---

 

 

 

ADJUSTED EBITDA² TOTALED NIS 917 MILLION IN 2017

 

PROFIT TOTALED NIS 114 MILLION IN 2017

 

NET DEBT² DECLINED BY NIS 620 MILLION IN 2017 TO REACH NIS 0.9 BILLION

 

CELLULAR POST-PAID SUBSCRIBER BASE
INCREASED BY 79 THOUSAND SUBSCRIBERS IN 2017

 

2017 Annual Highlights (compared with 2016, which was prior to the adoption of IFRS 15)

 

·	Total Revenues: NIS 3,268 million (US$ 943 million), a decrease of 8%

·	Service Revenues: NIS 2,582 million (US$ 745 million), a decrease of 6%

·	Equipment Revenues: NIS 686 million (US$ 198 million), a decrease of 13%

·	Total Operating Expenses (OPEX)2: NIS 1,946 million (US$ 561 million), a decrease of 16%

·	Adjusted EBITDA: NIS 917 million (US$ 264 million), an increase of 10%

·	Adjusted EBITDA Margin2: 28% of total revenues compared with 24%

·	Profit for the Year: NIS 114 million (US$ 33 million) an increase of 119%

·	Net Debt: NIS 906 million (US$ 261 million), a decrease of NIS 620 million

·	Adjusted Free Cash Flow (before interest)2: NIS 599 million (US$ 173 million), a decrease of NIS 159 million

·	Cellular ARPU: NIS 62 (US$ 18), a decrease of 5%

·	Cellular Subscriber Base: approximately 2.67 million at year-end

·	TV Subscriber Base: approximately 43 thousand households at year-end

 

Fourth quarter 2017 highlights (compared with fourth quarter 2016, which was prior to the adoption of IFRS 15)

 

·	Total Revenues: NIS 834 million (US$ 241 million), an increase of 2%

·	Service Revenues: NIS 630 million (US$ 182 million), a decrease of 3%

·	Equipment Revenues: NIS 204 million (US$ 59 million), an increase of 21%

·	Total Operating Expenses (OPEX): NIS 519 million (US$ 150 million), a decrease of 9%

·	Adjusted EBITDA: NIS 158 million (US$ 46 million), a decrease of 4%

 

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·	Adjusted EBITDA Margin: 19% of total revenues compared with 20%

·	Loss for the Period: NIS 50 million (US$ 14 million), an increase in loss of NIS 43 million

·	Net Debt: NIS 906 million (US$ 261 million), a decrease of NIS 620 million

·	Adjusted Free Cash Flow (before interest): NIS 63 million (US$ 18 million), a decrease of NIS 206 million

·	Cellular ARPU: NIS 59 (US$ 17), a decrease of 5%

·	Cellular Subscriber Base: approximately 2.67 million at quarter-end

·	TV Subscriber Base: approximately 43 thousand households at quarter-end

 

Rosh Ha’ayin, Israel, March 29, 2018 – Partner Communications Company Ltd. (“Partner” or the “Company”) (NASDAQ and TASE: PTNR), a leading Israeli communications provider, announced today its results for the quarter and year ended December 31, 2017.

 

Commenting on the fourth quarter 2017 results, Mr. Isaac Benbenisti, CEO of Partner noted:

 

"We view significant accomplishments in our financial results for 2017: growth in the Company's EBITDA compared to 2016, while doubling profit, adding 79 thousand cellular Post-Paid subscribers, a record addition of TV households to Partner TV, massive deployment of fiber optic infrastructure, all this while solidifying the financial strength to leverage the Company's growth.

 

Partner TV is leading the Israeli TV market in terms of household additions, and with a significant gap compared with its competitors. In the fourth quarter of 2017, an additional 29 thousand households joined Partner TV and, as of today, over 64 thousand households are connected to Partner TV, most of them customers who left HOT and Yes and chose to move to the only TV service in Israel which offers all of its customers 4K set-top boxes together with Netflix at a push of a button on the remote control. Our cooperation with Netflix continues to prove successful and we are proud of this cooperation and recognize the great value that it brings to our customers.

 

Our fiber optic project, Partner Fiber, which was commercially launched in August 2017, experienced a significant increase in the pace of deployment in the fourth quarter and, as of March 2018, tens of thousands of households, across many cities throughout the country, are already able to connect to Partner’s fiber services. Last month, we launched new products that combine Partner Fiber, the fast internet infrastructure with speeds of up to 1,000 Mbps, with Partner TV. We intend to continue to expand our offerings, which are based on full communication solutions on Partner's independent infrastructure, in internet, TV and cellular services.

 

In the cellular space, Partner continued to increase its cellular Post-Paid subscriber base in the fourth quarter of 2017, so that 87% of our cellular subscribers were Post-Paid subscribers at year-end. In the last quarter alone, we reported net growth of 14 thousand Post-Paid subscribers, which completes an addition of 79 thousand Post-Paid subscribers in 2017, who chose to join Partner's cellular services due to, among other reasons, value offerings such as advanced cyber services which are included in various plans, unique Partner services such as wifi calling, and Israel's most advanced network deployment of LTE and LTE Advanced. In addition, as part of our strategy to offer unique value offerings to our customers, and again demonstrating our ability to partner with leading international companies, we announced at the end of December 2017 an exclusive collaboration with Apple Music, under which we offer all our Post-Paid cellular subscribers a free six-month subscription to its music services.”

 

 

Mr. Tamir Amar, Partner's Chief Financial Officer, commented on the results:

 

“2017 was characterized by the strengthening of Partner's position in the communications market and its transformation into a comprehensive communications group with entry into new activities, including the entry into the television world, Partner TV, which was officially launched in June 2017, and the expansion of the deployment of an independent fiber optic infrastructure for residential customers. At the same time, the Company continued to strengthen its cellular subscriber base with growth of 79,000 Post-Paid cellular subscribers in 2017, similar to the growth seen in 2016, as well as a decline in the churn rate as a result of lower churn among Post-Paid cellular subscribers.

 

In addition, during 2017, the Company took a number of steps to improve the profitability of equipment sales, and accordingly, equipment sales profitability improved from 18% in 2016 to 21% in 2017, together with a significant improvement in the quality of sales as reflected by, among others, the decrease in doubtful debts expenses.

 

In spite of the Company's entry into television services, which was accompanied by an increase in expenses (content and internet expenses), the Company recorded a decrease of 16% in operating expenses (OPEX) in 2017 compared to 2016; without the impact of the early adoption of IFRS 15, operating expenses decreased by 13% (a decrease of NIS 294 million compared with 2016). The decrease resulted from close management of the Company's cost structure and its assets, including the cost savings from the network sharing agreement with Hot Mobile.

 

In addition, the Company strengthened its balance sheet structure with a continued decrease in net debt to NIS 0.9 billion. Net debt decreased by NIS 620 million during 2017, which, together with the early repayments and the debt recycle, led to a reduction in the average interest rate of the Company's debt and to a net debt to EBITDA ratio of 1 at year-end. The change in the Company's debt structure and its reduction will result in a significant reduction of financing expenses (excluding the one-time debt repayment expenses) and provides a strong foundation to support the Company's continued development in the coming years.

 

The increase in CAPEX in 2017, without the impact of IFRS 15, totaled NIS 104 million compared to 2016, mainly resulting from the increased deployment of the fiber optic infrastructure and from the Company's entry into TV operations, which constitute growth potential in the Company's revenues in the coming years."

 

NIS Million	Q3’17	Q4’17	Comments
Service Revenues	666	630	The decrease resulted mainly from cellular seasonal roaming revenues
Equipment Revenues	160	204	The increase resulted mainly from higher cellular equipment volume and a higher average sale price
Total Revenues	826	834
Gross profit from equipment sales	43	40	Change in product mix with lower profit per device
OPEX	477	519	Increase in expenses mainly related to the Company's TV and internet services, periodic payroll & related expenses and a nonrecurring decrease in site-rental expenses in Q3 2017
Adjusted EBITDA	239	158
Profit (loss) for the Period	54	(50)	The company recorded one-time expenses of NIS 65 million in Q4 2017 as a result of early loans repayments (as reported on December 5, 2017), partially offset by nonrecurring tax income of NIS 19 million
Capital Expenditures (additions)	107	174	The increase resulted mainly from increase in investments related to fiber optic deployment and TV services
Adjusted free cash flow (before interest payments)	202	63	The decrease resulted mainly from a decrease in EBITDA and a smaller decrease in operating assets and liabilities
Net Debt	887	906

 

	Q3’17	Q4’17	Comments
Cellular Post-Paid Subscribers (end of period, thousands)	2,306	2,320	Increase of 14 thousand subscribers
Cellular Pre-Paid Subscribers end of period, thousands)	371	354	Decrease of 17 thousand subscribers
Monthly Average Revenue per Cellular User (ARPU) (NIS)	64	59	Mainly the result of higher seasonal roaming revenues in Q3 2017
Quarterly Cellular Churn Rate (%)	9.3%	9.9%	The increase resulted from an increase in Pre-Paid subscriber churn

 

 

NIS MILLION (except EPS)	2013	2014	20153	2016	2017 w/o IFRS 15*	2017 Reported*
Revenues	4,519	4,400	4,111	3,544	3,270	3,268
Cost of revenues	3,510	3,419	3,472	2,924	2,627	2,627
Gross profit	1,009	981	639	620	643	641
S,G&A	679	631	640	689	536	465
Income with respect to settlement agreement with Orange			61	217	108	108
Other income	79	50	47	45	31	31
Operating profit	409	400	107	193	246	315
Finance costs, net	211	159	143	105	180	180
Income tax expenses	63	79	4	36	5	21
Profit (loss) for the year	135	162	(40)	52	61	114
Earnings (loss) per share (basic, NIS)	0.87	1.04	(0.26)	0.33	0.38	0.70

 

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NIS MILLION (except EPS)	Q4’16	Q1’17*	Q2’17*	Q3’17*	Q4’17*
Revenues	821	803	805	826	834
Cost of revenues	706	654	637	625	711
Gross profit	115	149	168	201	123
S,G&A	171	107	112	116	130
Income with respect to settlement agreement with Orange	54	54	54	-	-
Other income	10	9	8	7	7
Operating profit	8	105	118	92	0
Finance costs, net	23	23	54	15	88
Income tax expenses (income)	(8)	18	18	23	(38)
Profit (loss) for the period	(7)	64	46	54	(50)
Earnings (loss) per share (basic, NIS)	(0.04)	0.41	0.29	0.32	(0.30)

 

NIS MILLION (except EPS)	Q4'16	Q4'17*	% Change
Revenues	821	834	+2%
Cost of revenues	706	711	+1%
Gross profit	115	123	+7%
Operating profit	8	0	N/A
Loss for the period	(7)	(50)
Loss per share (basic, NIS)	(0.04)	(0.30)

 

*The Company adopted IFRS 15 from the beginning of 2017. For more information see the Company’s Annual Report on Form 20-F for the year ended December 31, 2017.

 

 

	2013	2014	2015	2016	2017 w/o IFRS 15*	2017 Reported*
Adjusted EBITDA (NIS million)	1,114	1,096	876	834	835	917
Adjusted EBITDA (as a % of total revenues)	25%	25%	21%	24%	26%	28%
Adjusted Free Cash Flow (NIS millions)	1,041	520	566	758	599	599
Cellular Subscribers (end of period, thousands)	2,956	2,837	2,718	2,686	2,674	2,674
Estimated Cellular Market Share (%)	29%	28%	27%	26%	25%	25%
Annual Cellular Churn Rate (%)	39%	47%	46%	40%	38%	38%
Average Monthly Revenue per Cellular Subscriber (ARPU) (NIS)	83	75	69	65	62	62

 

 

	Q4'16	Q4'17*	Change
Adjusted EBITDA (NIS million)	164	158	-4%
Adjusted EBITDA (as a % of total revenues)	20%	19%	-1
Cellular Subscribers (end of period, thousands)	2,686	2,674	-12
Quarterly Cellular Churn Rate (%)	9.4%	9.9%	+0.5
Monthly Average Revenue per Cellular User (ARPU) (NIS)	62	59	-3

 

*The Company adopted IFRS 15 from the beginning of 2017. For more information see the Company’s Annual Report on Form 20-F for the year ended December 31, 2017.

 

 

	Cellular Segment			Fixed-Line Segment			Elimination		Consolidated
NIS Million	2017*	2016	Change %	2017*	2016	Change %	2017*	2016	2017*	2016	Change %
Total Revenues	2,588	2,828	-8%	853	929	-8%	(173)	(213)	3,268	3,544	-8%
Service Revenues	1,978	2,099	-6%	777	866	-10%	(173)	(213)	2,582	2,752	-6%
Equipment Revenues	610	729	-16%	76	63	+21%	-	-	686	792	-13%
Operating Profit	244	68	+259%	71	125	-43%	-	-	315	193	+63%
Adjusted EBITDA	710	562	+26%	207	272	-24%	-	-	917	834	+10%

	Cellular Segment			Fixed-Line Segment			Elimination		Consolidated
NIS Million	Q4'17*	Q4'16	Change %	Q4'17*	Q4'16	Change %	Q4'17*	Q4'16	Q4'17*	Q4'16	Change %
Total Revenues	660	656	+1%	219	216	+1%	(45)	(51)	834	821	+2%
Service Revenues	478	498	-4%	197	205	-4%	(45)	(51)	630	652	-3%
Equipment Revenues	182	158	+15%	22	11	+100%	-	-	204	169	+21%
Operating Profit (loss)	2	(10)	N/A	(2)	18	N/A	-	-	0	8	N/A
Adjusted EBITDA	124	109	+14%	34	55	-38%	-	-	158	164	-4%

* The Company adopted IFRS 15 from the beginning of 2017. For more information see the Company’s Annual Report on Form 20-F for the year ended December 31, 2017.

 

 

 

In 2017, total revenues were NIS 3,268 million (US$ 943 million), a decrease of 8% from NIS 3,544 million in 2016.

 

Annual service revenues in 2017 totaled NIS 2,582 million (US$ 745 million), a decrease of 6% from NIS 2,752 million in 2016.

 

Service revenues for the cellular segment in 2017 totaled NIS 1,978 million (US$ 571 million), a decrease of 6% from NIS 2,099 million in 2016.  The decrease was mainly a result of the continued downward pressures on the prices of Post-Paid and Pre-Paid cellular services as a result of the continued competition in the cellular market. In addition, cellular segment service revenues were negatively affected by a decline in revenues as a result of the termination of the Right of Use Agreement with HOT Mobile from the second quarter of 2016, for which the Company recorded revenues in an amount of approximately NIS 51 million in 2016.

 

Service revenues for the fixed-line segment in 2017 totaled NIS 777 million (US$ 224 million), a decrease of 10% from NIS 866 million in 2016. This decrease mainly reflected a decrease in revenues from international calling services (including the market for wholesale international traffic) which were adversely affected both by the increased penetration of internet-based solutions and increased competition from other service providers, and a decrease in inter-segment revenues.

 

In Q4 2017, total revenues were NIS 834 million (US$ 241 million), an increase of 2% from NIS 821 million in Q4 2016.

 

Service revenues in Q4 2017 totaled NIS 630 million (US$ 182 million), a decrease of 3% from NIS 652 million in Q4 2016.

 

Service revenues for the cellular segment in Q4 2017 totaled NIS 478 million (US$ 138 million), a decrease of 4% from NIS 498 million in Q4 2016. The decrease was mainly the result of the continued price erosion of cellular services (both Post-Paid and Pre-Paid) due to the continued competitive market conditions.

 

Service revenues for the fixed-line segment in Q4 2017 totaled NIS 197 million (US$ 57 million), a decrease of 4% from NIS 205 million in Q4 2016. The decrease reflected the continuing decrease in revenues from international calling services.

 

Equipment revenues in 2017 totaled NIS 686 million (US$ 198 million), a decrease of 13% from NIS 792 million in 2016, largely reflecting the downward impact of the tightening of the Company’s customer credit policy on the volume of sales.

 

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Gross profit from equipment sales in 2017 was NIS 142 million (US$ 41 million), compared with NIS 144 million in 2016, a decrease of 1%, reflecting a decrease in gross profit from equipment sales for the cellular segment which was partially offset by an increase in gross profit from equipment sales for the fixed-line segment.

 

Equipment revenues in Q4 2017 totaled NIS 204 million (US$ 59 million), an increase of 21% from NIS 169 million in Q4 2016, largely reflecting an increase in the volume of sales of cellular equipment and fixed-line business equipment.

 

Gross profit from equipment sales in Q4 2017 was NIS 40 million (US$ 12 million), compared with NIS 18 million in Q4 2016, an increase of 122%, mainly reflecting higher profit margins from sales due to a change in the product mix.

 

Total operating expenses (‘OPEX’) totaled NIS 1,946 million (US$ 561 million) in 2017. Without the impact of the early adoption of IFRS 15 in 2017, total operating expenses would have been NIS 2,030 million, a decrease of 13% or NIS 294 million from 2016. This decrease mainly reflected a decline in expenses related to the cellular network - largely reflecting the impact of the network sharing agreement with Hot Mobile; a decrease in international calls expenses, a decrease in bad debts and allowance for doubtful accounts expenses which was mainly a result of the impact of the tightening of the Company’s customer credit policy for handset sales; a decrease in advertising and marketing expenses; and a decrease in other expense items reflecting the impact of various efficiency measures undertaken; which were partially offset by additional expenses relating to the Company's TV and internet services. Including depreciation and amortization expenses and other expenses (mainly amortization of employee share based compensation), OPEX in 2017 without the impact of the early adoption of IFRS 15 would have decreased by 12% compared with 2016, mainly for the same reasons as explained above.

 

For Q4 2017, total operating expenses (‘OPEX’) totaled NIS 519 million (US$ 150 million). Without the impact of the early adoption of IFRS 15 in 2017, total operating expenses would have been NIS 547 million in Q4 2017, a decrease of 4% or NIS 23 million from Q4 2016. The decrease mainly reflected a decline in expenses related to the cellular network and a decrease in bad debts and allowance for doubtful accounts expenses in 2017 and one-time expenses totaling NIS 19 million in Q4 2016, partially offset by additional expenses relating to the Company's TV and internet services. Including depreciation and amortization expenses and other expenses (mainly amortization of employee share based compensation), OPEX without the impact of the early adoption of IFRS 15 in 2017 would have decreased by 3% in Q4 2017 compared with Q4 2016, mainly for the same reasons as explained above.

 

In 2017, the Company recorded income with respect to the settlement agreement of the Orange brand agreement in an amount of NIS 108 million (US$ 31 million) compared with NIS 217 million recorded in 2016.  2017 is the final year for which the Company will record income with respect to the settlement agreement of the Orange brand agreement.

 

 

Operating profit for 2017 was NIS 315 million (US$ 91 million). Without the impact of the early adoption of IFRS 15 in 2017, operating profit would have been NIS 246 million, an increase of 27% compared with NIS 193 million in 2016.

 

For Q4 2017, operating profit was zero. Without the impact of the early adoption of IFRS 15 in 2017, there would have been an operating loss of NIS 18 million in Q4 2017, compared with an operating profit of NIS 8 million in Q4 2016.

 

Adjusted EBITDA in 2017 totaled NIS 917 million (US$ 264 million), 28% of revenues. Without the impact of the early adoption of IFRS 15 in 2017, Adjusted EBITDA would have been NIS 835 million, 26% of revenues, approximately unchanged compared with NIS 834 million in 2016, 24% of revenues.

 

Adjusted EBITDA for the cellular segment in 2017 was NIS 710 million (US$ 205 million), 27% of revenues. Without the impact of the early adoption of IFRS 15 in 2017, Adjusted EBITDA for the cellular segment would have been NIS 647 million, 25% of revenues, an increase of 15% from NIS 562 million in 2016, 20% of revenues. The increase reflected the decrease in total operating expenses, partially offset by the impact of the decreases in service revenues, in income with respect to the settlement agreement with Orange, and in gross profits from cellular segment equipment sales.

 

Adjusted EBITDA for the fixed-line segment was NIS 207 million (US$ 60 million) in 2017, 24% of revenues. Without the impact of the early adoption of IFRS 15 in 2017, Adjusted EBITDA for the fixed-line segment would have been NIS 188 million, 22% of revenues, a decrease of 31% from NIS 272 million in 2016, 29% of revenues. The decrease mainly reflected the decrease in service revenues and the increase in total operating expenses, partially offset by the increase in gross profit from equipment sales.

 

For Q4 2017, Adjusted EBITDA totaled NIS 158 million (US$ 46 million), 19% of revenues. Without the impact of the early adoption of IFRS 15 in 2017, Adjusted EBITDA would have been NIS 132 million in Q4 2017, 16% of revenues, a decrease of 20% from NIS 164 million in Q4 2016 or 20% of revenues.

 

Adjusted EBITDA for the cellular segment in Q4 2017 was NIS 124 million (US$ 36 million), 19% of revenues. Without the impact of the early adoption of IFRS 15 in 2017, Adjusted EBITDA for the cellular segment would have been NIS 108 million in Q4 2017, 16% of revenues, approximately unchanged compared with NIS 109 million in Q4 2016, 17% of revenues. The stability reflected the decrease in OPEX and the increase in gross profit from equipment sales, which were offset by the decrease in income with respect to the settlement agreement with Orange and the decrease in service revenues.

 

Adjusted EBITDA for the fixed-line segment in Q4 2017 was NIS 34 million (US$ 10 million), 16% of revenues. Without the impact of the early adoption of IFRS 15 in 2017, Adjusted EBITDA for the fixed-line segment would have been NIS 24 million in Q4 2017, 11% of revenues, a decrease of 56% from NIS 55 million in Q4 2016, 25% of revenues. The decrease mainly reflected the increase in OPEX resulting from the launch of the TV services, partly offset by a decline in expenses related to international calling services.

 

 

Finance costs, net in 2017 were NIS 180 million (US$ 52 million), an increase of 71% compared with NIS 105 million in 2016. The increase largely reflected the impact of the increase in early debt repayment expenses in 2017 compared with 2016, of NIS 82 million, which was mainly related to the early repayment of borrowings during 2017 in a total amount of NIS 1,283 million (US$ 370 million).

 

Finance costs, net, are expected to be significantly lower in 2018 than in 2017, both reflecting the early debt repayment expenses recorded in 2017 as well as anticipated lower interest expenses as a result of the lower average level of financial debt and a lower average debt interest rate.

 

For Q4 2017, finance costs, net were NIS 88 million (US$ 25 million), an increase of 65 million compared with NIS 23 million in Q4 2016. The increase reflected the one time early repayment costs of NIS 65 million recorded in Q4 2017.

 

Income tax expenses for 2017 were NIS 21 million (US$ 6 million). Without the impact of the early adoption of IFRS 15 in 2017, income tax expenses on profit would have been NIS 5 million compared with NIS 36 million in 2016. An income tax audit of the Company, concluded in 2017, resulted in one-time income of NIS 10 million in income tax expenses and in an additional one-time deferred tax income of NIS 9 million, which was recognized in income tax expenses.

 

Overall, the company's profit in 2017 was NIS 114 million (US$ 33 million). Without the impact of the early adoption of IFRS 15 in 2017, profit would have been NIS 61 million, an increase of 17% compared with profit of NIS 52 million in 2016.

 

For Q4 2017, loss was NIS 50 million (US$ 14 million). Without the impact of the early adoption of IFRS 15 in 2017, loss would have been NIS 64 million in Q4 2017, compared with a loss of NIS 7 million in Q4 2016.

 

Based on the weighted average number of shares outstanding during 2017, basic earnings per share or ADS, was NIS 0.70 (US$ 0.20). Without the impact of the early adoption of IFRS 15 in 2017, basic earnings per share or ADS would have been NIS 0.38 compared with NIS 0.33 in 2016.

 

For Q4 2017, based on the weighted average number of shares outstanding during Q4 2017, basic loss per share or ADS, was NIS 0.30 (US$ 0.08). Without the impact of the early adoption of IFRS 15 in 2017, basic loss per share or ADS would have been NIS 0.38 in Q4 2017, compared with basic loss per share or ADS of NIS 0.04 in Q4 2016.

 

 

At the end of 2017, the Company's cellular subscriber base (including mobile data and 012 Mobile subscribers) was approximately 2.67 million including approximately 2.32 million Post-Paid subscribers or 87% of the base, and approximately 354,000 Pre-Paid subscribers, or 13% of the subscriber base.

 

 

Over 2017, the cellular subscriber base declined by approximately 12,000. The Pre-Paid subscriber base decreased by approximately 91,000, while the Post-Paid subscriber base increased by approximately 79,000. The decrease in the Pre-Paid subscriber base was largely attributed to Pre-Paid subscribers moving to Post-Paid subscriber packages as a result of the significant price difference of these products, as well as to increased competition for Pre-Paid subscribers.

 

The annual churn rate for cellular subscribers in 2017 was 38%, a decrease of 2 percentage points compared with 40% in 2016, and 46% in 2015.

 

The monthly Average Revenue per User (“ARPU”) for cellular subscribers in 2017 was NIS 62 (US$ 18), a decrease of 5% from NIS 65 in 2016. The decrease mainly reflected the continued price erosion in cellular services due to the persistent competition in the cellular market, as well as a decrease in revenues as a result of the termination of the Right of Use Agreement with HOT Mobile from the second quarter of 2016.

 

Total cellular market share (based on the number of subscribers) at the end of 2017 was estimated to be approximately 25%, a slight decrease from 26% at 2016 year-end.

 

During Q4 2017, the cellular subscriber base declined by approximately 3,000 subscribers. The Post-Paid subscriber base increased by approximately 14,000 subscribers, while the Pre-Paid subscriber base declined by approximately 17,000 subscribers.

 

The quarterly churn rate for cellular subscribers in Q4 2017 was 9.9%, compared with 9.4% in Q4 2016.

 

For Q4 2017, ARPU for cellular subscribers was NIS 59 (US$ 17), a decrease of 5% from NIS 62 in Q4 2016.

 

 

In 2017, Adjusted Free Cash Flow totaled NIS 599 million (US$ 173 million), an increase of 21% from NIS 758 million in 2016.

 

Cash generated from operations totaled NIS 973 million (US$ 281 million) in 2017. Without the impact of the early adoption of IFRS 15 in 2017, cash generated from operations would have been NIS 897 million compared with NIS 945 million in 2016, a decrease of 5%. The decrease mainly reflected the payment by HOT Mobile in 2016 of the lump sum of NIS 250 million under the Network Sharing Agreement, partially offset by an increase in trade payables balances and by a larger decrease in trade receivables, which was mainly related to the decrease in the volume of equipment sales under long-term payment plans in 2017 compared with 2016.

 

Cash capital expenditures (CAPEX payments), as represented by cash flows used for the acquisition of property and equipment and intangible assets, were NIS 376 million (US$ 108 million) in 2017. Without the impact of the early adoption of IFRS 15 in 2017, cash capital expenditures would have been NIS 300 million, an increase of 53% from NIS 196 million in 2016. The increase mainly reflected the increase in investments related to fiber deployment and TV services.

 

 

For Q4 2017, Adjusted Free Cash Flow totaled NIS 63 million (US$ 18 million), a decrease of 77% from NIS 269 million in Q4 2016. Excluding the impact of the NIS 180 million payment received from Hot Mobile in Q4 2016 as part of lump sum, Adjusted Free Cash Flow decreased by 29%.

 

Cash generated from operations totaled NIS 176 million (US$ 51 million) in Q4 2017. Without the impact of the early adoption of IFRS 15 in 2017, cash generated from operations would have been NIS 151 million in Q4 2017, a decrease of 52% from NIS 313 million in Q4 2016. The decrease mainly reflected the one-time payment received from HOT Mobile in an amount of NIS 180 million in Q4 2016 as explained above.

 

Cash capital expenditures (‘CAPEX payments’), as represented by cash flows used for the acquisition of property and equipment and intangible assets, were NIS 113 million (US$ 33 million) in Q4 2017. Without the impact of the early adoption of IFRS 15 in 2017, cash capital expenditures would have been NIS 88 million in Q4 2017, an increase of 87% from NIS 47 million in Q4 2016. The increase mainly reflected the increase in investments related to fiber deployment and TV services.

 

The level of Net Debt at the end of 2017 amounted to NIS 906 million (US$ 261 million), compared with NIS 1,526 million at the end of 2016.

 

 

Partner will hold a conference call on Thursday, March 29, 2018 at 10.00AM Eastern Time / 5.00PM Israel Time.

 

To join the call, please dial the following numbers (at least 10 minutes before the scheduled time):

 

International: +972.3.918.0610

North America toll-free: +1.888.407.2553

 

A live webcast of the call will also be available on Partner's Investors Relations website at: www.partner.co.il/en/Investors-Relations/lobby/

 

If you are unavailable to join live, the replay of the call will be available from March 29, 2018 until April 19, 2018, at the following numbers:

 

International: +972.3.925.5925

North America toll-free: +1.888.782.4291

 

In addition, the archived webcast of the call will be available on Partner's Investor Relations website at the above address for approximately three months.

 

 

This press release includes forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, as amended, Section 21E of the US Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Words such as "estimate", “believe”, “anticipate”, “expect”, “intend”, “seek”, “will”, “plan”, “could”, “may”, “project”, “goal”, “target” and similar expressions often identify forward-looking statements but are not the only way we identify these statements. Specific statements have been made regarding the Company's intention to continue to expand its offering of full communication solutions over its independent infrastructure, the Company's future development as a result of the change in the Company's debt structure and its reduction and the growth potential in the Company’s revenues as a result of the increased deployment of the Company's fiber optic infrastructure and from the Company's entry in TV operations. In addition, all statements other than statements of historical fact included in this press release regarding our future performance are forward-looking statements. We have based these forward-looking statements on our current knowledge and our present beliefs and expectations regarding possible future events. These forward-looking statements are subject to risks, uncertainties and assumptions, including, with respect to the increased fiber cable deployment, whether the Ministry of Communications’ instruction to Bezeq to allow other domestic operators (including Partner) to deploy fiber optic cables using Bezeq's passive infrastructure (including use of the manholes that are situated in front of buildings) will be respected or enforced and whether the Company will have the financial resources needed to continue to increase the number of customers served by its fiber optic infrastructure. The future results may differ materially from those anticipated herein. For further information regarding risks, uncertainties and assumptions about Partner, trends in the Israeli telecommunications industry in general, the impact of current global economic conditions and possible regulatory and legal developments, and other risks we face, see “Item 3. Key Information - 3D. Risk Factors”, “Item 4. Information on the Company”, “Item 5. Operating and Financial Review and Prospects”, “Item 8. Financial Information - 8A. Consolidated Financial Statements and Other Financial Information - 8A.1 Legal and Administrative Proceedings” and “Item 11. Quantitative and Qualitative Disclosures about Market Risk” in the Company’s Annual Reports on Form 20-F filed with the SEC, as well as its immediate reports on Form 6-K furnished to the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

The quarterly financial results presented in this press release are unaudited financial results.

 

The results were prepared in accordance with IFRS, other than the non-GAAP financial measures presented in the section, “Use of Non-GAAP Financial Measures”.

 

The financial information is presented in NIS millions (unless otherwise stated) and the figures presented are rounded accordingly.

 

The convenience translations of the New Israeli Shekel (NIS) figures into US Dollars were made at the rate of exchange prevailing at December 31, 2017: US $1.00 equals NIS 3.467. The translations were made purely for the convenience of the reader.

 

 

The following non-GAAP measures are used in this report. These measures are not financial measures under IFRS and may not be comparable to other similarly titled measures for other companies. Further, the measures may not be indicative of the Company’s historic operating results nor are meant to be predictive of potential future results.

 

Non-GAAP Measure	Calculation	Most Comparable IFRS Financial Measure
Adjusted EBITDA*                   Adjusted EBITDA margin (%)	Adjusted EBITDA: Profit (Loss) add Income tax expenses, Finance costs, net, Depreciation and amortization expenses (including amortization of intangible assets, deferred expenses-right of use and impairment charges), Other expenses (mainly amortization of share based compensation)   Adjusted EBITDA margin (%): Adjusted EBITDA divided by Total revenues	Profit (Loss)
Adjusted Free Cash Flow**	Adjusted Free Cash Flow: Cash flows from operating activities deduct Cash flows from investing activities add Short-term investment in (proceeds from) deposits	Cash flows from operating activities deduct Cash flows from investing activities
Total Operating Expenses (OPEX)	Total Operating Expenses: Cost of service revenues add Selling and marketing expenses add General and administrative expenses deduct Depreciation and amortization expenses, Other expenses (mainly amortization of employee share based compensation)	Sum of: Cost of service revenues, Selling and marketing expenses, General and administrative expenses
Net Debt	Net Debt: Current maturities of notes payable and borrowings add Notes payable add Borrowings from banks and others deduct Cash and cash equivalents deduct Short-term deposits	Sum of: Current maturities of notes payable and borrowings, Notes payable, Borrowings from banks and others
Various line items “without the impact of the early adoption of IFRS 15”	Line item less the amount of the impact of the early adoption of IFRS 15	The corresponding line item as reported in the Company’s financial statements and in this press release

 

 

 

Partner Communications Company Ltd. is a leading Israeli provider of communications services (cellular, fixed-line telephony, internet and television services). Partner’s ADSs are quoted on the NASDAQ Global Select Market™ and its shares are traded on the Tel Aviv Stock Exchange (NASDAQ and TASE: PTNR).

 

For more information about Partner, see: http://www.partner.co.il/en/Investors-Relations/lobby

 

Contacts:

Tamir Amar Chief Financial Officer Tel: +972-54-781-4951

Liat Glazer Shaft Head of Investor Relations and Corporate Projects Tel: +972-54-781-5051 E-mail: investors@partner.co.il

 

(An Israeli Corporation)

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

		New Israeli Shekels								Convenience translation into U.S. dollars
		December 31,
		2016					2017*				2017*
		In millions
CURRENT ASSETS
Cash and cash equivalents			716				867				250
Short-term deposits			452				150				43
Trade receivables			990				808				233
Other receivables and prepaid expenses			57				48				14
Deferred expenses – right of use			28				43				12
Inventories			96				93				27
			2,339				2,009				579
NON CURRENT ASSETS
Trade receivables			333				232				68
Prepaid expenses and other			2				5				1
Deferred expenses – right of use			75				133				38
Property and equipment			1,207				1,180				340
Intangible and other assets			793				697				201
Goodwill			407				407				117
Deferred income tax asset			41				55				17
			2,858				2,709				782
TOTAL ASSETS			5,197				4,718				1,361

* See appendix 'Effect of IFRS15 implementation' and report 20-F regarding the early adoption of IFRS 15, Revenue from Contracts with Customers.

 

 

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

		New Israeli Shekels								Convenience translation into U.S. dollars
		December 31,
		2016					2017***				2017***
		In millions
CURRENT LIABILITIES
Current maturities of notes payable and borrowings			498				705				203
Trade payables			681				787				227
Payables in respect of employees			101				91				26
Other payables (mainly institutions)			28				31				9
Income tax payable			45				50				14
Deferred income with respect to settlement
agreement with Orange			108
Deferred revenues from HOT mobile			31				31				9
Other deferred revenues			38				41				12
Provisions			77				75				22
			1,607				1,811				522
NON CURRENT LIABILITIES
Notes payable			646				975				281
Borrowings from banks and others			1,550				243				69
Liability for employee rights upon retirement, net			39				40				12
Dismantling and restoring sites obligation			35				27				9
Deferred revenues from HOT mobile			195				164				47
Other non-current liabilities			14				24				7
			2,479				1,473				425
TOTAL LIABILITIES			4,086				3,284				947
EQUITY
Share capital – ordinary shares of NIS 0.01 par value:
authorized – December 31, 2016 and 2017 – 235,000,000 shares;  issued and outstanding -			2				2				1
December 31, 2016 – *156,993,337 shares
December 31, 2017 –*168,243,913 shares
Capital surplus			1,034				1,164				336
Accumulated retained earnings			358				491				142
Treasury shares, at cost –
December 31, 2016 – **3,603,578 shares
December 31, 2017 – **2,850,472 shares			(283	)			(223	)			(65	)
TOTAL EQUITY			1,111				1,434				414
TOTAL LIABILITIES AND EQUITY			5,197				4,718				1,361

 

 

 

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

														Convenience
														translation
		New Israeli Shekels												into U.S. dollars
		Year ended December 31
		2015				2016				2017*				2017*
		In millions (except earnings per share)
Revenues, net			4,111				3,544				3,268				943
Cost of revenues			3,472				2,924				2,627				758
Gross profit			639				620				641				185
Selling and marketing expenses			417				426				269				78
General and administrative expenses			223				263				196				56
Income with respect to settlement agreement with Orange			61				217				108				31
Other income, net			47				45				31				9
Operating profit			107				193				315				91
Finance income			13				13				4				1
Finance expenses			156				118				184				53
Finance costs, net			143				105				180				52
Profit (loss) before income tax			(36	)			88				135				39
Income tax expenses			4				36				21				6
Profit (loss) for the year			(40	)			52				114				33
Earnings (loss) per share
Basic			(0.26	)			0.33				0.70				0.20
Diluted			(0.26	)			0.33				0.69				0.20

 

* See appendix 'Effect of IFRS15 implementation' and report 20-F regarding the early adoption of IFRS 15, Revenue from Contracts with Customers.

 

 

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

CONDENSED CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

		New Israeli Shekels												Convenience translation into U.S. dollars
		Year ended December 31
		2015				2016					2017**				2017**
		In millions
Profit (loss) for the year			(40	)			52				114				33
Other comprehensive income (loss), items that will not be reclassified to profit or loss
Remeasurements of post-employment benefit obligations			5				(8	)			(2	)			*
Income taxes relating to remeasurements of post-employment benefit obligations			(1	)			2				1				*
Other comprehensive income (loss) for the year, net of income taxes			4				(6	)			(1	)			*
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR			(36	)			46				113				33

 

*   Representing an amount of less than 1 million.

** See appendix 'Effect of IFRS15 implementation' and report 20-F regarding the early adoption of IFRS 15, Revenue from Contracts with Customers.

 

 

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

SEGMENT INFORMATION & ADJUSTED EBITDA RECONCILIATION

 

		New Israeli Shekels
		Year ended December 31, 2017*
		In millions
		Cellular segment				Fixed-line segment				Elimination				Consolidated
Segment revenue - Services			1,960				622								2,582
Inter-segment revenue - Services			18				155				(173	)
Segment revenue - Equipment			610				76								686
Total revenues			2,588				853				(173	)			3,268
Segment cost of revenues - Services			1,470				613								2,083
Inter-segment cost of  revenues- Services			154				19				(173	)
Segment cost of revenues - Equipment			490				54								544
Cost of revenues			2,114				686				(173	)			2,627
Gross profit			474				167								641
Operating expenses (3)			367				98								465
Income with respect to settlement agreement with Orange			108												108
Other income, net			29				2								31
Operating profit			244				71								315
Adjustments to presentation of segment Adjusted EBITDA
–Depreciation and amortization			445				135
–Other (1)			21				1
Segment Adjusted EBITDA (2)			710				207

 

		New Israeli Shekels
		Year ended December 31, 2017*
		In millions
Reconciliation of segments subtotal Adjusted EBITDA to profit for the year
Segments subtotal Adjusted EBITDA (2)			917
Depreciation and amortization			(580	)
Finance costs, net			(180	)
Income tax expenses			(21	)
Other (1)			(22	)
Profit for the year			114

 

* See appendix 'Effect of IFRS15 implementation' and report 20-F regarding the early adoption of IFRS 15, Revenue from Contracts with Customers. In 2017 costs of obtaining contracts with customers were capitalized in amounts of NIS 64 million and NIS 20 million for the cellular segment and the fixed-line segment, respectively. The adoption of IFRS15 resulted in an increase in amortization expenses in 2017 for the cellular segment and the fixed-line segment in amounts of NIS 11 million and NIS 2 million, respectively.

 

 

PARTNER COMMUNICATIONS COMPANY LTD.

(An Israeli Corporation)

SEGMENT INFORMATION & ADJUSTED EBITDA RECONCILIATION

 

		New Israeli Shekels
		Year ended December 31, 2016
		In millions
		Cellular segment				Fixed-line segment				Elimination				Consolidated
Segment revenue - Services			2,080				672								2,752
Inter-segment revenue - Services			19				194				(213	)
Segment revenue - Equipment			729				63								792
Total revenues			2,828				929				(213	)			3,544
Segment cost of revenues - Services			1,659				617								2,276
Inter-segment cost of  revenues- Services			192				21				(213	)
Segment cost of revenues - Equipment			596				52								648
Cost of revenues			2,447				690				(213	)			2,924
Gross profit			381				239								620
Operating expenses (3)			571				118								689
Income with respect to settlement agreement with Orange			217												217
Other income, net			41				4								45
Operating profit			68				125								193
Adjustments to presentation of segment Adjusted EBITDA
–Depreciation and amortization			447				148
–Other (1)			47				(1	)
Segment Adjusted EBITDA (2)			562				272

		New Israeli Shekels
		Year ended December 31, 2016
		In millions
Reconciliation of segments subtotal Adjusted EBITDA to profit for the year
Segments subtotal Adjusted EBITDA (2)			834
Depreciation and amortization			(595	)
Other (1)			(46	)
Finance costs, net			(105	)
Income tax expenses			(36	)
Profit for the year			52

 

(1)  Mainly amortization of employee share based compensation.

(2) Adjusted EBITDA as reviewed by the CODM represents Earnings Before Interest (finance costs, net), Taxes, Depreciation and Amortization (including amortization of intangible assets, deferred expenses-right of use and impairment charges) and Other expenses (mainly amortization of share based compensation). Adjusted EBITDA is not a financial measure under IFRS and may not be comparable to other similarly titled measures for other companies. Adjusted EBITDA may not be indicative of the Group's historic operating results nor is it meant to be predictive of potential future results. The usage of the term "Adjusted EBITDA" is to highlight the fact that the Amortization includes amortization of deferred expenses – right of use and amortization of employee share based compensation and impairment charges; it is fully comparable to EBITDA information which has been previously provided for prior periods.

(3) Operating expenses include selling and marketing expenses and general and administrative expenses.

 

 

  PARTNER COMMUNICATIONS COMPANY LTD.

   (An Israeli Corporation)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		New Israeli shekels																Convenience translation into U.S. dollars
		12 month period ended December 31,								3 month period ended December 31								12 month period ended December 31,				3 month period ended December 31,
		2016				2017**				2016				2017**				2017**				2017**
		(Audited)				(Audited)				(Unaudited)				(Unaudited)				(Audited)				(Unaudited)
		In millions
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash generated from operations (Appendix)			975				1,002				323				198				288				57
Income tax paid			(30	)			(29	)			(10	)			(22	)			(8	)			(6	)
Net cash provided by operating activities			945				973				313				176				280				51
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment			(127	)			(223	)			(30	)			(77	)			(64	)			(22	)
Acquisition of intangible and other assets			(69	)			(153	)			(17	)			(36	)			(44	)			(11	)
Proceeds from (investment in) short-term deposits, net			(452	)			302				(452	)							87
Interest received			2				2								*				1				*
Proceeds from sale of property and equipment			7				*				3				*				*				*
Net cash used in investing activities			(639	)			(72	)			(496	)			(113	)			(20	)			(33	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Share issuance							190												55
Repayment of current borrowings											(52	)
Proceeds from issuance of notes payable, net of issuance costs							650								398				187				115
Interest paid			(108	)			(165	)			(28	)			(80	)			(48	)			(23	)
Non-current borrowings received			250				350				250				350				101				101
Repayment of non-current borrowings			(15	)			(1,332	)			(4	)			(431	)			(384	)			(124	)
Repayment of notes payables			(643	)			(443	)			(408	)			(443	)			(128	)			(128	)
Net cash used in financing activities			(516	)			(750	)			(242	)			(206	)			(217	)			(59	)
INCREASE (DECREASE) IN CASH AND CASH  EQUIVALENTS			(210	)			151				(425	)			(143	)			43				(41	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			926				716				1,141				1,010				207				291
CASH AND CASH EQUIVALENTS AT END OF PERIOD			716				867				716				867				250				250

 

*   Representing an amount of less than 1 million.

** See appendix 'Effect of IFRS15 implementation' and report 20-F regarding the early adoption of IFRS 15, Revenue from Contracts with Customers.

 

 

  PARTNER COMMUNICATIONS COMPANY LTD.

   (An Israeli Corporation)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

Appendix - Cash generated from operations and supplemental information

 

		New Israeli shekels																Convenience translation into U.S. dollars
		12 month period ended December 31,								3 month period ended December 31,								12 month period ended December 31,				3 month period ended December 31,
		2016				2017**				2016				2017**				2017**				2017**
		(Audited)				(Audited)				(Unaudited)				(Unaudited)				(Audited)				(Unaudited)
		In millions
Cash generated from operations:
Profit (loss) for the period			52				114				(7	)			(50	)			33				(14	)
Adjustments for:
Depreciation and amortization			565				540				138				141				156				41
Amortization of deferred expenses - Right of use			30				40				9				12				12				4
Employee share based compensation expenses			45				20				9				4				6				1
Liability for employee rights upon retirement, net			(3	)			(1	)							2				*				1
Finance costs, net			1				(2	)			(1	)			1				(1	)			*
Change in fair value of derivative financial instruments			*				*				*				1				*				*
Interest paid			108				165				28				80				47				23
Interest received			(2	)			(2	)			*				*				(1	)			*
Deferred income taxes			10				(13	)			(2	)			(27	)			(4	)			(8	)
Income tax paid			30				29				10				22				8				6
Capital loss (gain) from property and equipment			*				*				(1	)			*				*				*
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable:
Trade			226				283				104				7				82				2
Other			(9	)			6				(17	)			11				2				3
Increase (decrease) in accounts payable and accruals:
Trade			(38	)			69				(35	)			24				20				7
Other payables			*				(3	)			38				46				(1	)			13
Provisions			*				(2	)			6				(3	)			(1	)			(1	)
Deferred revenues with respect to settlement agreement with  Orange			(217	)			(108	)			(54	)							(31	)
Deferred revenues from HOT mobile			227				(31	)			173				(8	)			(9	)			(2	)
Other deferred revenues			10				3				4				(2	)			1				(1	)
Increase in deferred expenses - Right of use			(80	)			(113	)			(28	)			(27	)			(33	)			(8	)
Current income tax liability			(4	)			5				(15	)			(33	)			1				(9	)
Decrease (increase) in inventories			24				3				(36	)			(3	)			1				(1	)
Cash generated from operations			975				1,002				323				198				288				57

 

*   Representing an amount of less than 1 million.

** See appendix 'Effect of IFRS15 implementation' and report 20-F regarding the early adoption of IFRS 15, Revenue from Contracts with Customers.

 

 

The tables below summarize the effects of adoption of IFRS15, Revenue from Contracts with Customers, on the consolidated statement of financial position as at December 31, 2017 and on the consolidated statements of income and cash flows for the twelve and three months periods ended as of the same date. See also report 20-F regarding the early adoption of IFRS15.

Effect of change on consolidated statement of financial position:

 

		New Israeli Shekels in millions
		As of December 31, 2017
		Previous accounting policy				Effect of change				According to IFRS15
		(Audited)
Current assets - other receivables and prepaid expenses  - Contract assets			-				2				2
Non-current assets -  Costs to obtain contracts recognized in intangible assets, net – non-current assets			-				71				71
Deferred income tax asset			71				(16	)			55
Current liabilities - other deferred revenues – Contract liabilities			36				4				40
Equity			1,381				53				1,434

Effect of change on consolidated statement of income:

 

		New Israeli Shekels in millions
		12 months ended December 31, 2017												3 months ended December 31, 2017
		Previous accounting policy				Effect of change				According to IFRS15				Previous accounting policy				Effect of change				According to IFRS15
		(Audited)												(Unaudited)
Selling and marketing expenses			340				(71	)			269				100				(20	)			80
Operating profit			246				69				315				(18	)			18				0
Profit (loss) before income tax			66				69				135				(106	)			18				(88	)
Income tax expenses (income)			5				16				21				(42	)			4				(38	)
Profit (loss) for the period			61				53				114				(64	)			14				(50	)
Depreciation and amortization expenses			567				13				580				145				8				153
Basic earnings (loss) per share			0.38				0.32				0.70				(0.38	)			0.08				(0.30	)
Diluted earnings (loss) per share			0.37				0.32				0.69				(0.38	)			0.08				(0.30	)

Effect of change on consolidated statement cash flows:

 

		New Israeli Shekels in millions
		12 months ended December 31, 2017												3 months ended December 31, 2017
		Previous accounting policy				Effect of change				According to IFRS15				Previous accounting policy				Effect of change				According to IFRS15
		(Audited)																(Unaudited)
Net cash provided by operating activities			897				76				973				151				25				176
Net cash provided by (used in) investing activities			4				(76	)			(72	)			(88	)			(25	)			(113	)

 

Adjusted Free Cash Flow		New Israeli Shekels																Convenience translation into U.S. Dollars				Convenience translation into U.S. Dollars
		12 months period ended December 31,				12 months period ended December 31,				3 months period ended December 31,				3 months period ended December 31,				12 months period ended December 31,				3 months period ended December 31,
		2017*				2016				2017*				2016				2017*				2017*
		(Audited)				(Audited)				(Unaudited)				(Unaudited)				(Audited)				(Unaudited)
		In millions
Net cash provided by operating activities			973				945				176				313				280				51
Net cash used in investing activities			(72	)			(639	)			(113	)			(496	)			(20	)			(33	)
Proceeds from (investment in) short-term deposits			(302	)			452								452				(87	)
Adjusted Free Cash Flow			599				758				63				269				173				18
Interest paid			(165	)			(108	)			(80	)			(28	)			(47	)			(23	)
Adjusted Free Cash Flow After Interest			434				650				(17	)			241				126				(5	)