Bezeq Reports Third Quarter 2007 Financial Results
Bezeq Reports Third Quarter 2007 Financial Results
Earnings for the First Nine Months of 2007 Rise 10.8% to a Record NIS 1.02 Billion
TEL AVIV, Israel, November 15/PRNewswire-FirstCall/ -- Bezeq The Israel Telecommunication Corp., Limited (TASE: BEZQ), Israel's largest telecommunications provider, announced today its financial results for the third quarter 2007, the period ended September 30, 2007.
Financial Highlights:
- Bezeq third quarter 2007 and nine month year to date revenues set an all time record highs of NIS 3.14 billion and NIS 9.28 billion respectively.
- Earnings attributed to the shareholders of Bezeq increased to a record NIS 1.02 billion in the first nine months of 2007, an increase of 10.8% year-over-year, but declined to NIS 255 million in the third quarter of 2007 from NIS 313 million in the third quarter of 2006, a decrease of 18.4%.
- The Bezeq Group's EBITDA amounted to NIS 3.15 billion in the first nine months of the year, an increase of 5.1% year-over-year (33.9% EBITDA margin in the first nine months of 2007 versus 32.8% in prior year period). EBITDA for the third quarter of 2007 was NIS 1.04 billion (33.2% EBITDA margin), an increase of 1.1% compared with the third quarter of 2006.
- The Bezeq Group's free cash flow amounted to NIS 1.76 billion in the first nine months of 2007, a decline of 6.3% year-over-year, and to NIS 601 million in the third quarter of 2007, a decrease of 18.5% compared to the third quarter of 2006.
Divisional Highlights:
- Bezeq Wireline: The decrease in telephony revenues was almost completely offset by an increase in revenues from high-speed internet, data communications, and value added services. In the first nine months of 2007, revenues from internet, data communications and transmission services increased by NIS 90 million compared to the corresponding period.
- Pelephone: Net earnings increased 39.4% in the third quarter, and increased 33.3% in the first nine months of 2007, driven by the strength of Pelephone's 3G subscriber growth (652,000 total 3G subscribers as of today) which helped push total cellular subscribers up to 2.56 million, an increase of 8.2% year-over-year.
- Bezeq International: Record quarterly minutes of international long distance call traffic and record levels of broadband subscribers fueled all time high quarterly revenue of NIS 326 million for Bezeq International.
- yes: Record multi-channel television subscribers drove quarterly segment revenues to an all time high of NIS 360 million.
Shlomo Rodav, Chairman of the Board of Bezeq, stated "Our group wide record revenue and net earnings performance for the nine month year-to-date period reflect Bezeq's success in evolving the delivery to our customers, the most comprehensive suite of telecommunications services available. The strength of our broad portfolio of consumer and business services focused on higher growth segments of the telecommunications market including high speed broadband Internet, data services and 3G mobile services more than offset the erosion of traditional wireline services. Since joining Bezeq in September, I have been truly impressed with the depth and breadth of the suite of services Bezeq brings to market and the opportunities that I see for additional growth through advanced next generation service offerings and additional efforts focused on improving internal operating efficiencies.
"Looking ahead, we look forward to reviewing the upcoming release of the Grunau Committee's findings and recommendations with regards to reforming the current overly restrictive regulatory framework in order to identify opportunities to better serve our valued customers. Our latest commitment to invest approximately NIS 1 billion in upgrading our Pelephone mobile communications infrastructure to a UMTS/HSPA standard will further improve our competitive positioning in the cellular market and reflects our dedication to delivering our customers new innovative applications and services as well as higher data connectivity speeds. Despite the challenges presented to us by the current regulatory environment, as compared to other leading international markets for telecommunications services, we are committed to making investments in infrastructure and customer satisfaction-focused initiatives to ensure our consumer and business customers enjoy the best of breed in telecommunications services," concluded Mr. Rodav.
Avi Gabbay, Bezeq's CEO, said that "despite the erosion in revenues from traditional telephony and the harsh regulatory environment that Bezeq faces, our results demonstrate our ability to generate new and growing revenue sources in an increasingly competitive fixed-line market. The success of our broadband Internet and related value-added services, as well as our data communications services, enable us to continue offering our residential and business customers the most advanced communications services in the Israeli market. While Bezeq will continue to lose revenues from traditional telephony, as it happens to incumbents around the world, we will continue to focus on our growth areas, and at the same time increase our efforts to improve our cost structure."
Consolidated results Bezeq Group (Consolidated) Q3 2007 Q3 2006 Change Q1-Q3 Q1-Q3 Change 2007 2006 (NIS millions) (NIS millions) Revenues 3,139 3,084 1.8% 9,280 9,115 1.8% Operating profit 596 560 6.3% 1,823 1,592 14.5% EBITDA 1,041 1,029 1.1% 3,146 2,993 5.1% EBITDA margin 33.2% 33.4% 33.9% 32.8% Net profit attributable to shareholders of the company 255 313 -18.4% 1,015 916 10.8% Cash flow from operating activities 895 964 -7.1% 2,443 2,688 -9.1% Capex, net 294 226 30.2% 680 806 -15.7% Free cash flow 601 738 -18.5% 1,763 1,882 -6.3% Net debt/EBITDA * (Sept 30, 2007) Net debt/ shareholders' equity (end of period) 1.26 - *EBITDA based on trailing twelve months 1.07 0.59
Bezeq Group's revenues increased by 1.8% year-over-year to a record NIS 3.14 billion in the third quarter of 2007. Revenue for the first nine months of 2007 also increased 1.8% year-over-year to NIS 9.28 billion. Higher revenues in both periods were driven by increased sales in Bezeq's Pelephone cellular, Bezeq International and yes multi-channel television segments which more than offset the decline in revenue within the company's wireline communications segment.
Net profit attributed to Bezeq shareholders amounted to NIS 255 million in the third quarter of 2007, a decrease of 18.4% compared to the third quarter of 2006. Net profit for the first nine months of 2007 increased 10.8% year-over-year to NIS 1.02 billion.
The Group's earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter 2007 was approximately NIS 1.04 billion (33.2% EBITDA margin), an increase of 1.1% compared with the third quarter of 2006 (33.4% EBITDA margin). EBITDA in the first nine months of 2007 increased 5.1% to NIS 3.15 billion (33.9% EBITDA margin) compared with the first nine months of 2006 (32.8% EBITDA margin). EBITDA growth resulted from an increase in revenues and a decrease in depreciation expenses as well as operating and general expenses.
Net capital expenditures (CAPEX) amounted to NIS 294 million in the third quarter of 2007, an increase of 30.2% compared to the third quarter of 2006. Net capital expenditures for the first nine months of 2007 declined 15.7% year-over-year to NIS 680 million.
The Bezeq Group's free cash flow totaled NIS 601 million in the third quarter of 2007, a decrease of 18.5% compared to the third quarter of 2006. Free cash flow for the first nine months of 2007 decreased 6.3% to NIS 1.76 billion as compared to the year ago period.
As of September 30, 2007, the Group's net financial debt was NIS 4.51 billion, compared with NIS 3.72 billion as of September 30, 2006.
Bezeq Wireline
Revenue from wireline domestic communications in the first nine months of 2007 decreased by 2.3% year-over-year, to NIS 4.26 billion. The decrease in revenue was offset primarily by ongoing growth in the number of customers who subscribe to Bezeq's high-speed Internet service (ADSL) and an increase in revenue derived from data communication services. Total ADSL subscribers reached a record 942,000 as of September 30, 2007, an increase of 8.7% year-over-year and 1.9% sequentially.
Bezeq's wireline segment posted positive EBITDA of NIS 563 million (39.5% EBITDA margin) in the third quarter of 2007, compared to NIS 622 million (42.4% EBITDA margin) for the third quarter of 2006, a decline of 9.5%. Bezeq's wireline segment posted positive EBITDA of NIS 1.65 billion (38.7% EBITDA margin) for the first nine months of 2007 as compared to NIS 1.73 billion (39.6% EBITDA margin) for the first nine months of 2006, a decline of 4.5%.
While the Bezeq wireline business made significant progress in its restructuring efforts through the first nine months of 2007 with regards to realigning the organization along new customer focused divisional lines and improving customer service, the estimated operational cost savings with regards to reductions in the workforce have been slower to materialize than previously anticipated. Initial savings from reductions in head count to date have been offset by scheduled wage increases across the broader workforce as well as from increases on account of employment terms and severance terms for senior management. Accordingly, management is examining actions to accelerate the existing plan as well as a range of additional initiatives aimed at improving operational effectiveness in 2008 and beyond. Operating and general expenses decreased 4.4% in the first nine months of 2007 and 8.8% in the third quarter of 2007. The decrease stemmed mainly from a decrease in expenses relating to interconnection to cellular operators, services and maintenance by sub-contractors, materials and spare parts, and maintenance of buildings which was set off by an increase in royalty expenses and general expenses, mainly due to an increase in interconnection to domestic fixed line communication operators.
Q1-Q3 Q1-Q3 Bezeq Wireline Q3 2007 Q3 2006 Change 2007 2006 Change (NIS millions) (NIS millions) Revenues 1,425 1,465 -2.7% 4,260 4,360 -2.3% Operating profit 327 363 -10.0% 939 951 -1.2% EBITDA 563 622 -9.5% 1,648 1,726 -4.5% EBITDA margin 39.5% 42.4% 38.7% 39.6% Active subscriber lines, period end ('000) 2,767 2,813 -1.6% Average monthly revenue per line (NIS)* 75.5 81.2 -7.0% 76.3 80.7 -5.5% Outgoing usage minutes (millions) 3,848 4,257 -9.6% 11,514 12,782 -9.9% Incoming usage minutes (millions)** 1,137 967 17.6% 3,250 2,725 19.3% ADSL subscribers, period end ('000) 942 867 8.7% Average monthly revenue per ADSL subscriber (NIS) *** 58.8 56.6 3.9% 58.2 57.0 2.1% * Not including revenues from data communications and transmission services, services to communications providers, contract and other work, and revenues from incoming traffic. ** The increase in incoming minutes in Q1-Q3/2007 compared to the corresponding period in 2006 stems from a 90% increase in traffic minutes from domestic carriers in competition with Bezeq. *** The increase in average monthly revenue per ADSL subscriber stems from value added services (not from an increase in prices).
Pelephone
Pelephone's revenues increased 5.2% to a record NIS 3.50 billion in the first nine months of 2007 up from NIS 3.33 billion in the first nine months of 2006. The increase in revenue stemmed from higher sales of terminal equipment, resulting from an increase in the quantity of handsets sold and upgraded. In addition, there was an increase in revenue from cellular services, following an increase in content revenue and an increase in the number of subscribers, which was set off mainly by lower pricing.
Pelephone's net profit in the third quarter of 2007 grew by 39.4% to NIS 154 million compared to the third quarter of 2006. In first nine months of 2007, the net profit grew by 33.3% as compared to the first nine months of 2006, to NIS 482 million.
Pelephone posted positive EBITDA of NIS 340 million (28.3% EBITDA margin) in the third quarter of 2007, compared to NIS 286 million (25.0% EBITDA margin) in the third quarter of 2007-an 18.7% increase. For the first nine months of 2007, Pelephone's EBITDA grew 13.9% year-over-year to NIS 1.03 billion (29.3% EBITDA margin), up from NIS 900 million (27.0% EBITDA margin).
As of September 30, 2007 Pelephone had a record 2.56 million active subscribers, an increase of approximately 47,000 net subscribers since June 30, 2007. Pelephone is a market leader in 3G subscribers and already has 652,000 subscribers, which represent over 25% of all Pelephone subscribers. Pelephone revenues from value added and content services constituted 12.8% of all revenues from cellular services in the third quarter of 2007, as compared to 10.9% in the same quarter last year.
Pelephone Q1-Q3 Q1-Q3 Q3 2007 Q3 2006 Change 2007 2006 Change (NIS millions) (NIS millions) Revenues 1,203 1,144 5.1% 3,502 3,330 5.2% Operating profit 219 170 28.5% 672 544 23.6% EBITDA 340 286 18.7% 1,025 900 13.9% EBITDA margin 28.3% 25.0% 29.3% 27.0% Net profit 154 111 39.4% 482 361 33.3% Cash flows from operating activities 392 337 16.4% 997 1,030 -3.2% Capex, net 81 64 27.7% 259 244 6.3% Free cash flow 311 273 13.7% 738 786 -6.1% Subscribers at end of period (millions) 2.560 2.366 8.2% Average monthly revenue per user (ARPU, NIS) 135 142 -4.9% 132 139 -5.0% Average monthly minutes of use per subscriber (MOU) 363 357 1.7% 352 349 0.9%
Bezeq International
Bezeq International, Israel's largest supplier of Internet, international calls in Israel and network equipment provider (NEP) services, posted segment revenue of NIS 970 million for the first nine months of 2007, up 2.2% as compared to NIS 949 million in the first nine months of 2006. The increase stemmed from a rise in Internet revenue due to the sale of capacity and from an increase in revenue from record levels of outgoing call minutes, alongside a decrease in operations relating to transfer of calls between communications carriers around the world.
Bezeq International generated a net profit of NIS 39 million in the third quarter of 2007, growing by 30.0% year-over-year. In first nine months of 2007 earnings grew by 43.4% to NIS 115 million as compared to the first nine months of 2006.
Bezeq International posted positive EBITDA of NIS 76 million (23.2% EBITDA margin) in the third quarter of 2007, compared to NIS 56 million (17.7% EBITDA margin) in the third quarter of 2007, an increase of 35.7% year-over-year. Bezeq International posted positive EBITDA of NIS 225 million (23.2% EBITDA margin) for the first nine months of 2007, up 25.3% year-over-year from NIS 180 million (18.9% EBITDA margin) in the first nine months of 2006.
The marked improvement in Bezeq International's profitability stems from growth in all core business areas, combined with an increased focus on costs and the discontinuation of unprofitable activities at the companies merged over the past year and a half.
Bezeq International Q1-Q3 Q1-Q3 Q3 2007 Q3 2006 * Change 2007 2006 * Change (NIS millions) (NIS millions) Revenues 326 316 3.3% 970 949 2.2% Operating profit 54 38 44.3% 159 116 36.9% EBITDA 76 56 35.7% 225 180 25.3% EBITDA margin 23.2% 17.7% 23.2% 18.9% Net profit 39 30 30.0% 115 80 43.4% Cash flows from operating activities 34 55 -38.8% 65 137 -52.6% Capex, net 5 7 -19.4% 29 29 1.8% Free cash flow 28 49 -41.5% 36 109 -67.1% * 2006 income statement data includes proforma results of merged companies
yes
Revenue from the yes multi-channel television segment increased 5.8% to a record NIS 1.07 billion in the first nine months of 2007, up from the NIS 1.01 billion in the first nine months of 2006. The rise in revenue was primarily related to an increase in the number of subscribers.
In the first nine months of 2007 the net loss declined to NIS 43 million, an 84.5% improvement as compared to the first nine months of 2006.
Net financing income in the third quarter of 2007 amounted to NIS 75 million as compared to net financing expenses of NIS 86 million in the corresponding quarter last year. Financing expenses during the third quarter of 2007 were influenced by a recalculation of the fair value of shareholders' loans due to the postponement of expected payment dates. This change increased financing income by NIS 213 million. As a result, yes recorded net financing income (instead of net financing expenses as it generally records) as mentioned above, which lead to a net profit of NIS 70 million in the third quarter of 2007, as compared to a net loss of NIS 97 million in the corresponding quarter of 2006.
yes posted positive EBITDA of NIS 62 million (17.3% EBITDA margin) in the third quarter of 2007, compared to NIS 62 million (18.4% EBITDA margin) in the third quarter of 2006. yes posted positive EBITDA of NIS 254 million (23.8% EBITDA margin) for the first nine months of 2007, up 20.6% year-over-year from NIS 211 million (20.9% EBITDA margin) in the first nine months of 2006.
The number of yes subscribers at the end of September 2007 was a record 545,000, up from 543,000 in the prior quarter and up from 539,000 in the year ago period.
yes Q1-Q3 Q1-Q3 Q3 2007 Q3 2006 Change 2007 2006 Change (NIS millions) (NIS millions) Revenues 360 340 5.9% 1,068 1,009 5.8% Operating profit (4) (11) -62.7% 52 (9) NM EBITDA 62 62 -0.4% 254 211 20.6% EBITDA margin 17.3% 18.4% 23.8% 20.9% Net profit 70 (97) NM (43) (278) -84.5% Cash flows from operating activities 45 49 -7.9% 110 114 -3.2% Capex, net* 84 39 117.5% 174 144 20.6% Free cash flow (39) 10 NM (64) (31) 109.0% Subscribers, period end ('000) 545 539 1.2% * Including subscriber acquisition costs
About Bezeq The Israel Telecommunication Corp.
Bezeq is Israel's largest 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 telecommunication services including domestic, international and cellular phone services; Internet, ADSL, and other data communications; leased lines, and corporate networks.
For more information about Bezeq please visit the corporate Web site 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.
"Bezeq" The Israel Telecommunication Corp., Limited Condensed Interim Consolidated Income Statements For the nine-month For the three-month For the period ended September period ended September year ended 30 30 December 31 2007 2006 2007 2006 2006 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) NIS NIS NIS NIS NIS thousands thousands thousands thousands thousands Revenue 9,280,444 9,114,536 3,139,090 3,083,547 12,231,830 Costs and expenses Depreciation and amortization 1,322,676 1,400,831 445,344 469,201 1,864,035 Salary 1,757,025 1,714,759 597,354 575,654 2,586,437 Operating and general expenses 4,307,330 4,360,539 1,474,948 1,503,019 5,966,616 Other operating expenses (income), net 70,077 45,988 25,647 (24,585) 249,540 7,457,108 7,522,117 2,543,293 2,523,289 10,666,628 Operating profit 1,823,336 1,592,419 595,797 560,258 1,565,202 Financing costs Financing expenses 689,718 581,633 368,802 154,510 694,393 Financing income (424,586) (300,188) (234,850) (65,006) (356,425) Net financing expenses 265,132 281,445 133,952 89,504 337,968 Profit after net financing expenses 1,558,204 1,310,974 461,845 470,754 1,227,234 Equity in profits of investees accounted by the equity method 2,405 6,932 761 2,919 11,184 Profit before income tax 1,560,609 1,317,906 462,606 473,673 1,238,418 Income tax 504,936 455,004 132,240 177,377 488,393 Profit for the period 1,055,673 862,902 330,366 296,296 750,025 Attributable to: The shareholders of the Company 1,015,040 915,742 255,198 312,934 808,995 Minority interest in consolidated companies (40,633) (52,840) 75,168 (16,638) (58,970) Profit for the period 1,055,673 862,902 330,366 296,296 750,025 Earnings per share Basic earnings per share (in NIS) 0.39 0.35 0.10 0.12 0.31 Diluted earnings per share (in NIS) 0.38 0.35 0.09 0.12 0.31
"Bezeq" The Israel Telecommunication Corp., Limited Condensed Interim Consolidated Balance Sheets September September 30, December 31, 30, 2007 2006 2006 (Unaudited) (Unaudited) (Audited) NIS thousands NIS thousands NIS thousands Assets Cash and cash equivalents 1,104,769 1,188,480 2,631,790 Investments and loans, including derivatives 979,824 2,335,178 960,561 Trade receivables 2,335,772 2,116,297 2,111,451 Other receivables 192,297 172,383 250,657 Inventory 189,040 193,532 204,669 Broadcasting rights 223,976 177,925 169,017 Current tax assets 12,942 12,132 11,105 Assets classified as held for sale 22,562 - - Total current assets 5,061,182 6,195,927 6,339,250 Trade and other receivables 473,249 363,417 417,144 Investments and loans, including derivatives 273,751 383,155 342,175 Property, plant and equipment 6,075,139 6,638,321 6,492,362 Intangible assets 2,526,208 2,563,121 2,554,242 Deferred and other expenses 362,759 381,450 373,749 Investments in associates accounted by the equity method 33,176 27,799 32,122 Deferred tax assets 743,287 899,712 993,616 Total non-current assets 10,487,569 11,256,975 11,205,410 Total assets 15,548,751 17,452,902 17,544,660
"Bezeq" The Israel Telecommunication Corp., Limited Condensed Interim Consolidated Balance Sheets (cont'd) September September December 30, 2007 30, 2006 31, 2006 (Unaudited) (Unaudited) (Audited) NIS NIS NIS thousands thousands thousands Liabilities Loans and 1,970,562 3,734,392 3,637,347 credit Trade 1,314,852 1,340,335 1,393,568 payables Other 785,239 856,246 802,747 payables, including derivatives Current tax 50,832 72,487 121,704 liabilities Deferred 35,933 37,496 57,879 income Provisions 357,927 256,813 288,851 Employee 823,126 573,986 906,203 benefits Dividend 760,000 - 300,000 payable Total current 6,098,471 6,871,755 7,508,299 liabilities Debentures 4,424,859 3,224,662 3,169,441 Obligations 341,906 544,837 480,830 to banks Loans from 132,366 118,045 169,182 others Loans 362,275 558,120 564,250 provided by the minority in a subsidiary Employee 243,980 346,059 373,036 benefits Deferred 36,856 22,313 37,020 income and others Provisions 53,442 52,805 51,857 Total 5,595,684 4,866,841 4,845,616 non-current liabilities Total 11,694,155 11,738,596 12,353,915 liabilities Shareholders' equity Share capital 6,132,636 6,309,133 6,309,133 Share premium - 1,623,423 1,623,423 Reserves 684,698 386,099 671,820 Deficit (2,594,341) (2,046,229) (2,849,381) Total equity 4,222,993 6,272,426 5,754,995 attributable to shareholders of the Company Minority (368,397) (558,120) (564,250) interest in capital deficit of consolidated companies Total 3,854,596 5,714,306 5,190,745 shareholders' equity Total 15,548,751 17,452,902 17,544,660 shareholders' equity and liabilities
"Bezeq" The Israel Telecommunication Corp., Limited Condensed Interim Consolidated Statements of Cash Flows For the nine-month For the three-month For the year period ended September period ended September December 30 30 ended 31 2007 2006 2007 2006 2006 (Unaudited) (Unaudited) (Unaudited) (Unaudited)(Audited) NIS NIS NIS NIS NIS thousands thousands thousands thousands thousands Cash flows from operating activities Profit for the period 1,055,673 862,902 330,366 296,296 750,025 Adjustments: Depreciation 1,115,820 1,205,721 375,023 397,975 1,591,054 Amortization of intangible assets 191,372 176,375 65,389 64,544 247,557 Amortization of deferred and other charges 15,484 18,735 4,932 6,682 25,424 Loss (gain) from decrease in holdings in associates 1,372 (614) 1,026 (30) (595) Financing costs, net 416,786 265,459 228,870 25,705 440,429 Equity in profits of investees accounted by the equity method (2,405) (6,932) (761) (2,919) (11,184) Net capital gain (7,154) (32,389) (1,693) (24,415) (159,017) Share-based payment transactions - - - - 286,506 Payments to a former senior officer 5,750 - - - - Income tax expenses 504,936 455,004 132,240 177,377 488,393 Change in inventory 12,765 38,167 38,352 36,536 23,014 Change in trade receivables (304,013) (3,819) (195,369) (31,064) 109,100 Change in other receivables (25,890) 14,937 (264) 24,264 (107,854) Change in trade payables 17,607 65,215 225 46,866 (56,778) Change in suppliers (124,995) (138,204) 4,182 (10,908) (79,046) Change in provisions 67,712 (2,552) 22,474 2,856 27,327 Change in broadcasting rights (54,959) (23,425) (18,649) 11,061 (14,517) Change in employee benefits (212,133) (194,031) (20,376) (33,920) 168,758 Change in deferred and other income (8,501) (3,198) 125 (3,676) 11,509 2,665,227 2,697,351 966,092 983,230 3,740,105 Interest received 100,488 174,582 30,415 47,275 220,078 Dividend received 3,418 26,010 334 - 26,010 Income tax paid (326,207) (210,188) (101,817) (66,902) (277,573) Net cash from operating activities 2,442,926 2,687,755 895,024 963,603 3,708,620 Cash flows from investing activities Investment in intangible assets (132,181) (130,693) (40,053) (48,690) (209,733) Proceeds from sale of property, plant and equipment 133,278 23,336 16,883 10,431 47,804 Proceeds from realization of deferred expenses 4,213 272 - - - Current investments, net 18,667 78,487 11,292 171,156 1,491,439 Purchase of property, plant and equipment (680,956) (698,667) (270,630) (187,412) (953,226) Investment in deferred expenses and others (23,934) (12,032) (21,319) (6,667) - Proceeds from realization of investments and long-term loans 48,967 56,598 15,587 44,710 62,729 Purchase of investments and long-term loans - (18,184) - (5,856) (19,723)* Acquisition of a subsidiary (12,468) - - - - Net cash from (used in) investment activities (644,414) (700,883) (288,240) (22,328) 419,290
"Bezeq" The Israel Telecommunication Corp., Limited Condensed Interim Consolidated Statements of Cash Flows (cont'd) For the nine-month For the three-month For the period period ended September year ended ended September 30 30 December 31 2007 2006 2007 2006 2006 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) NIS NIS NIS NIS NIS thousands thousands thousands thousands thousands Cash flows for financing activities Receipt of 50,000 - - - 50,000 loans Issuance of debentures 1,814,415 - 1,057,602 - - Repayment of debentures (1,902,055) (262,081) (1,805,181) (83,025) (280,350) Repayment of loans (753,825) (1,145,132) (605,162) (757,869) (1,268,656) Short-term credit, net (55,640) 65,500 (32,871) 9,922 43,146 Dividends paid (2,099,920) (1,200,000) - - (1,600,000) Distribution of a dividend to the minority interest in a subsidiary , less minority interest transfers, net (3,928) - (3,928) - - Interest paid(357,008) (409,509) (158,437) (173,161) (601,752) Net cash used in financing activities (3,307,961) (2,951,222) (1,547,977) (1,004,133) (3,657,612) Net increase (decrease) in cash and cash equivalents(1,509,449) (964,350) (941,193) (62,858) 470,298 Cash and cash equivalents at the beginning of the period 2,631,790 2,158,773 2,063,408 1,256,603 2,158,773 Effect of (17,572) (5,943) (17,446) (5,265) 2,719 fluctuations in the rate of exchange on cash balances Cash and cash equivalents at the end of the period 1,104,769 1,188,480 1,104,769 1,188,480 2,631,790
Appendix to Condensed Interim Statements of Cash Flows
For the nine-month For the three-month For the year period ended September period ended September ended December 30 30 31 2007 2006 2007 2006 2006 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) NIS NIS NIS NIS NIS thousands thousands thousands thousands thousands Appendix of non-cash activities Purchase of property, plant and equipment, and intangible assets 109,444 149,958 109,444 149,958 141,518 Sale of property, plant and equipment on credit 55,079 43,749 55,079 43,749 161,800
Media Relations Contact: Mr. Yotam Yakir Bezeq Phone: +972-3-626-2600 Email: yyakir@bezeq.com Investor Relations Contact: Mr. Naftali Sternlicht Bezeq Phone: +972-2-539-5441 Email: ir@bezeq.com
Source: Bezeq
Media Relations Contact: Mr. Yotam Yakir, Bezeq, Phone: +972-3-626-2600, Email: yyakir@bezeq.com; Investor Relations Contact: Mr. Naftali Sternlicht, Bezeq, Phone: +972-2-539-5441, Email: ir@bezeq.com
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