TEL AVIV, Israel, May 20 /PRNewswire-FirstCall/ -- First quarter net
profit attributable to shareholders increased 48% year-over-year to a record
NIS 608 million, on record revenues of NIS 3.16 billion
First quarter EBITDA increased 18% year-over-year to a record NIS 1.29
billion
First quarter free cash flow rises 157% to a record NIS 804 million
Bezeq - The Israel Telecommunication Corp., Limited (TASE: BEZQ),
Israel's leading telecommunications provider, announced today its financial
results for the first quarter 2009 period ended March 31, 2009. Details
regarding today's investor conference call and web cast are included later in
this press release.
Bezeq Group's First Quarter 2009 Financial Highlights (consolidated
results):
- Revenues of NIS 3.16 billion, up 2.0% compared to the prior
year period.
- Operating profit of NIS 866 million, up 30.4% compared to the
prior year period.
- Net profit attributable to shareholders of NIS 608 million,
up 47.9% compared to the prior year period.
- Earnings per basic and diluted shares amounted to NIS 0.23,
compared to NIS 0.15 per basic and diluted shares for the prior year
period.
- Earnings before interest, taxes, depreciation and amortization
(EBITDA) totaled NIS 1.29 billion, up 18.0% compared to the prior year
period; EBITDA margin was 40.8% compared to 35.3% in prior year period.
- Capital expenditures-related payments in the quarter totaled NIS
471 million, up 28.7% year-over-year, primarily due to the ongoing
deployment of Bezeq's Next Generation Network (NGN) and the roll-out of
Pelephone's new HSPA network.
- Free cash flow totaled NIS 804 million, up 156.9% year-over-year.
In addition, Pelephone, the Bezeq Group's cellular operations segment,
announced today that it already has over 200,000 subscribers on its new,
advanced High-Speed GSM (HSPA) network.
As previously announced, Bezeq will distribute a cash dividend to
shareholders of NIS 792 million, or approximately NIS 0.30 per share, on May
24th, 2009 to shareholders of record as of May 11th, 2009.
Segment Highlights:
- Bezeq Fixed-Line: First quarter 2009 segment results were
highlighted by ongoing streamlining and cost efficiency initiatives
which helped drive double-digit year-over-year increases in operating
profit and EBITDA, both of which established new quarterly record
highs; EBITDA margin reached an impressive 48.9%. First quarter 2009
ADSL subscriber lines grew 4.2% year-over-year with an ADSL ARPU of NIS
68, up sequentially and in line with the year ago period. In addition,
Bezeq Fixed-Line made progress on the operational deployment and
Customer conversions to its new ultra-fast IP-based NGN network, aiming
to reach a meaningful part of Israeli households by 2010.
- Pelephone: Pelephone, the cellular operations segment, delivered
record quarterly revenues of NIS 1.27 billion, reflecting 7.8%
year-over-year growth. Double-digit growth in quarterly operating
profit, net profit and EBITDA (34.9% EBITDA margin) set new record
highs for each of these key profitability metrics. Pelephone's new
High-Speed GSM (HSPA) network, which was commercially launched in
February 2009, currently has over 200,000 subscribers. The High-Speed
GSM (HSPA) network is central to Pelephone's commitment to access
higher value segments of the mobile communications market.
- Bezeq International: Bezeq International, Israel's leading
supplier of Internet services and International direct dialing (IDD),
posted first quarter 2009 revenues of NIS 324 million, up 3.4%
year-over-year, driven by higher sales of core services including
broadband Internet. First quarter operating profit, net profit and
EBITDA (24.6% EBITDA margin) all posted solid performance gains. Free
cash flow improved to NIS 62 million during the quarter compared to a
negative cash flow of NIS 20 million for the year ago period.
- yes: The multi-channel pay-TV segment posted record revenue of
NIS 384 million, driven by a 2.0% year-over-year increase in
Subscribers to 560,000. yes also made dramatic improvements in
profitability during the first quarter of 2009, with operating profit
of NIS 66 million. Excluding the impact of financing costs to
shareholders, yes generated a net profit of NIS 40 million as compared
to a net loss of NIS 14 million in the year ago period. First quarter
EBITDA totaled NIS 122 million, up 33.9% year-over-year, reflecting an
EBITDA margin of 31.9%. yes' free cash flow increased to NIS 29 million
in the first quarter as compared to NIS 5 million in the year ago
period.
Shlomo Rodav, Chairman of the Board of Bezeq, stated, "The Bezeq Group
kicked off 2009 with a strong first quarter performance. Top line revenues
set a new quarterly record of NIS 3.16 billion, complemented by sharp
improvements in profitability across all business segments as well as record
operating and free cash flow levels. Higher first quarter revenues were
driven by improved sales in our Pelephone, Bezeq International and yes
business segments as well as healthy growth in sales of high-speed broadband,
data and transmission services in our Fixed-Line segment. The strength of our
comprehensive portfolio of consumer and business communications offerings
continues to serve us well as our strategic positioning in key growth
segments of these markets more than offset the anticipated decline in revenue
associated with traditional telephony access lines.
"The Bezeq Group's success in leveraging across-the-board streamlining
and cost efficiency measures was directly evident in the material performance
gains in all key profitability metrics. Our record quarterly operating
profit, net profit and EBITDA results stand as a testament to the successful
execution and dedication of the entire team at Bezeq and its subsidiaries.
These results are particularly impressive in light of the weak economic
environment, a highly competitive sector landscape as well as the challenges
associated with the development and launch of the new High-Speed GSM (HSPA)
and NGN platforms.
"During the quarter Pelephone successfully launched its new High-Speed
GSM (HSPA) network and we are very pleased with our progress on this front to
date in terms of migrating as well as adding initial subscribers. As of today
we already have over 200,000 subscribers on our new High-Speed GSM (HSPA)
network. The first quarter also marked the operational deployment of our
IP-based NGN infrastructure. We are adding new customers to the NGN each week
and aim to serve a meaningful part of Israeli households with ultra-fast
Internet service of up to 50 megabits as well as the most advanced telephony
services during 2010.
"On the regulatory front we look forward to working with the recently
appointed Minister of Communications and are currently awaiting final
approval from regulators regarding our revised operating licenses which would
allow for the bundling of Bezeq triple-play services," concluded Mr. Rodav.
Alan Gelman, Chief Financial Officer and Deputy CEO of Bezeq, commented,
"Our ability to execute on our strategic and financial objectives during the
quarter allowed the Bezeq Group to significantly improve cash flows, further
strengthen our balance sheet and most importantly continue to deliver value
to our shareholders through dividend distributions. During the first quarter
of 2009 the Group essentially doubled operating cash flow and increased free
cash flow by over 150% year-over-year.
"As a result of our strong cash management, streamlining and cost
efficiency measures, the Bezeq Group ended the first quarter with cash and
short-term investments of NIS 1.74 billion. Cost savings during the quarter
amounted to a 4.7% year-over-year reduction in consolidated salaries and
operating and general expenses (combined), primarily related to efficiency
measures implemented by Bezeq Fixed-Line and yes. The strength of our balance
sheet places us in a position of strength as we navigate the current economic
downturn. Overall, we are extremely pleased with our first quarter
performance and believe we have set a strong foundation for the remainder of
2009.
"Based on the strength of our first quarter results the Bezeq Group is
incrementally raising its full-year 2009 financial guidance, though we are
closely monitoring current economic conditions and continue to remain
vigilant with regards to any potential impact on our business," concluded Mr.
Gelman.
Bezeq Group (Consolidated) Results
Bezeq Group (Consolidated) Q1 2009 Q1 2008 Change
(NIS millions)
Revenues 3,162 3,100 2.0%
Operating profit 866 664 30.4%
EBITDA 1,290 1,093 18.0%
EBITDA margin 40.8% 35.3% 15.7%
Net profit attributable to shareholders of
the Company 608 411 47.9%
Diluted EPS (NIS) 0.23 0.15 53.3%
Cash flow from operating activities 1,224 618 98.1%
Capex, net 420 305 37.7%
Free cash flow 804 313 156.9%
Net debt/EBITDA (end of period) 0.96 1.19
Net debt/shareholders' equity (end of
period) 0.84 0.99
The Bezeq Group's revenues for the first quarter of 2009 were a record
NIS 3.16 billion, up 2.0% from NIS 3.10 billion reported for the first
quarter of 2008. Revenue growth was primarily driven by the strength of the
Pelephone cellular segment, complemented by year-over-year growth in the
Bezeq International and yes multi-channel television segments. Increased
revenues in these segments were partially mitigated by an anticipated
decrease in the domestic Fixed-Line business segment. The Fixed-Line segment
did however continue to experience solid growth in high speed Internet, data
and transmission communications services which partially offset the
anticipated decline in revenue associated with fixed-line telephony.
Operating profit for the Bezeq Group increased 30.4% in 2009 to NIS 866
million, up from NIS 664 million in the first quarter of 2008, driven
primarily by ongoing cost reduction initiatives in Bezeq's major operating
segments, as well as increased total revenues.
Net profit attributable to Bezeq shareholders for the first quarter of
2009 amounted to NIS 608 million, up 47.9% from a net profit of NIS 411
million for the first quarter of 2008.
The Bezeq Group's EBITDA for the first quarter of 2009 totaled a record
NIS 1.29 billion (40.8% EBITDA margin), up 18.0% as compared to the first
quarter of 2008 EBITDA of NIS 1.09 billion (35.3% EBITDA margin).
Cash paid for net capital expenditures in the first quarter of 2009
amounted to NIS 420 million, an increase of 37.7% as compared to NIS 305
million in the first quarter of 2008. This increase primarily stemmed from
payments related to the ongoing deployment of Bezeq Fixed-Line's NGN and
payments related to Pelephone's HSPA network which was launched in the first
quarter.
Free cash flow for the Bezeq Group totaled NIS 804 million for the first
quarter of 2009, an increase of 156.9% compared to the prior year period. The
rise in free cash flow was primarily the result of significantly higher cash
flows from operations, which was mainly driven by profitability and working
capital improvements across the operating segments, and to a lesser extent by
timing differences.
As of March 31, 2009, the Bezeq Group's net financial debt was NIS 4.54
billion, compared with NIS 4.94 billion as of March 31, 2008. The decrease in
the net financial debt was primarily related to the repayment of loans and
debentures in the various business segments.
Bezeq Fixed-Line Results
Bezeq Fixed-Line Q1 2009 Q1 2008 Change
(NIS millions)
Revenues 1,326 1,408 -5.8%
Operating profit 437 368 18.8%
EBITDA 648 586 10.6%
EBITDA margin 48.9% 41.6%
Capex, net 190 98 93.9%
Number of active subscriber lines at end of
period (thousands) 2,579 2,711 -4.9%
Average monthly revenue per line (NIS) * 81 84 -3.6%
Number of outgoing usage minutes (millions) 3,121 3,511 -11.1%
Number of incoming usage minutes (millions) 1,654 1,673 -1.1%
Number of ADSL subscribers at end of period
(thousands) 1,011 970 4.2%
Average monthly revenue per ADSL subscriber (NIS) 68 68 0.0%
* Not including revenues from data communications and transmission
services, internet services, services to communications providers,
and contract and other work.
In the first quarter of 2009, Bezeq Fixed-Line generated its highest
operating profit and EBITDA levels and margins since the company's
privatization in 2005. Improved profitability was driven by the company's
ongoing success in reducing operating costs, offset in part by the impact of
a 5.8% decline in Fixed-Line revenue year-over-year. Fixed-Line operating
profit in the first quarter of 2009 totaled NIS 437 million, an increase of
18.8% from the first quarter of 2008, as total operating costs declined by
NIS 151 million, or 14.5%, driven by a 13.7% decline in interconnect
expenses, a 12.0% reduction in salary expense and the positive impact from
the ongoing implementation of initiatives to reduce operating costs.
The Fixed-Line segment posted first quarter 2009 EBITDA of NIS 648
million (48.9% EBITDA margin), up 10.6% from EBITDA of NIS 586 million (41.6%
EBITDA margin) in the first quarter of 2008. First quarter 2009 results
included a NIS 20 million pre-tax gain related to the sale of real estate to
be made redundant by the NGN network.
The 5.8% decline in revenues was, as anticipated, primarily due to a
decrease in the number of traditional access lines and call traffic as well
as a decrease in interconnect fees to the cellular networks. When adjusted
for revenues from cellular airtime collected by Bezeq Fixed-Line and paid to
the cellular companies, Fixed-Line segment revenues totaled NIS 1.12 billion,
representing a decline of only 3.9% as compared to the prior year period. The
Fixed-Line segment experienced solid revenue growth associated with its
high-speed Internet (ADSL) services as well as higher levels of revenue from
data and transmission communications. These factors continue to demonstrate
the Fixed-Line business' ability to mitigate the decline in legacy telephony
revenues, through growing sales of advanced services and solutions offered to
the consumer and business markets.
The number of customers subscribing to Bezeq's ADSL Internet service
increased 4.2% year-over-year to over 1.01 million subscribers as of March
31, 2009, while Bezeq continued to upgrade its ADSL subscriber base, with 52%
of its customers enjoying bandwidths of at least 2 MB, as compared to 37% as
of the end of the prior year period. The growth in Bezeq's ADSL customer base
helped offset a 4.9% decline in total telephony access lines during the
quarter which totaled 2.58 million as of March 31, 2009.
ADSL ARPU was NIS 68 in the first quarter of 2009, in line with the prior
year period. Fixed-line telephony ARPL declined 3.6% in first quarter of 2009
to NIS 81 as compared to NIS 84 in the prior year period.
Progress continues to be made with regards to the ongoing deployment of
the NGN infrastructure, which provides Bezeq's customers with dramatic
improvements in Internet access speeds, enhances Bezeq's technological
preparedness to compete in an increasingly converged communications market,
and provides an important platform upon which to build out additional
value-added services, increase operating efficiencies and improve future
segment profitability. During the first quarter, Bezeq continued with the
modular NGN deployment as it moves towards expanding its coverage to reach a
meaningful part of Israeli households during 2010.
Pelephone Results
Pelephone Q1 2009 Q1 2008 Change
(NIS millions)
Revenues 1,265 1,173 7.8%
Operating profit 302 215 40.5%
EBITDA 441 344 28.2%
EBITDA margin 34.9% 29.3%
Net profit 230 163 41.1%
Cash flows from operating activities 375 256 46.5%
Capex, net 149 102 46.1%
Free cash flow 226 154 46.8%
Number of subscribers at end of period
(millions) 2,669 2,595 2.9%
Average revenue per user (ARPU, NIS) 128 126 1.6%
Average monthly minutes of use per
subscriber (MOU) 323 355 -9.0%
Pelephone, the Bezeq Group's cellular segment, experienced a very strong
first quarter with record results across its top and bottom line financial
performance metrics, including double-digit percentage improvements in
operating profit, net profit, EBITDA and free cash flow.
Pelephone successfully launched its new HSPA network infrastructure
during the quarter, as scheduled. The new network, which is central to
Pelephone's commitment to access higher value segments of the mobile
communications market, already has 200,000 subscribers, with MOU, ARPU and
data usage profiles consistent with those of higher value segments, and
positions Pelephone as a premier cellular service provider for consumer as
well as business customers. Pelephone's active subscribers totaled 2.67
million as of March 31, 2009, an increase of 2.9% year-over-year.
Revenues in the first quarter of 2009, totaled a record NIS 1.27 billion,
a 7.8% increase from revenues of NIS 1.17 billion in the prior year period.
Revenues were driven primarily by a rise in sales of a wider range of new
handset equipment, as well as higher subscriber levels and increased sales of
data, value-added and content services. In the first quarter of 2009,
Pelephone saw stronger revenues from handset sales, as it began offering
advanced handset equipment from a range of manufacturers previously
unavailable to its existing and new subscribers.
Revenues from data, value-added and content services constituted a record
18.5% of Pelephone's revenues from cellular services for the first quarter of
2009, compared to 15.0% in the first quarter of 2008 and 18.4% in the fourth
quarter of 2008.
Pelephone's ARPU for the first quarter increased 1.6% year-over-year and
4.9% sequentially to NIS 128. Minutes of use (MOU) declined 9.0%
year-over-year and 3.6% sequentially to 323 minutes, mainly as a result of
the transition to billing per second as opposed to billing per 12-second
intervals previously. ARPU and MOU for the first quarter of 2009 include the
effect of the reduction of 92,000 dormant subscribers from the active
subscriber base as of December 31, 2008. The inclusion of the effect of the
subscriber reduction in the comparative periods would have increased ARPU and
MOU for those periods by approximately 1% to 3%.
Net profit for Pelephone in the first quarter of 2009 totaled NIS 230
million, an increase of 41.1% compared to NIS 163 million in the first
quarter of 2008. Net profit benefited mainly from improved margins on handset
sales, higher revenue from data, value-added and content services and a 10.6%
decrease in year-over-year segment salary expense. These gains were mitigated
by a 7.8% increase in depreciation and amortization expenses related to
additional depreciation, as well as higher marketing expenses and increased
maintenance costs associated with the operation of the new HSPA network
alongside the existing CDMA cellular network.
Pelephone posted first quarter 2009 EBITDA of NIS 441 million (34.9%
EBITDA margin), an increase of 28.2% compared to NIS 344 million (29.3%
EBITDA margin) for the first quarter of 2008.
Bezeq International Results
Bezeq International Q1 2009 Q1 2008 Change
(NIS millions)
Revenues 324 314 3.4%
Operating profit 60 55 9.9%
EBITDA 80 75 6.7%
EBITDA margin 24.6% 23.8%
Net profit 44 42 6.3%
Cash flows from operating
activities 84 8 1013.3%
Capex, net 21 28 -22.2%
Free cash flow 62 (20) n.m.
Bezeq International, Israel's leading supplier of Internet services and
international direct dialing (IDD), posted first quarter 2009 revenues of NIS
324 million, up 3.4% compared to NIS 314 million in the first quarter of
2008. Revenues were driven by increased levels of sales in the Internet
service provider (ISP) area which experienced a rise in the number of
broadband customers. Gains in these areas were partially offset by a decline
in revenues from international minute traffic, as well as lower PBX sales
activity.
Bezeq International generated a net profit of NIS 44 million in the first
quarter of 2009, an increase of 6.3% compared to a net profit of NIS 42
million in year ago period. The increase in profitability came as a result of
growth in the core ISP business as well as continued focus on cost control.
Bezeq International posted first quarter 2009 EBITDA of NIS 80 million
(24.6% EBITDA margin), an increase of 6.7% compared to EBITDA of NIS 75
million (23.8% EBITDA margin) for the first quarter of 2008.
Bezeq International experienced a sharp improvement in operating and free
cash flow year-over-year, reaching NIS 84 million and NIS 62 million,
respectively, due to the positive impact of segment working capital changes.
yes Results
yes Q1 2009 Q1 2008 Change
(NIS millions)
Revenues 384 381 0.6%
Operating profit 66 27 146.3%
EBITDA 122 92 33.9%
EBITDA margin 31.9% 24.0%
Net profit (1) (66) -98.2%
Cash flows from operating activities 91 84 7.8%
Capex, net * 61 79 -22.7%
Free cash flow 29 5 523.4%
Number of subscribers (end of period, in
thousands) 560 549 2.0%
Average revenue per user (ARPU, NIS) 228 231 -1.3%
* Including subscriber acquisition costs
Yes, the multi-channel pay-TV segment, posted record revenue while
generating dramatic improvements in segment profitability during the first
quarter of 2009, despite operating in a highly penetrated market. Operating
profit reached a record NIS 66 million, for a 17.2% operating margin as
compared to 7.0% in the prior year period.
Revenue from the yes multi-channel pay-TV segment during the first
quarter of 2009 increased to a record NIS 384 million, up 0.6%
year-over-year. The first quarter rise in revenue was primarily related to a
2.0% year-over-year net increase in subscribers as well as higher sales of
advanced content services, YESmax and HD services. ARPU experienced a 1.3%
decline to NIS 228 for the quarter.
Net loss declined to NIS 1 million, essentially breakeven in the first
quarter of 2009 versus a net loss of NIS 66 million in the year ago period,
supported by the positive impact of ongoing cost reduction measures as well
as a decrease in financing expenses as the cost of servicing CPI-linked debt
declined as a result of negative CPI data. Excluding the impact of financing
costs to shareholders, yes generated a net profit of NIS 40 million as
compared to a net loss of NIS 14 million in the year ago period.
yes posted EBITDA of NIS 122 million (31.9% EBITDA margin) for the first
quarter of 2009, an increase of 33.9% over EBITDA of NIS 92 million (24.0%
EBITDA margin) for the year ago period.
yes grew its customer base by 2.0% to 560,000 subscribers as of March 31,
2009, up 11,000 subscribers from the year ago period and in-line
sequentially. On a sequential basis, increased customer subscriptions during
the quarter were partially offset by higher customer churn linked to the
expiration of special subscription agreements associated with changes in
consumer laws.
Outlook
Building on the incremental visibility following the close of the first
quarter of 2009, which included materially stronger financial performance as
compared to the corresponding quarter in 2008, and taking into consideration
the current economic environment, the Bezeq Group is raising its outlook for
2009 and currently anticipates achieving revenues, net profit, EBITDA, and
operating cash flows in line with those of the Bezeq Group's full-year 2008
performance levels.
The Bezeq Group is not changing its outlook for gross capital
expenditures, which will still be close to the 2008 level.
Conference Call & Web Cast Information
The Bezeq Group will conduct a conference call hosted by Mr. Shlomo
Rodav, Bezeq Chairman and Mr. Alan Gelman, Bezeq Chief Financial Officer and
Deputy CEO, on Wednesday, May 20, 2009, at 4:00 PM Israel Time / 9:00 AM
Eastern Time. Participants are invited to join the live conference call by
dialing:
International Phone Number: +972-3-918-0609
Israel Phone Number: 03-918-0609
A live webcast of the conference call will be available on the investor
relations section of the Bezeq corporate website at www.bezeq.co.il. Please
visit the website at least 15 minutes early to register for the webcast and
download any necessary audio software.
A webcast replay will be made available on the investor relations section
of the Bezeq corporate website. An automated telephone replay will also be
available approximately three hours after the completion of the live call
through Wednesday, May 27, 2009. Participants are invited to listen to the
conference call replay by dialing:
International Phone Number: +972-3-925-5928
Israel Phone Number: 03-925-5928
About Bezeq - The Israel Telecommunication Corp.
Bezeq is Israel's leading telecommunications service provider.
Established in 1984, the Company has led Israel into the new era of
communications, based on the most advanced technologies and services. Bezeq
and its subsidiaries offer the full range of communications services
including domestic, international and cellular phone services; Internet,
ADSL, and other data communications; satellite-based multi-channel TV; and
corporate networks.
For more information about Bezeq please visit the corporate website at
http://www.bezeq.co.il.
This press release contains general data and information as well as
forward looking statements about Bezeq. Such statements include expressions
of management's expectations about new and existing programs, opportunities,
technology and market conditions. Although Bezeq believes its expectations
are based on reasonable assumptions, these statements are subject to numerous
risks and uncertainties. These statements should not be regarded as a
representation that anticipated events will occur or that expected objectives
will be achieved. These forward-looking statements are made only as of the
date hereof and the company assumes no obligation to update any
forward-looking statement In addition, the realization and/or otherwise of
the forward-looking information will be affected by factors that cannot be
assessed in advance, and which are not within the control of the Corporation,
including the risk factors that are characteristic of its operations, and
developments in the general environment, and external factors and the
regulation that affects the Corporation's operations.
"Bezeq" The Israel Telecommunication Corp., Limited
Consolidated Income Statements
For the three months For the
ended year ended
March 31, December
31,
2009 2008 2008
(Unaudited) (Unaudited) (Audited)
NIS NIS NIS
millions millions millions
Revenue 3,162 3,100 12,407
Costs and expenses
Depreciation and amortization 424 429 1,703
Salary 557 616 2,354
Operating and general expenses (Note 8) 1,335 1,370 5,437
Other operating expenses (income), net (20) 21 96
2,296 2,436 9,590
Operating income 866 664 2,817
Financing expenses
Financing expenses 115 161 747
Financing income (78) (61) (166)
Financing costs, net 37 100 581
Profit after finance expenses 829 564 2,236
Share in profits of equity-accounted
Investees 2 1 5
Profit before income tax 831 565 2,241
Income tax 222 180 720
Profit for the period 609 385 1,521
Attributable to:
The shareholders of the Company 608 411* 1,627
Non-controlling interest 1 (26)* (106)
Profit for the period 609 385 1,521
Earnings per share
Basic earnings per share (in NIS) 0.23 0.15 0.62
Diluted earnings per share (in NIS) 0.23 0.15 0.61
* Reclassified
"Bezeq" The Israel Telecommunication Corp., Limited
Consolidated Balance Sheets
March 31, March 31, December
2009 2008 31, 2008
(Unaudited) (Unaudited) (Audited)
NIS NIS NIS
millions millions millions
Assets
Cash and cash equivalents 1,702 1,283 786
Investments, including derivatives 37 317 33
Trade receivables 2,390 2,480 2,373
Other receivables 234 245 211
Inventory 188 238 158
Current tax assets - 28 -
Assets classified as held for sale 43 20 34
Total current assets 4,594 4,611 3,595
Investments, including derivatives 192 227 187
Trade receivables 637 562 576
Broadcasting rights, net of rights
exercised 288 271 253
Property, plant and equipment 6,066 5,981 6,036
Intangible assets 2,664 2,495 2,674
Deferred and other expenses 398 376 411
Investments in equity-accounted 34 39 32
investees
Deferred tax assets 503 626* 550*
Total non-current assets 10,782 10,577 10,719
Total assets 15,376 15,188 14,314
* Reclassified
"Bezeq" The Israel Telecommunication Corp., Limited
Consolidated Balance Sheets (continued)
March 31, March 31, December
2009 2008 31, 2008
(Unaudited) (Unaudited) (Audited)
NIS NIS NIS
millions millions millions
Liabilities
Debentures, loans and borrowings 1,018 1,032 1,780
Trade payables 1,471 1,350 1,381
Other payables, including
derivatives 962 866 850
Current tax liabilities 88 33 45
Deferred income 58 19 62
Provisions 358 388 355
Employee benefits 359 632* 412*
Total current liabilities 4,314 4,320 4,885
Debentures 3,711 4,242 3,943
Bank loans 1,391 1,125 214
Loans from institutions 161 140 109
Loans provided by non-controlling
interest in a subsidiary 462 389 449
Employee benefits 267 262 265
Deferred income and others 25 52 76
Provisions 70 58 64
Deferred tax liabilities 63 42 65
Total non-current liabilities 6,150 6,310 5,185
Total liabilities 10,464 10,630 10,070
Equity
Share capital 6,146 6,132 6,132
Share premium 26 - -
Reserves 762 690 748
Deficit balance (1,557) (1,865)* (2,165)*
Total equity attributable to owners
of the Company 5,377 4,957 4,715
Non-controlling interest (465) (399)* (471)
Total equity 4,912 4,558 4,244
15,376 15,188 14,314
Total equity and liabilities
* Reclassified
"Bezeq" The Israel Telecommunication Corp., Limited
Consolidated Statements of Cash Flows
For the three months For the
ended year ended
March 31 December
2009 2008 31 2008
(Unaudited) (Unaudited) (Audited)
NIS NIS NIS
millions millions millions
Cash flows from operating activities
Net profit for the period 609 385 1,521
Adjustments:
Depreciation 346 351 1,394
Amortization of intangible assets 72 68 289
Amortization of deferred and other
expenses 6 10 20
Equity in profits of
equity-accounted investees (2) (1) (5)
Financing costs, net 77 129 561
Capital gain, net (20) (1) (68)
Share-based payment transactions 15 13 75
Income tax expenses 222 180 720
Receipt (payment) for disposal of
derivative financial instruments,
net 9 (10) (38)
Change in:
Inventory (33) (37) 42
Trade receivables (78) (104) (10)
Other receivables (51) (53) (44)
Other payables 197 73 15
Trade payables 116 (143) (225)
Provisions 7 (4) (34)
Broadcasting rights, net of rights
exercised (34) (28) (11)
Employee benefits (50) (83) (302)
Deferred income and others (46) 1 50
Income tax paid (138) (128) (535)
Net cash flows from operating
activities 1,224 618* 3,415
Cash flows from investment
activities
Investment in intangible assets and
deferred expenses (63) (59) (469)
Proceeds from the sale of property,
plant and equipment and deferred
expenses 51 61 147
Realization of current investments,
net 6 57 321
Purchase of property, plant and (408) (307) (1,300)
equipment
Proceeds from realization of
investments and long-term loans 7 6 19
Purchase of investments and
long-term loans (1) - (8)
Investment in an affiliate - (1) -
Dividend received - - 13
Interest received 5 19 64
Net cash used for investment
Activities (403) (224)* (1,213)
* Reclassified
"Bezeq" The Israel Telecommunication Corp., Limited
Consolidated Statements of Cash Flows (cont'd)
For the three months For the
ended year ended
31 March December
2009 2008 31 2008
(Unaudited) (Unaudited) (Audited)
NIS NIS NIS
millions millions millions
Cash flows from financing activities
Receipt of loans 400 - -
Repayment of debentures (206) (229) (714)
Repayment of loans (31) (40) (148)
Short-term borrowing, net - 12 (50)
Dividend paid - - (1,514)
Interest paid (110) (56) (243)
Receipt for settlement of derivative
financial instruments, net - 4 52
Transfer of funds by non-controlling
interest less dividend distributed,
net 5 - 8
Proceeds from exercise of employee
options 36 - -
Net cash from (used for) financing
activities 94 (309) (2,609)
Net increase (decrease) in cash and
cash equivalents 915 85 (407)
Cash and cash equivalents at the
beginning of the period 786 1,203 1,203
Effect of fluctuations in the rate
of exchange on cash balances 1 (5) (10)
Cash and cash equivalents at the end
of the period 1,702 1,283 786
Investor Relations Contact:
Mr. Naftali Sternlicht
Bezeq
Phone: +972-2-539-5441
Email: ir@bezeq.co.il
Media Relations Contact:
Mr. Guy Hadass
Bezeq
Phone: +972-3-626-2600
Email: dover@bezeq.co.il
