
-19.8%
|
EBITDA margin
|
47.8%
|
69.0%
| |
Net profit
|
482
|
810
|
-40.5%
|
Basic and Diluted EPS (NIS)
|
0.17
|
0.29
|
-41.4%
|
Cash flow from operating activities
|
840
|
1,064
|
-21.1%
|
Payments for investments
|
511
|
323
|
58.2%
|
Free cash flow 1 |
413
|
787
|
-47.5%
|
Net debt/EBITDA (end of period) 2 |
2.30
|
1.54
|
|
| | |
|
1 Free cash flow is defined as cash flow from operating
activities less net payments for investments.
|
2 EBITDA in this calculation refers to the trailing
twelve months.
| |
|
|
Revenues of the Bezeq Group in the second quarter of 2015 amounted to
NIS 2.60 billion ($691 million) compared with NIS 2.25 billion in the
corresponding quarter of 2014, an increase of 15.7%. The increase was
related to the first-time consolidation of YES revenues in the second
quarter of 2015 in the amount of NIS 439 million ($116 million) as well
as an increase in the revenues of Bezeq Fixed-Line and Bezeq
International. The increase was partially offset by lower revenues at
Pelephone.
Salary expenses of the Bezeq Group in the second quarter of 2015
amounted to NIS 497 million ($132 million) compared with NIS 443 million
in the corresponding quarter of 2014, an increase of 12.2%. The increase
was due to the first-time consolidation of YES salary expenses in the
second quarter of 2015 in the amount of NIS 62 million ($16 million).
The increase was partially offset by a decrease in salary expenses of
Pelephone due to continued streamlining actions.
Operating expenses of the Bezeq Group in the second quarter of 2015
amounted to NIS 1.00 billion ($266 million) compared with NIS 822
million in the corresponding quarter of 2014, an increase of 21.9%. The
increase was due to the first-time consolidation of YES operating
expenses in the second quarter of 2015 in the amount of NIS 227 million
($60 million). The increase was partially offset by a decrease in
operating expenses at Pelephone and Bezeq Fixed-Line due to continued
streamlining actions.
Other operating income of the Bezeq Group in the second quarter of 2015
amounted to NIS 141 million ($37 million) compared with NIS 568 million
in the corresponding quarter of 2014. Other operating income in the
corresponding quarter in 2014 was influenced by a one-time NIS 582
million ($154 million) gain from the sale of Coral Tel Ltd.. The
decrease in other operating income was partially offset by provision in
the amount of NIS 117 million for early retirement of employees at Bezeq
Fixed-Line in the second quarter of 2014.
Operating profit of the Bezeq Group in the second quarter of 2015
amounted to NIS 794 million ($211 million) compared with NIS 1.23
billion in the corresponding quarter of 2014, a decrease of 35.7%.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
of the Bezeq Group in the second quarter of 2015 amounted to NIS 1.25
billion ($330 million) (EBITDA margin of 47.8%) compared with NIS 1.55
billion (EBITDA margin of 69.0%) in the corresponding quarter of 2014, a
decrease of 19.8%.
Net profit of the Bezeq Group in the second quarter of 2015 amounted to
NIS 482 million ($128 million) compared with NIS 810 million in the
corresponding quarter of 2014, a decrease of 40.5%.
The decrease in the profitability metrics of the Bezeq Group was due to
the aforementioned one-time NIS 582 million ($154 million) gain from the
sale of Coral Tel Ltd., which was partially offset by provision in the
amount of NIS 117 million for early retirement of employees at Bezeq
Fixed-Line in the second quarter of 2014.
Cash flow from operating activities of the Bezeq Group in the second
quarter of 2015 amounted to NIS 840 million ($223 million) compared with
NIS 1.06 billion in the corresponding quarter of 2014, a decrease of
21.1%. The decrease in cash flow from operating activities was primarily
due to lower profitability at Pelephone and changes in working capital
at Pelephone and Bezeq Fixed-Line. The decrease was partially offset by
the first-time consolidation of Yes, which had cash flow from operating
activities of NIS 106 million ($28 million) in the first quarter of 2015.
Payments for investments (Capex) of the Bezeq Group in the second
quarter of 2015 amounted to NIS 511 million ($136 million) compared with
NIS 323 million in the corresponding quarter of 2014, an increase of
58.2%. The increase in investments was primarily due to the payment of
NIS 96 million($25 million) by Pelephone for the LTE 4G frequencies in a
government tender as well as the first-time consolidation of the
investments of Yes in the second quarter of 2015 in the amount of NIS 82
million ($22 million).
Free cash flow of the Bezeq Group in the second quarter of 2015 amounted
to NIS 413 million ($110 million) compared with NIS 787 million in the
corresponding quarter of 2014, a decrease of 47.5%.
Net financial debt of the Bezeq Group amounted to NIS 9.54 billion
($2.53 billion) at June 30, 2015 compared with NIS 6.95 billion as of
June 30, 2014. At June 30, 2015, the Bezeq Group net financial debt to
EBITDA ratio was 2.30, compared with 1.54 on June 30, 2014.
Notes:
A.Convenience Translation to Dollars: For the convenience
of the reader, certain of the reported NIS figures of June 30, 2015 have
been presented in millions of U.S. dollars, translated at the
representative rate of exchange as of June 30, 2015 (NIS 3.769 = U.S. r
$1.00). The U.S. dollar ($) amounts presented should not be construed as
representing amounts receivable or payable in U.S. dollars or
convertible into U.S. dollars, unless otherwise indicated.
B. Use of non-IFRS Measurements: We and the Bezeq Group’s
management regularly use supplemental non-IFRS financial measures
internally to understand, manage and evaluate its business and make
operating decisions. We believe these non-IFRS financial measures
provide consistent and comparable measures to help investors understand
the Bezeq Group’s current and future operating cash flow performance.
These non-IFRS financial measures may differ materially from the
non-IFRS financial measures used by other companies.
EBITDA is a non-IFRS financial measure generally defined as earnings
before interest, taxes, depreciation and amortization. The Bezeq Group
defines EBITDA as net income before financial income (expenses), net,
impairment and other charges, expenses recorded for stock compensation
in accordance with IFRS 2, income tax expenses and depreciation and
amortization. We present the Bezeq Group’s EBITDA as a supplemental
performance measure because we believe that it facilitates operating
performance comparisons from period to period and company to company by
backing out potential differences caused by variations in capital
structure, tax positions (such as the impact of changes in effective tax
rates or net operating losses) and the age of, and depreciation expenses
associated with, fixed assets (affecting relative depreciation expense).
EBITDA should not be considered in isolation or as a substitute for net
income or other statement of operations or cash flow data prepared in
accordance with IFRS as a measure of profitability or liquidity. EBITDA
does not take into account our debt service requirements and other
commitments, including capital expenditures, and, accordingly, is not
necessarily indicative of amounts that may be available for
discretionary uses. In addition, EBITDA, as presented in this press
release, may not be comparable to similarly titled measures reported by
other companies due to differences in the way that these measures are
calculated.
Reconciliation between the Bezeq Group’s results on an IFRS and non-IFRS
basis is provided in a table immediately following the Company's
consolidated results. Non-IFRS financial measures consist of IFRS
financial measures adjusted to exclude amortization of acquired
intangible assets, as well as certain business combination accounting
entries. The purpose of such adjustments is to give an indication of the
Bezeq Group’s performance exclusive of non-cash charges and other items
that are considered by management to be outside of its core operating
results. The Bezeq Group’s non-IFRS financial measures are not meant to
be considered in isolation or as a substitute for comparable IFRS
measures, and should be read only in conjunction with its consolidated
financial statements prepared in accordance with IFRS.
About Internet Gold
Internet Gold is a telecommunications-oriented holding company which is
a controlled subsidiary of Eurocom Communications Ltd. Internet Gold’s
primary holding is its controlling interest in B Communications Ltd.
(TASE and Nasdaq: BCOM), which in turn holds the controlling interest in
Bezeq, The Israel Telecommunication Corp., Israel’s largest
telecommunications provider (TASE: BEZQ). Internet Gold’s shares are
traded on NASDAQ and the TASE under the symbol IGLD. For more
information, please visit the following Internet sites:
www.igld.com
www.bcommunications.co.il
www.ir.bezeq.co.il
Forward-Looking Statements
This press release contains forward-looking statements that are subject
to risks and uncertainties. Factors that could cause actual results to
differ materially from these forward-looking statements include, but are
not limited to, general business conditions in the industry, changes in
the regulatory and legal compliance environments, the failure to manage
growth and other risks detailed from time to time in B Communications'
filings with the Securities Exchange Commission. These documents contain
and identify other important factors that could cause actual results to
differ materially from those contained in our projections or
forward-looking statements. Stockholders and other readers are cautioned
not to place undue reliance on these forward-looking statements, which
speak only as of the date on which they are made. We undertake no
obligation to update publicly or revise any forward-looking statement.
|
| |
| |
| |
| |
Internet Gold – Golden Lines Ltd.
|
Condensed Consolidated Statements of Financial Position as at
(In millions) |
| | | | | | | |
|
| | | | Convenience | | | | |
| | | | translation into | | | | |
| | | | U.S. dollars | | | | |
| | | | (Note A) | | | | |
| | June 30, | | June 30, | | June 30, | | December 31, |
| | 2015 | | 2015 | | 2014 | | 2014 |
| | NIS | | US$ | | NIS | | NIS |
Assets | | | | | | | | |
Cash and cash equivalents
| | 904 | | 240 | |
796
| |
732
|
Restricted cash
| | 29 | | 8 | |
73
| |
65
|
Investments, including derivatives
| | 2,192 | | 582 | |
2,645
| |
3,406
|
Trade receivables, net
| | 2,256 | | 598 | |
2,335
| |
2,227
|
Other receivables
| | 220 | | 58 | |
329
| |
242
|
Inventory
| | 96 | | 26 | |
89
| |
96
|
Assets classified as held-for-sale
| | 24 | | 6 | |
135
| |
52
|
| | | | | | | |
|
Total current assets | | 5,721 | | 1,518 | |
6,401
| |
6,820
|
| | | | | | | |
|
Investments, including derivatives
| | 177 | | 47 | |
80
| |
271
|
Long-term trade and other receivables
| | 656 | | 173 | |
587
| |
566
|
Property, plant and equipment
| | 7,345 | | 1,949 | |
6,542
| |
6,572
|
Intangible assets
| | 7,642 | | 2,028 | |
6,175
| |
5,908
|
Deferred and other expenses
| | 360 | | 95 | |
370
| |
364
|
Broadcasting rights
| | 471 | | 125 | |
-
| |
-
|
Investment in equity-accounted investee
| | 28 | | 8 | |
1,014
| |
1,057
|
Deferred tax assets
| | 855 | | 227 | |
35
| |
-
|
| | | | | | | |
|
Total non-current assets | | 17,534 | | 4,652 | |
14,803
| |
14,738
|
| | | | | | | |
|
Total assets | | 23,255 | | 6,170 | |
21,204
| |
21,558
|
| | | | | | | |
|
|
Internet Gold – Golden Lines Ltd.
|
Condensed Consolidated Statements of Financial Position as at (In millions) |
|
| |
| Convenience |
| |
| |
| | | | translation into | | | | |
| | | | U.S. dollars | | | | |
| | | | (Note A) | | | | |
| | June 30, | | June 30, | | June 30, | | December 31, |
| | 2015 | | 2015 | | 2014 | | 2014 |
| | NIS | | US$ | | NIS | | NIS |
Liabilities | | | | | | | | |
Bank loans and credit and debentures
| | 2,301 | | 610 | |
1,605
| |
1,561
|
Trade payables
| | 1,021 | | 271 | |
639
| |
664
|
Liability to related party
| | 101 | | 27 | |
-
| |
-
|
Other payables including derivatives
| | 818 | | 217 | |
701
| |
757
|
Current tax liabilities
| | 777 | | 206 | |
727
| |
671
|
Provisions
| | 90 | | 24 | |
134
| |
62
|
Employee benefits
| | 272 | | 72 | |
378
| |
259
|
Total current liabilities | | 5,380 | | 1,427 | |
4,184
| |
3,974
|
| | | | | | | |
|
Bank loans and debentures
| | 13,817 | | 3,666 | |
12,338
| |
13,419
|
Employee benefits
| | 238 | | 63 | |
229
| |
233
|
Other liabilities
| | 208 | | 55 | |
304
| |
262
|
Provisions
| | 69 | | 18 | |
68
| |
69
|
Deferred tax liabilities
| | 805 | | 214 | |
899
| |
835
|
Total non-current liabilities | | 15,137 | | 4,016 | |
13,838
| |
14,818
|
| | | | | | | |
|
Total liabilities | | 20,517 | | 5,443 | |
18,022
| |
18,792
|
| | | | | | | |
|
Equity | | | | | | | | |
Total equity attributable to equity holders
| | | | | | | | |
of the Company
| | (159) | | (42) | |
(187)
| |
(183)
|
Non-controlling interests
| | 2,897 | | 769 | |
3,369
| |
2,949
|
| | | | | | | |
|
Total equity | | 2,738 | | 727 | |
3,182
| |
2,766
|
| | | | | | | |
|
Total liabilities and equity | | 23,255 | | 6,170 | |
21,204
| |
21,558
|
| | | | | | | |
|
|
Internet Gold – Golden Lines Ltd.
|
Condensed Consolidated Statements of Income as at (In million except per share data) |
|
|
| |
| |
| |
| | | Six months period ended | | Three months period ended | | Year ended |
| | | June 30, | | June 30, | | December 31, |
| | | |
| Convenience |
| | | |
| Convenience |
| | | |
| | | | | translation | | | | | | translation | | | | |
| | | | | into | | | | | | into | | | | |
| | | | | U.S. dollars | | | | | | U.S. dollars | | | | |
| | | | | (Note A) | | | | | | (Note A) | | | | |
| | | 2015 | | 2015 | | 2014 | | 2015 | | 2015 | | 2014 | | 2014 |
| | | NIS | | US$ | | NIS | | NIS | | US$ | | NIS | | NIS |
Revenues | | | 4,777 | | 1,267 | |
4,561
| | 2,603 | | 690 | |
2,250
| |
9,055
|
| | | | | | | | | | | | | | |
|
Cost and expenses | | | | | | | | | | | | | | | |
Depreciation and amortization
| | | 1,011 | | 268 | |
941
| | 572 | | 152 | |
472
| |
1,873
|
Salaries
| | | 938 | | 249 | |
891
| | 498 | | 132 | |
443
| |
1,771
|
General and operating expenses
| | | 1,805 | | 479 | |
1,695
| | 1,004 | | 266 | |
824
| |
3,371
|
Other operating income, net
| | | (93) | | (25) | |
(536)
| | (82) | | (22) | |
(528)
| |
(535)
|
| | | | | | | | | | | | | | |
|
| | | 3,661 | | 971 | |
2,991
| | 1,992 | | 528 | |
1,211
| |
6,480
|
| | | | | | | | | | | | | | |
|
Operating income | | | 1,116 | | 296 | |
1,570
| | 611 | | 162 | |
1,039
| |
2,575
|
| | | | | | | | | | | | | | |
|
Financing expenses, net
| | | 335 | | 89 | |
515
| | 235 | | 62 | |
165
| |
694
|
| | | | | | | | | | | | | | |
|
Income after financing | | | | | | | | | | | | | | | |
expenses, net | | | 781 | | 207 | |
1,055
| | 376 | | 100 | |
874
| |
1,881
|
| | | | | | | | | | | | | | |
|
Share of losses in
| | | | | | | | | | | | | | | |
equity-accounted investee
| | | 16 | | 4 | |
98
| | - | | - | |
79
| |
170
|
| | | | | | | | | | | | | | |
|
Income before income tax | | | 797 | | 211 | |
957
| | 376 | | 100 | |
795
| |
1,711
|
| | | | | | | | | | | | | | |
|
Income tax
| | | 256 | | 68 | |
394
| | 137 | | 36 | |
263
| |
667
|
| | | | | | | | | | | | | | |
|
Net income for the period | | | 541 | | 143 | |
563
| | 239 | | 64 | |
532
| |
1,044
|
| | | | | | | | | | | | | | |
|
Income (loss) attributable to: | | | | | | | | | | | | | | | |
Owners of the company
| | | 15 | | 4 | |
(112)
| | (13) | | (3) | |
32
| |
(103)
|
Non-controlling interests
| | | 526 | | 139 | |
675
| | 252 | | 67 | |
500
| |
1,147
|
| | | | | | | | | | | | | | |
|
Net income for the period | | | 541 | | 143 | |
563
| | 239 | | 64 | |
532
| |
1,044
|
| | | | | | | | | | | | | | |
|
Earnings per share | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
Net income (loss), basic | | | 0.82 | | 0.22 | |
(5.82)
| | (0.63) | | (0.17) | |
1.68
| |
(5.38)
|
| | | | | | | | | | | | | | |
|
Net income (loss), diluted | | | 0.77 | | 0.21 | |
(5.89)
| | (0.65) | | (0.17) | |
1.63
| |
(5.50)
|
| | | | | | | | | | | | | | |
|
|
Internet Gold – Golden Lines Ltd.
|
Reconciliation for NON-IFRS Measures EBITDA
The following is a reconciliation of the Bezeq Group’s operating
income to EBITDA:
|
|
| |
(In millions) | | Three months period ended |
| | June 30, |
| | |
| Convenience |
| |
| | | | translation | | |
| | | | into | | |
| | | | U.S. dollars | | |
| | | | (Note A) | | |
| | 2015 | | 2015 | | 2014 |
| | NIS | | US$ | | NIS |
| | | | | |
|
Operating income
| | 794 | | 210 | |
1,234
|
Depreciation and amortization
| | 451 | | 120 | |
319
|
| | | | | |
|
EBITDA
| | 1,245 | | 330 | |
1,553
|
| | | | | |
|
|
Free Cash Flow
The following table shows the calculation of the Bezeq Group’s
free cash flow:
|
|
(In millions) |
| Three months period ended |
| | June 30, |
| | | Convenience | |
| | | translation | |
| | | into | |
| | | U.S. dollars | |
| | | (Note A) | |
| | 2015 | 2015 | 2014 |
| | NIS | US$ | NIS |
| | | |
|
Cash flow from operating activities
| | 840 | 223 |
1,064
|
Purchase of property, plant and equipment
| | (363) | (96) |
(281)
|
Investment in intangible assets and deferred expenses
| | (148) | (39) |
(42)
|
Proceeds from the sale of property, plant and equipment
| | 84 | 22 |
46
|
| | | |
|
Free cash flow
| | 413 | 110 |
787
|
|
Designated disclosure with respect to the
Company's projected cash flows
In accordance with the "hybrid model disclosure requirements"
promulgated by the Israeli Securities Authority that are applicable to
Internet Gold - Golden Lines Ltd. (the "Company"), the following is a
report of the Company’s projected cash flows (the "report") and a
disclosure of the examination by the Company’s board of directors of the
Company’s liquidity in accordance with regulations 10(b)(1)(d) and
10(b)(14) of the Securities Regulations (Immediate and Periodic Notices)
5730-1970:
-
The Company’s un-reviewed financial statements as of June 30, 2015,
and for the quarter then ended, reflect that the Company had an equity
deficit of NIS 159 million as of such date.
-
The Company’s board of directors reviewed the Company’s outstanding
debt obligations, its existing and anticipated cash resources and
needs that were included in the framework of the projected cash flow
report for the periods from July 1, 2015 until December 31, 2015,
January 1, 2016 until December 31, 2016 and January 1, 2017 until June
30, 2017, described below. The board of directors also examined the
assumptions and projections that were included in the report and
determined that such assumptions and projections are reasonable and
appropriate.
-
Based on the foregoing, the Company’s board of directors determined
that the Company does not have a liquidity problem and that for the
duration of the period covered by the projected cash flows statement
there is no reasonable doubt that the Company will not meet its
existing and anticipated liabilities when due.
The following is the projected cash flow of the
Company and the assumptions upon which it is based:
|
| For the period from July 1, 2015 until December 31, 2015 |
| For the period from January 1, 2016 until December 31, 2016 |
| For the period from January 1, 2017 until June 30, 2017 |
| | NIS millions | | NIS millions | | NIS millions |
Opening balance: | | | | | | |
Cash and cash equivalents (1) | | 39 | | 10 | | 10 |
| | | | | |
|
Independent sources: | | | | | | |
Cash flows from investing activities: | | | | | | |
Proceeds from the sale of marketable securities (2)(3) | |
35
| |
91
| |
114
|
Cash provided by investing activities | | 35 | | 91 | | 114 |
| | | | | |
|
Sources from Subsidiary: | | | | | | |
Dividends from subsidiary (4) | | 31 | | 98 | | 47 |
| | | | | |
|
Projected uses: | | | | | | |
Cash flows used in operating activities (5) | | (2) | | (4) | | (2) |
| | | | | |
|
Cash flows from financing activities: | | | | | | |
Repayments of debentures (6) | |
(62)
| |
(132)
| |
(134)
|
Interest payments (6) | |
(31)
| |
(53)
| |
(25)
|
Cash used in financing activities | | (93) | | (185) | | (159) |
| | | | | |
|
Closing balance: | | | | | | |
Cash and cash equivalents (1) | | 10 | | 10 | | 10 |
Assumptions and explanations pertaining to the
above table:
(1) Cash flows include the Company’s projected cash flows and do not
include the consolidation of projected cash flows from the Company’s
subsidiary, B Communications Ltd. (“B Communications”) or from Bezeq -
The Israel Telecommunications Corp. Ltd. (“Bezeq”).
(2) In addition to the cash balances it maintains, the Company also
invests in low-risk, high liquidity marketable securities that are used
to finance its operations. The Company’s investment policy was reviewed
by the Company’s audit committee and by a credit rating agency. At least
80% of the Company's portfolio is invested in securities rated at a
local rating of AA- and higher. As of July 1, 2015, the Company’s
investments in marketable securities totaled NIS 296 million and by June
30, 2017 this balance is expected to be NIS 69 million.
As of June 30, 2015, cash, cash equivalents and current investments in
marketable securities totaled NIS 335 million. These liquid balances can
be converted to cash in a short period of time and are a source for debt
service. The Company’s cash, cash equivalents and current investments in
marketable securities are sufficient for the service of the Company's
debt through February 2017.
(3) For the purposes of calculating cash flows from investments in
marketable securities, the Company assumed an annual yield of 3% on the
average balance of its investments in marketable securities during the
period. This assumption is based on the Company's conservative
investment policy, as well as on yields historically achieved by the
Company from its investments in marketable securities and on
management’s assessment of the probability of achieving such yield
during the period.
The following are the benchmarks used by the Company and a sensitivity
analysis of the above assessments:
A. In 2014 and in 2013 the Company generated yields of 2.4% and 5.5%,
respectively, on its cash and marketable securities portfolio. The
Company does not anticipate that there will be any material changes to
its investment policy in the projected periods.
B. The following table shows the expected profit in NIS millions from
investments in cash and marketable securities in the projected periods
under a scenario of a 5% annual yield and a scenario of a -2% annual
yield:
|
|
| |
| |
| | | | | |
Period \ Annual yield | | | 5% | | -2% |
1 – six month profit (loss)
| | |
7
| |
(3)
|
2 – annual profit (loss)
| | |
11
| |
(4)
|
3 – six month profit (loss)
| | |
3
| |
(1)
|
| | | | |
|
(4) Assumption of the receipt of dividends from B Communications during
the period is based on the following:
According to what it believes to be a conservative estimate, the
Company’s management anticipates that B Communications will distribute
accumulated dividends of at least NIS 265 million by June 30, 2017. This
assumption is based on market forecasts of the estimated net profits of
Bezeq and on the Company's estimation of B Communications’ anticipated
retained earnings during the projected periods. These estimates are
derived, among other things, from B Communications' projected financing
expenses and its projected purchase price allocation amortization
expenses with respect to its acquisition of the controlling interest in
Bezeq ("Bezeq PPA") that are non-cash expenses. Future Bezeq PPA
amortization expenses are expected to decrease significantly because of
the accelerated depreciation method that was adopted by B Communications
at the time of its acquisition of the controlling interest in Bezeq.
From April 14, 2010, the date of B Communications' acquisition of its
interest in Bezeq, until June 30, 2015, B Communications has amortized
approximately 69% of the total Bezeq PPA.
The dividend assumption stated in the distribution estimate above, does
not differ materially from that reported in the previous quarter. The
Company's management made only an internal update of the timing of
distributions between the projected periods.
B Communications does not have a dividend distribution policy.
Nevertheless, the Company assumes that there is a high probability that
B Communications will distribute most of its retained earnings balance
as a dividend, based, among other things, on B Communications’ (i)
dividend distributions in December 2013 and June 2015, and (ii)
declaration in August 2015 of a dividend payable in September 2015. The
Company believes that the probability of future dividend distributions
by B Communications has improved and is supported by the unrestricted
cash mechanism provision in its Senior Secured Notes that were issued in
February 2014 that allows the use of funds that are not pledged to the
holders of the Senior Secured Notes.
Accordingly, the Company’s management believes that B Communications
will act in the same manner as it did in November 2013 and May and
August 2015, and that it will distribute most of its retained earnings
balance, so long as B Communications will have sufficient resources to
service its debt for a period of at least 18 months and that the
distribution meets the criteria for distributions under Israeli law.
This assumption does not contradict the restrictions on distributing
dividends under applicable law and other restrictions applicable to B
Communications.
(5) The cash flows from the Company’s current operations include the
administrative operating costs and costs associated with the Company
being a dual-listed company traded on the NASDAQ Global Select Market
and on the Tel Aviv Stock Exchange.
(6) The repayment of principal and interest are based on the repayment
schedule for the Company’s outstanding debentures, in addition to an
assumed 0% annual increase in the Consumer Price Index in 2015, an
assumed 1.5% annual increase in the Consumer Price Index in 2016 and an
assumed 2% annual increase in the Consumer Price Index in 2017.
The Company has additional cash generating
abilities that for conservative reasons were not taken in to account in
preparing the projected cash flow detailed above. The following
describes the Company's assumptions regarding these scenarios:
A.All of the Company's shares in B Communications are free
and clear of any encumbrance. If necessary, the Company can sell some of
these shares, and will still remain the controlling shareholder of B
Communications. An example of this ability to sell shares of B
Communications is the sale of shares to Norisha Holdings Ltd. in 2013.
B.The Company has financial flexibility and quick access to
capital markets that enable it to raise funds within a short period of
time. This is evident from the debenture issuances and debenture series
exchanges that the Company completed in recent years.
The Company’s board of directors has reviewed the Company’s liabilities,
its existing and anticipated cash resources and needs that were included
in the framework of the projected cash flow report, examined their scope
and feasibility, as well as the timing of their receipt, and found that
all such assumptions and the projections were reasonable and appropriate.
The Company’s board of directors examined the Company’s anticipated
resources and liabilities, and considering the financial data in the
above cash flow report and management’s explanations of such data
determined that the Company does not have a liquidity problem and that
for the duration of the projected period for which cash flow information
has been provided there is no reasonable doubt that the Company will not
meet its existing and anticipated liabilities when due.
The information detailed above, concerning the Company’s cash flow
forecast, and particularly concerning the projected dividend and yield
on securities, are forward looking information as defined in the
Securities Law, 5728-1968. This information includes forecasts,
subjective assessments, estimates, etc. and is based, among other
things, on objective market forecasts and reviews issued to the public,
and relies, among other things, on the company management’s past
experience. Furthermore, some of such information is based on future
data and internal estimates by the Company’s management made at the
current time, and there is no certainty that they will materialize, in
whole or in part, due to factors that are not in the Company’s control.
It is hereby clarified that there is a likelihood that said forward
looking information will not be realized, in whole or in part, both with
respect to the Company’s forecasts and with respect to the working
assumptions on which they are based.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150831005518/en/
Contacts:
Internet Gold
Idit Cohen, +972-3-924-0000
IR
Manager
idit@igld.com
or
Investor
relations:
Hadas Friedman, +972-3-516-7620
Investor
Relations
Hadas@km-ir.co.il
Source: Internet Gold
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