RAMAT GAN, Israel, March 30,
2017 /PRNewswire/ -- B Communications Ltd. (NASDAQ Global Select Market and TASE: BCOM), a holding company with a
controlling interest in Israel's largest telecommunications provider, Bezeq, The Israel
Telecommunication Corporation Ltd. (TASE: BEZQ), today reported its financial results for the fourth quarter and year ended
December 31, 2016.
"2016 was a great year for B Communications as we improved our financial position significantly. During the year, we upgraded
our Israeli credit rating to AA3, provided our equity investors with an amazing 12% dividend yield, and continued to deleverage
our long term debt structure. We feel very comfortable with Bezeq's 2017 guidance which was released this morning and believe
that during 2017 we will be able to continue to meet our main goals, by continuing to both deleverage our debt and create value
for our shareholders," said Doron Turgeman, CEO of B Communications.
Private Placement of Series C Debentures: On January 11, 2017, the Company completed a
private placement of NIS 118 million par value of its Series C Debentures to Israeli institutional
investors for an aggregate consideration of approximately NIS 118 million ($31 million). The private placement was carried out as an increase to the outstanding Series C Debentures,
which were first issued in September 2016 and have identical terms.
Dividend from Bezeq: On October 6, 2016, Bezeq distributed NIS 665
million ($173 million) to shareholders of record as of September 20,
2016. B Communications' share of the dividend distribution was NIS 175 million ($46 million).
In accordance with Bezeq's dividend policy, its Board of Directors recommended the distribution of 100% of its profits for the
second half of 2016 as a cash dividend of NIS 578 million ($150
million) to its shareholders. The dividend, which is subject to shareholder approval, is expected to be paid on
May 29, 2017 to shareholders of record as of May 16, 2017. B
Communications is expected to receive approximately NIS 152 million ($40
million) if the dividend distribution is approved.
Financial Liabilities and Liquidity: As of December 31, 2016, B Communications'
unconsolidated liquidity balances (comprised of cash and cash equivalents, short term investments and funds deposited in a
pledged account) totaled NIS 435 million ($113 million) and its
financial liabilities totaled NIS 2.6 billion ($677 million),
including NIS 1.9 billion ($489 million) of the Series C Debentures,
NIS 693 million ($180 million) of Series B Debentures (the totals for
both series include accrued interest and unamortized premiums, discounts and debt issuance costs) and a NIS 30 million ($8 million) tax liability.
B Communications' Unconsolidated Balance Sheet Data
(In millions)
|
December 31,
|
December 31,
|
December 31,
|
|
2015
|
2016
|
2016
|
|
NIS
|
NIS
|
US$
|
Financial liabilities
|
|
|
|
7⅜% Senior Secured Notes
|
2,718
|
-
|
-
|
Series B debentures
|
710
|
693
|
180
|
Series C debentures
|
-
|
1,881
|
489
|
Tax liability
|
79
|
30
|
8
|
Total financial liabilities
|
3,507
|
2,604
|
677
|
|
|
|
|
Liquidity
|
|
|
|
Cash and short term investments
|
421
|
388
|
101
|
Pledged account(1)
|
532
|
47
|
12
|
Total liquidity
|
953
|
435
|
113
|
|
|
|
|
Net debt
|
2,554
|
2,169
|
564
|
(1) Account previously pledged as collateral to the security agent for the benefit of the holders of the 7⅜%
Senior Secured Notes (the "Notes"). After the full redemption of the Notes in October 2016, the
Pledged account is solely for the benefit of the holders of the Series C Debentures. According to the indenture for the Series C
Debentures the account is required to include sufficient funds to meet the next interest payment due to the holders of those
debentures.
B Communications Unconsolidated Sources and Uses
(In millions)
|
NIS
|
US$
|
|
|
|
Net debt as of December 31, 2015
|
2,554
|
664
|
|
|
|
Dividends received from Bezeq
|
(379)
|
(98)
|
Net proceeds from the sale of Bezeq shares
|
(978)
|
(254)
|
Financial expenses, net
|
193
|
50
|
One-time refinancing expenses
|
270
|
70
|
Tax provision
|
28
|
7
|
Cross currency swap termination
|
92
|
24
|
Loss from purchase of Notes
|
25
|
7
|
Operating expenses
|
9
|
2
|
Dividend distributions to shareholders
|
355
|
92
|
|
|
|
Net debt as of December 31, 2016
|
2,169
|
564
|
B Communications Fourth Quarter and Full Year Consolidated Financial Results
B Communications' consolidated revenues for the fourth quarter of 2016 totaled NIS 2.5 billion
($651 million), a 3.9% decrease compared to the NIS 2.6 billion
reported in the fourth quarter of 2015. For the full year 2016, B Communications' revenues totaled NIS
10.1 billion ($2.6 billion), a 1.0% increase compared to NIS 10.0
billion reported in 2015. The increase in 2016 was due to the consolidation of Yes beginning in the second quarter of
2015, partially offset by a decrease in revenues in all of the Bezeq Group's segments and primarily at Pelephone. For both the
current and the prior-year periods, B Communications' consolidated revenues consisted entirely of Bezeq's revenues.
B Communications' consolidated operating profit for the fourth quarter of 2016 totaled NIS 369
million ($96 million), a 1.1% decrease compared to NIS 373
million reported in the fourth quarter of 2015. For the full year 2016, B Communications' consolidated operating profit
totaled NIS 1.8 billion ($481 million), an 8.4% decrease compared
with NIS 2.0 billion reported in 2015.
B Communications' consolidated net profit for the fourth quarter of 2016 totaled NIS 78 million
($20 million), a 74.4% decrease compared with NIS 305 million
reported in the fourth quarter of 2015. For the full year 2016, B Communications' consolidated net profit totaled NIS 475 million ($124 million), a 58.2% decrease compared with NIS 1.14 billion reported in 2015. The decrease was due to Bezeq's lower net profit in 2016 compared with 2015
and due to the one-time refinancing expenses related to the early redemption of the 7⅜% Senior Secured Notes ("Notes").
B Communications Fourth Quarter and Full Year Unconsolidated Financial Results
As of December 31, 2016, B Communications held approximately 26.3% of Bezeq's outstanding
shares. B Communications' interest in Bezeq's net profit for the fourth quarter of 2016 totaled NIS
49 million ($14 million), compared with NIS 113 million
reported in the fourth quarter of 2015 (based on the Company's then 31% ownership interest in Bezeq as of December 31, 2015). For the full year 2016, B Communications' interest in Bezeq's net profit totaled
NIS 332 million ($86 million), a 37.2% decrease compared with
NIS 529 million reported in 2015.
During the fourth quarter and full year of 2016, B Communications recorded net amortization expenses of NIS 22 million ($6 million) and NIS 72 million
($19 million), respectively, related to its Bezeq purchase price allocation ("Bezeq PPA"). From
April 14, 2010, the date of the acquisition of its interest in Bezeq, until December 31, 2016, B Communications has amortized approximately 76% of the total Bezeq PPA. The Bezeq PPA
amortization expense is a non-cash expense that is subject to adjustment.
B Communications' unconsolidated net financial expenses for the fourth quarter of 2016 totaled NIS 22
million ($6 million) compared with net financial expenses of NIS 84
million in the fourth quarter of 2015. B Communications incurred financial expenses of NIS 28
million ($7 million) in the fourth quarter of 2016 related to its Series B and C debentures.
These expenses were partially offset by financial income of NIS 6 million ($1 million) generated by short term investments.
B Communications unconsolidated net financial expenses for 2016 totaled NIS 488 million
($127 million) compared with NIS 293 million in 2015. These expenses
consisted of NIS 270 million ($70 million) one-time refinancing
expenses related to the early redemption of the Notes and NIS 228 million ($60 million) financing expenses related to the Notes and the Series B and C debentures. These expenses were
partially offset by financial income of NIS 10 million ($3 million)
generated by short term investments.
B Communications' net profit attributable to shareholders in the fourth quarter of 2016 was NIS 3
million ($1 million) compared with NIS 103 million reported in
the fourth quarter of 2015.
For the full year 2016, B Communications' net loss attributable to shareholders totaled NIS 237
million ($62 million) compared to net profit attributable to shareholders of NIS 210 million in 2015. The loss in 2016 was due to Bezeq's lower net profit in 2016 compared with 2015 and
due to the one-time refinancing expenses related to the early redemption of the Notes.
(In millions)
|
Three months ended December 31,
|
Year ended December 31,
|
|
2015
|
2016
|
2016
|
2015
|
2016
|
2016
|
|
NIS
|
NIS
|
US$
|
NIS
|
NIS
|
US$
|
|
|
|
|
|
|
|
Financing expenses, net
|
(84)
|
(22)
|
(6)
|
(293)
|
(488)
|
(127)
|
Operating expenses
|
(2)
|
(2)
|
(1)
|
(8)
|
(9)
|
(2)
|
Income tax benefit (expenses)
|
101
|
-
|
-
|
101
|
-
|
-
|
PPA amortization, net
|
(25)
|
(22)
|
(6)
|
(119)
|
(72)
|
(19)
|
Interest in Bezeq's net profit
|
113
|
49
|
14
|
529
|
332
|
86
|
Net profit (loss)
|
103
|
3
|
1
|
210
|
(237)
|
(62)
|
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 quarter and full year ended December 31, 2016. For a full
discussion of Bezeq's results for the quarter and full year ended December 31, 2016, please refer
to its website: http://ir.bezeq.co.il.
Bezeq Group (consolidated)
|
Q4 2016
|
Q4 2015
|
%
change
|
FY 2016
|
FY 2015
|
%
change
|
|
(NIS millions)
|
|
(NIS millions)
|
|
|
|
|
|
|
|
|
Revenues
|
2,504
|
2,606
|
(3.9%)
|
10,084
|
9,985
|
1.0%
|
Operating profit
|
532
|
488
|
9.0%
|
2,321
|
2,570
|
(9.7%)
|
Operating margin
|
21.2%
|
18.7%
|
|
23.0%
|
25.7%
|
|
Net profit
|
185
|
369
|
(49.9%)
|
1,244
|
1,721
|
(27.7%)
|
EBITDA
|
940
|
947
|
(0.7%)
|
4,060
|
4,254
|
(4.6%)
|
EBITDA margin
|
37.5%
|
36.3%
|
|
40.3%
|
42.6%
|
|
Diluted EPS (NIS)
|
0.07
|
0.13
|
(46.2%)
|
0.45
|
0.62
|
(27.4%)
|
Cash flow from operating activities
|
832
|
889
|
(6.4%)
|
3,526
|
3,740
|
(5.7%)
|
Payments for investments
|
335
|
329
|
1.8%
|
1,416
|
1,635
|
(13.4%)
|
Free cash flow 1
|
513
|
592
|
(13.3%)
|
2,248
|
2,256
|
(0.4%)
|
Total debt
|
|
|
|
10,953
|
10,713
|
2.2%
|
Net debt
|
|
|
|
9,719
|
9,396
|
3.4%
|
EBITDA (trailing twelve months)
|
|
|
|
4,060
|
4,254
|
(4.6%)
|
Net debt/EBITDA (end of period) 2
|
|
|
|
2.39
|
2.21
|
|
|
|
|
|
|
|
1Free cash flow is defined as cash flow from operating
activities less net payments for investments.
|
2EBITDA in this calculation refers to the trailing twelve
months.
|
Revenues of the Bezeq Group in 2016 totaled NIS 10.08 billion ($2.62
billion) compared to NIS 9.99 billion in 2015, an increase of 1.0%. The increase was due to
the consolidation of Yes beginning in the second quarter of 2015, which was partially offset by a decrease in revenues in all of
the Bezeq Group segments and primarily at Pelephone.
Revenues of the Bezeq Group in the fourth quarter of 2016 were NIS 2.50 billion ($651 million), compared to NIS 2.61 billion in the corresponding quarter of 2015,
a decrease of 3.9%. The decrease was due to lower revenues in all of the Bezeq Group segments and primarily at Pelephone.
Salary expenses of the Bezeq Group in 2016 totaled NIS 2.01 billion ($523
million) compared to NIS 1.96 billion in 2015, an increase of 2.8%. The increase was
primarily due to the consolidation of Yes beginning in the second quarter of 2015.
Salary expenses of the Bezeq Group in the fourth quarter of 2016 were NIS 503 million
($131 million), compared to NIS 515 million in the corresponding
quarter of 2015, a decrease of 2.3%.
Operating expenses of the Bezeq Group in 2016 totaled NIS 4.01 billion ($1.04 billion) compared to NIS 3.87 billion in 2015, an increase of 3.7%. The
increase was primarily due to the consolidation of Yes beginning in the second quarter of 2015, partially offset by a decrease in
expenses in most of the Bezeq Group segments and primarily at Pelephone.
Operating expenses of the Bezeq Group in the fourth quarter of 2016 were NIS 1.03 billion
($267 million) compared to NIS 1.07 billion in the corresponding
quarter of 2015, a decrease of 3.7%. The decrease was primarily due to a reduction in interconnect fees and payments to telecom
operators, and decreased terminal equipment and marketing expenses, which expenses were partially offset by an increase in
content and sub-contractor expenses.
Other operating income, net of the Bezeq Group in 2016 was NIS nil compared with NIS 95 million
in 2015. The decrease was primarily due to a reduction in capital gains from the sale of real estate at Bezeq
Fixed-Line.
Other operating expenses, net of the Bezeq Group in the fourth quarter of 2016 amounted to NIS 33
million ($9 million), compared to NIS 76 million in the
corresponding quarter of 2015. The decrease was due to a reduction in the provision for the early retirement of employees at
Bezeq Fixed-Line.
Depreciation and amortization expenses of the Bezeq Group in 2016 totaled NIS 1.74 billion
($452 million) compared to NIS 1.68 billion in 2015, an increase of
3.3%. The increase was primarily due to the consolidation of Yes beginning in the second quarter of 2015 and the
amortization of the surplus acquisition costs incurred as a result of the increase in Bezeq's ownership interest in Yes to a
controlling stake, which was partially offset by a reduction in depreciation expenses at Pelephone.
Depreciation and amortization expenses of the Bezeq Group in the fourth quarter of 2016 were NIS 408
million ($106 million), compared to NIS 459 million in the
corresponding quarter of 2015, a decrease of 11.1%. The decrease was due to a reduction in depreciation and amortization expenses
in all group segments.
Operating profit of the Bezeq Group in 2016 totaled NIS 2.32 billion ($604 million) compared to NIS 2.57 billion in 2015, a decrease of 9.7%.
Operating profit of the Bezeq Group in the fourth quarter of 2016 was NIS 532 million ($138 million) compared to NIS 488 million in the corresponding quarter of 2015,
an increase of 9.0%.
Financing expenses, net of the Bezeq Group in 2016 totaled NIS 447 million ($116 million), compared to NIS 263 million in 2015, an increase of 70.0%.
Financing expenses, net of the Bezeq Group in the fourth quarter of 2016 amounted to NIS 136
million ($35 million) compared to financing income of NIS 3
million in the corresponding quarter of 2015. The increase was primarily due to the cancellation of a provision in 2015
for accumulated interest on taxes owed for prior years relating to financing income from Yes pursuant to an agreement with the
Israeli Tax Authorities, as well as an increase in the provision for contingent consideration to Eurocom in the fourth quarter of
2016 in connection with the acquisition of Eurocom's stake in Yes.
Tax expenses of the Bezeq Group in 2016 totaled NIS 625 million ($163
million) compared to NIS 598 million in 2015, an increase of 4.5%. The increase in tax
expenses was due to a decrease in deferred tax asset resulting from a reduction in corporate tax rates in the amount of
NIS 143 million ($37 million), partially offset by a decrease in tax
expenses at Bezeq Fixed-Line.
Tax expenses of the Bezeq Group in the fourth quarter of 2016 were NIS 210 million ($55 million) compared to NIS 119 million in the corresponding quarter of 2015, an
increase of 76.5%. The increase in tax expenses was due to the aforementioned recognition of the one-time deferred tax expense
resulting from the reduction in corporate tax rates.
Net profit of the Bezeq Group in 2016 totaled NIS 1.24 billion ($324
million) compared to NIS 1.72 billion in 2015, a decrease of 27.7%.
Net profit of the Bezeq Group in the fourth quarter of 2016 was NIS 185 million ($48 million) compared to NIS 369 million in the corresponding quarter of 2015, a
decrease of 49.9%.
EBITDA of the Bezeq Group in 2016 totaled NIS 4.06 billion ($1.06
billion) (EBITDA margin of 40.3%) compared to NIS 4.25 billion (EBITDA margin of 42.6%) in
2015, a decrease of 4.6%.
EBITDA of the Bezeq Group in the fourth quarter of 2016 was NIS 940 million ($244 million) (EBITDA margin of 37.5%) compared to NIS 947 million (EBITDA margin
of 36.3%) in the corresponding quarter of 2015, a decrease of 0.7%.
Cash flow from operating activities of the Bezeq Group in 2016 totaled NIS 3.53 billion
($917 million) compared to NIS 3.74 billion in 2015, a decrease of
5.7%. The decrease was primarily due to changes in working capital partially offset by the consolidation of yes beginning in the
second quarter of 2015.
Cash flow from operating activities of the Bezeq Group in the fourth quarter of 2016 was NIS 832
million ($216 million) compared to NIS 889 million in the
corresponding quarter of 2015, a decrease of 6.4%.
Payments for investments (Capex) of the Bezeq Group in 2016 totaled NIS 1.42 billion
($368 million) compared to NIS 1.64 billion in 2015, a decrease of
13.4%. The decrease was due to a reduction in investments in all Bezeq Group segments and specifically at Pelephone, mainly due
to payments made in 2015 for LTE 4G frequencies.
Capex of the Bezeq Group in the fourth quarter of 2016 was NIS 335 million ($87 million) compared to NIS 329 million in the corresponding quarter of 2015, an
increase of 1.8%.
Free cash flow of the Bezeq Group in 2016 totaled NIS 2.25 billion ($585
million) compared to NIS 2.26 billion in 2015, a decrease of 0.4%.
Free cash flow of the Bezeq Group in the fourth quarter of 2016 was NIS 513 million
($133 million) compared to NIS 592 million in the corresponding
quarter of 2015, a decrease of 13.3%.
Total debt of the Bezeq Group as of December 31, 2016 was NIS 11.0
billion ($2.8 billion) compared to NIS 10.7 billion as of
December 31, 2015.
Net debt of the Bezeq Group was NIS 9.72 billion ($2.53 billion)
as of December 31, 2016 compared to NIS 9.40 billion as of
December 31, 2015.
Net debt to EBITDA (trailing twelve months) ratio of the Bezeq Group as of December 31, 2016,
was 2.39, compared to 2.21 as of December 31, 2015.
Notes:
Convenience translation to U.S Dollars
Unless noted specifically otherwise, the dollar denominated figures were converted to US$ using a convenience translation
based on the New Israeli Shekel (NIS)/US$ exchange rate of NIS 3.845 = US$
1 as published by the Bank of Israel for December 31,
2016.
Use of non-IFRS financial measures
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. The following non-IFRS measures are provided in the press release and
accompanying supplemental information because management believes these measurements are useful for investors and financial
institutions to analyze and compare companies on the basis of operating performance:
- EBITDA - defined as net profit plus net interest expense, provision for income taxes, depreciation and
amortization;
- EBITDA trailing twelve months - defined as net profit plus net interest expense, provision for income taxes, depreciation
and amortization during last twelve months;
- Net debt - defined as long and short term liabilities minus cash and cash equivalents and short term investments; and
- Net debt to EBITDA ratio - defined as net debt divided by the trailing twelve months EBITDA.
- Free Cash Flow (FCF) - defined as cash from operating activities less cash for the purchase/sale of property, plant and
equipment, and intangible assets, net;
These non-IFRS financial measures may differ materially from the non-IFRS financial measures used by other companies.
The Bezeq Group defines EBITDA as net profit 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 profit 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.
Management of Bezeq believes that free cash flow is an important measure of its liquidity as well as its ability to service
long-term debt, fund future growth and to provide a return to shareholders. We also believe this free cash flow definition does
not have any material limitations. Free cash flow is a financial index which is not based on IFRS. Free cash flow is defined as
cash from operating activities less cash for the purchase/sale of property, plant and equipment, and intangible assets, net.
Bezeq also uses the net debt and net debt to EBITDA trailing twelve months ratio to analyze its financial capacity for further
leverage and in analyzing the company's business and financial condition. Net debt reflects long and short term liabilities minus
cash and cash equivalents and investments.
Reconciliations between the Bezeq Group's results on an IFRS and non-IFRS basis with respect to these non-IFRS measurements
are provided in tables immediately following the Company's consolidated results. The 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 B Communications Ltd.
B Communications is a holding company with a controlling interest in Israel's largest
telecommunications provider, Bezeq, The Israel Telecommunication Corp. (TASE: BEZQ). B Communications shares are traded on NASDAQ
and the TASE under the symbol "BCOM." For more information please visit the following Internet sites:
www.bcommunications.co.il
www.ir.bezeq.co.il
www.eurocom.co.il
www.igld.com
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.
B Communications Ltd.
|
|
Consolidated Statements of Financial Position as at December
31,
|
(In millions)
|
|
|
2015
|
2016
|
2016
|
|
|
NIS
|
NIS
|
US$
|
Current Assets
|
|
|
|
|
Cash and cash equivalents
|
|
581
|
762
|
198
|
Restricted cash
|
|
155
|
-
|
-
|
Investments
|
|
1,535
|
907
|
236
|
Trade receivables
|
|
2,058
|
2,000
|
520
|
Other receivables
|
|
286
|
220
|
57
|
Inventory
|
|
115
|
106
|
28
|
|
|
|
|
|
Total current assets
|
|
4,730
|
3,995
|
1,039
|
|
|
|
|
|
Non-Current Assets
|
|
|
|
|
Trade and other receivables
|
|
674
|
644
|
167
|
Property, plant and equipment
|
|
7,197
|
7,070
|
1,839
|
Intangible assets
|
|
7,118
|
6,509
|
1,693
|
Deferred expenses and investments
|
|
643
|
447
|
116
|
Broadcasting rights
|
|
456
|
432
|
112
|
Investment in equity-accounted investee
|
|
25
|
18
|
5
|
Deferred tax assets
|
|
1,279
|
1,007
|
262
|
|
|
|
|
|
Total non-current assets
|
|
17,392
|
16,127
|
4,194
|
|
|
|
|
|
Total assets
|
|
22,122
|
20,122
|
5,233
|
B Communications Ltd.
|
|
Consolidated Statements of Financial Position as at December 31,
(cont'd)
|
(In millions)
|
|
|
2015
|
2016
|
2016
|
|
|
NIS
|
NIS
|
US$
|
Current Liabilities
|
|
|
|
|
Bank loans and credit and debentures
|
|
2,089
|
2,051
|
533
|
Trade and other payables
|
|
1,694
|
1,640
|
427
|
Related party
|
|
233
|
32
|
8
|
Current tax liabilities
|
|
705
|
134
|
35
|
Provisions
|
|
100
|
80
|
21
|
Employee benefits
|
|
378
|
315
|
82
|
Total current liabilities
|
|
5,199
|
4,252
|
1,106
|
|
|
|
|
|
Non-Current Liabilities
|
|
|
|
|
Bank loans and debentures
|
|
12,290
|
11,446
|
2,977
|
Employee benefits
|
|
240
|
258
|
67
|
Other liabilities
|
|
227
|
244
|
63
|
Provisions
|
|
46
|
47
|
12
|
Deferred tax liabilities
|
|
729
|
587
|
153
|
Total non-current liabilities
|
|
13,532
|
12,582
|
3,272
|
|
|
|
|
|
Total liabilities
|
|
18,731
|
16,834
|
4,378
|
|
|
|
|
|
Equity
|
|
|
|
|
Attributable to shareholders
|
|
1,045
|
1,170
|
304
|
Non-controlling interests
|
|
2,346
|
2,118
|
551
|
|
|
|
|
|
Total equity
|
|
3,391
|
3,288
|
855
|
|
|
|
|
|
Total liabilities and equity
|
|
22,122
|
20,122
|
5,233
|
B Communications Ltd.
|
|
Consolidated Statements of Income for the Year Ended December
31,
|
(In millions except per share data)
|
|
2015
|
2016
|
2016
|
|
NIS
|
NIS
|
US$
|
Revenues
|
9,985
|
10,084
|
2,623
|
|
|
|
|
Costs and expenses
|
|
|
|
Depreciation and amortization
|
2,131
|
2,183
|
568
|
Salaries
|
1,958
|
2,012
|
523
|
General and operating expenses
|
3,876
|
4,021
|
1,046
|
Other operating expense, net
|
3
|
20
|
5
|
|
|
|
|
|
7,968
|
8,236
|
2,142
|
|
|
|
|
Operating profit
|
2,017
|
1,848
|
481
|
|
|
|
|
Financing expenses, net
|
535
|
935
|
243
|
|
|
|
|
Profit after financing expenses, net
|
1,482
|
913
|
238
|
|
|
|
|
Share of loss (income) in
|
|
|
|
equity-accounted investee
|
(12)
|
5
|
1
|
|
|
|
|
Profit before income tax
|
1,494
|
908
|
237
|
|
|
|
|
Income tax
|
358
|
433
|
113
|
|
|
|
|
Net profit for the year
|
1,136
|
475
|
124
|
|
|
|
|
Profit (loss) attributable to:
|
|
|
|
Owners of the company
|
210
|
(237)
|
(62)
|
Non-controlling interests
|
926
|
712
|
186
|
|
|
|
|
Net profit for the year
|
1,136
|
475
|
124
|
|
|
|
|
Earnings (loss) per share
|
|
|
|
Basic
|
7.04
|
(7.94)
|
(2.06)
|
Diluted
|
6.97
|
(7.94)
|
(2.06)
|
Bezeq, The Israel Telecommunication Corp.
|
Reconciliation for NON-IFRS Measures
|
|
EBITDA
|
The following is a reconciliation of the Bezeq Group's net profit to
EBITDA:
|
|
(In millions)
|
Three month period ended December 31,
|
Year ended December 31,
|
|
2015
|
2016
|
2016
|
2015
|
2016
|
2016
|
|
NIS
|
NIS
|
US$
|
NIS
|
NIS
|
US$
|
|
|
|
|
|
|
|
Net profit
|
369
|
185
|
48
|
1,721
|
1,244
|
324
|
Income tax
|
119
|
210
|
55
|
598
|
625
|
163
|
Share of loss (income) in equity- accounted
investee
|
3
|
1
|
-
|
(12)
|
5
|
1
|
Financing expenses, net
|
(3)
|
136
|
35
|
263
|
447
|
116
|
Depreciation and amortization
|
459
|
408
|
106
|
1,684
|
1,739
|
452
|
|
|
|
|
|
|
|
EBITDA
|
947
|
940
|
244
|
4,254
|
4,060
|
1,056
|
Net Debt
|
|
The following table shows the calculation of the Bezeq Group's net
debt:
|
|
(In millions)
|
As at December 31,
|
|
2015
|
2016
|
2016
|
|
NIS
|
NIS
|
US$
|
|
|
|
|
Short term bank loans and credit and debentures
|
1,913
|
1,825
|
475
|
Non-current bank loans and debentures
|
8,800
|
9,128
|
2,374
|
Cash and cash equivalents
|
(555)
|
(648)
|
(169)
|
Investments
|
(762)
|
(586)
|
(152)
|
|
|
|
|
Net debt
|
9,396
|
9,719
|
2,528
|
|
|
|
|
Net Debt to Trailing Twelve Months EBITDA Ratio
|
|
The following table shows the calculation of the Bezeq Group's net debt to
EBITDA trailing twelve months ratio:
|
|
(In millions)
|
As at December 31,
|
|
2015
|
2016
|
2016
|
|
NIS
|
NIS
|
US$
|
|
|
|
|
Net debt
|
9,396
|
9,719
|
2,528
|
|
|
|
|
Trailing twelve months EBITDA
|
4,254
|
4,060
|
1,056
|
|
|
|
|
Net debt to EBITDA ratio
|
2.21
|
2.39
|
2.39
|
Bezeq, The Israel Telecommunication Corp.
|
Reconciliation for NON-IFRS Measures
|
|
Free Cash Flow
|
|
The following table shows the calculation of the Bezeq Group's free cash
flow:
|
|
(In millions)
|
Three month period ended December 31,
|
Year ended December 31,
|
|
2015
|
2016
|
2016
|
2015
|
2016
|
2016
|
|
NIS
|
NIS
|
US$
|
NIS
|
NIS
|
US$
|
|
|
|
|
|
|
|
Cash flow from operating activities
|
889
|
832
|
216
|
3,740
|
3,526
|
917
|
Purchase of property, plant and equipment
|
(286)
|
(292)
|
(76)
|
(1,324)
|
(1,193)
|
(310)
|
Investment in intangible assets and deferred expenses
|
(43)
|
(43)
|
(11)
|
(311)
|
(223)
|
(58)
|
Proceeds from the sale of property, plant and equipment
|
32
|
16
|
4
|
151
|
138
|
36
|
|
|
|
|
|
|
|
Free cash flow
|
592
|
513
|
133
|
2,256
|
2,248
|
585
|
Designated Disclosure with Respect to the Company's Projected Cash Flows
In connection with the issuance of our Series C Debentures in September 2016, we undertook to
comply with the "hybrid model disclosure requirements" as determined by the Israeli Securities Authority and as described in the
prospectus governing our Series C Debentures.
This model provides that in the event certain financial "warning signs" exist, and for as long as they exist, we will be
subject to certain disclosure obligations towards the holders of our Series C Debentures.
In examining the existence of warning signs as of December 31, 2016, our board of directors
noted that our consolidated financial statements (unaudited) as well as our separate internal (unpublished) unaudited financial
information as of and for the quarter ended December 31, 2016 reflect that we had a continuing
negative cash flow from operating activities of NIS 2 million for the fourth quarter of 2016.
The Israeli regulations provide that the existence of a continuing negative cash flow from operating activities could be
deemed to be a "warning sign" unless our board of directors determines that the possible "warning sign" does not reflect a
liquidity problem.
Such continuing negative cash flow from operating activities results from the general operating expenses of the Company of
NIS 2 million for the fourth quarter of 2016 and due to the fact that the Company, as a holding
company, does not have any cash inflows from operating activities. Our main source of cash inflows is generated from dividends
(classified as cash flow from investing activities) or debt issuances (classified as cash flow from financing activities). We did
not have any such inflows during the fourth quarter.
Such continuing negative cash flow from operating activities does not effect our liquidity in any manner. Our board of
directors reviewed our financial position, outstanding debt obligations and our existing and anticipated cash resources and uses
and determined that the existence of the continuing negative cash flow from operating activities, as mentioned above, does not
reflect a liquidity problem.
Disclosure with Respect to the Company's Requirements Under Series C Debentures
The Company declares with respect to the PR/reporting period as follows:
1. The Company did not record in favor of a third party any lien of any rank whatsoever over its direct or
indirect holdings of 691,361,036 shares of Bezeq (the "Bezeq Shares") including over any of the rights accompanying such
shares.
2. The Company did not make any disposition of the Bezeq Shares.
3. The Company did not assume any financial debt (as defined in the Trust Deed of Series C) during the
reporting period (other than in the framework of the issuance of the Debentures (Series C), and its wholly owned subsidiaries,
including B Communications (SP1) and B Communications (SP2) did not issue any financial debt whatsoever during the reporting
period.
4. As of the reporting date, the Company holds approximately 26.34% of Bezeq's outstanding shares, directly
and through its subsidiary.
5. The equity attributable to the Company's shareholders (not including non-controlling interests) according
to this report amounts to NIS 1,170 million, and represents 31% of the Company's total balance
sheet on an unconsolidated basis.
For further information, please contact:
Idit Cohen – IR Manager
idit@igld.com / Tel: +972-3-924-0000
Investor relations contacts:
Hadas Friedman – Investor Relations
Hadas@km-ir.co.il / Tel:
+972-3-516-7620
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/b-communications-reports-financial-results-for-the-fourth-quarter-and-full-year-of-2016-300431775.html
SOURCE B Communications