B Communications Reports Fourth Quarter and Full Year 2012 Financial Results
B Communications Reports Fourth Quarter and Full Year 2012 Financial Results
Continued On-Track Progress Driven By Bezeq’s Continued Strong Cash Generation
Business Wire
RAMAT GAN, Israel -- March 14, 2013
B Communications Ltd. (NASDAQ Global Market: BCOM)(TASE: BCOM) today reported
its financial results for the fourth quarter and year ended December 31, 2012.
Bezeq’s Results: For the fourth quarter of 2012, the Bezeq Group reported
revenues of NIS 2.45 billion ($ 656 million) and operating profit of NIS 772
million ($ 207 million). Bezeq’s EBITDA for the fourth quarter totaled NIS 1.1
billion ($ 304 million), representing an EBITDA margin of 46%. Net income for
the period attributable to the shareholders of Bezeq totaled NIS 519 million
($ 139 million). Bezeq's cash flow from operating activities totaled NIS 1
billion ($ 268 million) during the fourth quarter of 2012.
Cash Position: As of December 31, 2012, B Communications’ unconsolidated cash
and cash equivalents totaled NIS 694 million ($ 186 million), its
unconsolidated total debt was NIS 4.1 billion ($ 1.1 billion) and its net debt
was NIS 3.4 billion ($ 901 million).
B Communications’ Unconsolidated Balance Sheet Data*
In millions
Convenience
translation into
U.S. dollars
December 31, (Note A)
2012 2011 2012
NIS NIS US$
Short term liabilities 515 526 138
Long term liabilities 3,542 3,874 949
Total liabilities 4,057 4,400 1,087
Cash and cash equivalents 694 354 186
Total net debt 3,363 4,046 901
* Does not include the balance sheet of Bezeq.
Dividends from Bezeq: On October 10, 2012, B Communications received two
dividend payments from Bezeq, which together totaled NIS 464 million ($ 124
million). These dividend payments included a current dividend of NIS 309
million ($ 83 million), representing B Communications’ share of Bezeq’s net
profit for the first half of 2012, and a special dividend of NIS 155 million
($ 41 million), representing its share of the fourth installment of six NIS
500 million ($ 134 million) special dividend payments declared by Bezeq and
approved by its shareholders in 2011.
In accordance with Bezeq's dividend policy, its Board of Directors recommended
the distribution of 100% of profits for the second half of 2012 as a cash
dividend of NIS 861 million ($ 231 million) to shareholders. Together with
this regular dividend, Bezeq will make the fifth installment of the special
dividend of NIS 500 million ($ 134 million). The total dividend to be
distributed will be NIS 1.361 billion ($ 365 million, or approximately NIS
0.50 per share). The regular dividend, which is subject to shareholder
approval, is expected to be paid together with the special dividend on May 13,
2013 to shareholders of record as of May 1, 2013. B Communications’ share of
the dividend distribution is expected to be approximately NIS 422 million ($
113 million).
B Communications’ Fourth Quarter and Full Year Consolidated Financial Results
B Communications’ revenues for the fourth quarter of 2012 were NIS 2,449
million ($ 656 million), an 8% decrease compared to NIS 2,650 million reported
in the fourth quarter of 2011. For the full year 2012, B Communications’
revenues totaled NIS 10,278 million ($ 2,753 million), a 10% decrease compared
to NIS 11,373 million reported in 2011. For both the current and the
prior-year periods, B Communications’ revenues consisted entirely of its share
of Bezeq’s revenues.
During the fourth quarter of 2012, B Communications recorded net amortization
expenses related to its Bezeq purchase price allocation (“Bezeq PPA”) of NIS
160 million ($43 million). From April 14, 2010, the date of the acquisition
of its interest in Bezeq, until December 31, 2012, B Communications has
amortized approximately 55% of the total Bezeq PPA. The Bezeq PPA amortization
expense is a non-cash expense that is subject to adjustment. If, for any
reason, B Communications finds it necessary or appropriate to make adjustments
to amounts already expensed, it may result in significant changes to its
audited financial reports, as well as to future financial statements.
Financial expenses, net: B Communications’ unconsolidated net financial
expenses for the fourth quarter of 2012 totaled NIS 39 million ($ 10 million).
These expenses consisted primarily of NIS 35 million ($ 9 million) of interest
and CPI linkage expenses on the long-term loans incurred to finance the Bezeq
acquisition and expenses of NIS 16 million ($ 4 million) related to its
publicly traded debentures. These expenses were offset in part by financial
income of NIS 11 million ($ 3 million) generated by short term investments.
The decrease in financial expenses recorded in the fourth quarter was
primarily attributable to the 0.66% decrease in the Israeli CPI, to which
approximately half of B Communications’ total debt is linked.
B Communications’ unconsolidated net financial expenses for 2012 totaled NIS
262 million ($ 70 million). These expenses consisted primarily of NIS 237
million ($ 63 million) of interest and CPI linkage expenses on the long-term
loans incurred to finance the Bezeq acquisition and NIS 53 million ($ 14
million) of expenses related to its publicly traded debentures. These expenses
were offset in part by financial income of NIS 29 million ($ 8 million)
generated by short term investments.
B Communications’ net profit attributable to shareholders for the fourth
quarter totaled NIS 70 million ($ 19 million), compared to a net loss of NIS
121 million reported in the fourth quarter of 2011. For the full year 2012, B
Communications’ net loss attributable to shareholders totaled NIS 35 million
($ 9 million), compared to a net loss of NIS 219 million reported in 2011.
B Communications’ Unconsolidated Financial Results
In millions
Convenience Convenience
translation translation
into into
Quarter ended U.S. dollars Year ended U.S. dollars
December 31, (Note A) December 31, (Note A)
2012 2011 2012 2012 2011 2012
NIS NIS US$ NIS NIS US$
Revenues - - - - - -
Financial (39) (84) (10) (262) (367) (70)
expenses, net
Other expenses (1) (2) - (4) (7) (1)
PPA
amortization, (50) (117) (13) (333) (407) (89)
net
PPA onetime - (92) - - (92) -
tax adjustment
Interest in
Bezeq's net 160 174 42 564 654 151
income
Net profit 70 (121) 19 (35) (219) (9)
(loss)
Comments of Management
Commenting on the results, Doron Turgeman, CEO of B Communications said,
“Against the backdrop of an exceedingly challenging communications market, the
stable platform and unique strength of Bezeq, our base asset, continues to
prove its long-term cash-generating power. During 2012, we succeeded in
increasing our unconsolidated cash reserves to their current strong level of
almost NIS 700 million ($ 188 million). In the quarters ahead, we will
continue our efforts to strengthen our financial stability and liquidity. We
are in the process of examining a number of offers received recently for the
potential re-structuring of our outstanding loans as a key to improving our
financial position. We are extremely proud of the net income reported this
quarter and looking forward, we believe in our ability to maintain
profitability in light of the fact that we expect to record lower PPA
amortization expenses in future periods.”
The financial results presented in this press release are preliminary
unaudited financial results. The final and complete results for the fourth
quarter and full year ended December 31, 2012 will be published when the
Company publishes its audited financial reports and files its Annual Report on
Form 20-F for 2012.
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 fourth quarter and year ended December 31, 2012. For a full discussion of
Bezeq’s results for the fourth quarter and full year of 2012, please refer to
its website: http://ir.bezeq.co.il.
Bezeq Group Q4 Q4 Change FY 2012 FY 2011 Change
(consolidated) 2012 2011
(NIS millions) (NIS millions)
Revenues 2,449 2,650 -7.6% 10,278 11,373 -9.6%
Operating profit 772 698 10.6% 3,035 3,242 -6.4%
EBITDA 1,133 1,053 7.6% 4,471 4,637 -3.6%
EBITDA margin 46.3% 39.7% 43.5% 40.8%
Net profit
attributable to 519 524 -1.0% 1,858 2,066 -10.1%
Bezeq shareholders
Diluted EPS (NIS) 0.19 0.19 0.0% 0.68 0.76 -10.5%
Cash flow from 1,002 859 16.6% 4,014 3,186 26.0%
operating activities
Payments for 192 544 -64.7% 1,235 1,637 -24.6%
investments, net
Free cash flow ^1 810 315 157.1% 2,779 1,549 79.4%
Net debt/EBITDA (end 1.79 1.57 1.79 1.57
of period) ^2
Net
debt/shareholders' 3.25 2.75 3.25 2.75
equity (end of
period)
^1 Free cash flow is defined as cash flows from operating activities less
net payments for investments.
^2 EBITDA in this calculation refers to the trailing twelve months.
Revenues of the Bezeq Group in 2012 amounted to NIS 10.28 billion compared to
NIS 11.37 billion in 2011, a decrease of 9.6%. The reduction in the Bezeq
Group’s revenues was primarily due to a decrease in revenues from its cellular
segment, specifically due to a reduction in revenues from handset sales
(decrease of NIS 704 million) together with a decrease in revenues from
cellular services (decrease of NIS 376 million). Bezeq Group’s revenues in the
fourth quarter of 2012 amounted to NIS 2.45 billion compared to NIS 2.65
billion in the corresponding quarter of 2011, a decrease of 7.6%.
Operating profit of the Bezeq Group in 2012 amounted to NIS 3.04 billion
compared to NIS 3.24 billion in 2011, a decrease of 6.4%. Earnings before
interest, taxes, depreciation and amortization (EBITDA) of the Bezeq Group in
2012 amounted to NIS 4.47 billion (EBITDA margin of 43.5%) compared to NIS
4.64 billion (EBITDA margin of 40.8%) in 2011, a decrease of 3.6%. Net profit
attributable to Bezeq’s shareholders amounted to NIS 1.86 billion compared to
NIS 2.07 billion in 2011, a decrease of 10.1%. Overall, the decline in
profitability metrics was due to a decrease in profitability of the cellular
segment, partially offset by a decrease in a provision for employee
retirement.
Operating profit of the Bezeq Group in the fourth quarter of 2012 amounted to
NIS 772 million, compared to NIS 698 million in the corresponding quarter of
2011, an increase of 10.6%. EBITDA of the Bezeq Group in the fourth quarter of
2012 amounted to NIS 1.13 billion (EBITDA margin of 46.3%), compared to NIS
1.05 billion (EBITDA margin of 39.7%) in the corresponding quarter of 2011, an
increase of 7.6%. The increase in operating profit and EBITDA was primarily
due to an increase in gains from the sale of real estate and copper as well as
a reduction in a provision for employee retirement compared to the fourth
quarter of 2011. Net profit attributable to Bezeq’s shareholders in the fourth
quarter of 2012 amounted to NIS 519 million compared to NIS 524 million in the
corresponding quarter of 2011, a decrease of 1.0%. The minor decline in net
profit was due to the increase in corporate tax expenses.
Cash flow from operating activities of the Bezeq Group in 2012 amounted to NIS
4.01 billion compared to NIS 3.19 billion in 2011, an increase of 26.0%. Cash
flow from operating activities of the Bezeq Group in the fourth quarter of
2012 amounted to NIS 1.00 billion compared to NIS 859 million in the
corresponding quarter of 2011, an increase of 16.6%. The increase was
primarily due to improved working capital in the cellular segment as a result
of a decrease in trade receivables.
Free cash flow of the Bezeq Group in 2012 amounted to NIS 2.78 billion
compared to NIS 1.55 billion in 2011, an increase of 79.4%. Free cash flow of
the Bezeq Group in the fourth quarter of 2012 amounted to NIS 810 million
compared to NIS 315 million in the corresponding quarter of 2011, an increase
of 157.1%. The increase in free cash flow was due to an increase in cash flow
from operating activities as well as the completion of major infrastructure
projects initiated in prior years specifically Bezeq’s NGN and submarine
cable.
As of December 31, 2012, the Bezeq Group’s gross financial debt was NIS 9.55
billion, compared to NIS 9.58 billion as of December 31, 2011. The Bezeq
Group’s net financial debt was NIS 8.00 billion compared with NIS 7.28 billion
as of December 31, 2011. At December 31, 2012, the Bezeq Group's net financial
debt to EBITDA ratio was 1.79, compared with 1.57 at December 31, 2011.
Notes:
Convenience Translation to Dollars: For the convenience of the
reader, certain of the reported NIS figures of December 31, 2012
have been presented in millions of U.S. dollars, translated at the
A. representative rate of exchange as of December 31, 2012 (NIS 3.733
= U.S. Dollar 1.00). The U.S. dollar ($) amounts presented should
not be construed as representing amounts receivable or payable in
U.S. dollars or convertible into U.S. dollars, unless otherwise
indicated.
Use of non-IFRS Measurements: We and the Bezeq Group’s management
regularly use supplemental non-IFRS financial measures internally
B. to understand, manage and evaluate our business and make operating
decisions. We believe these non-IFRS financial measures provide
consistent and comparable measures to help investors understand the
Bezeq Group’s current and future operating cash flow performance.
These non-IFRS financial measures may differ materially from the
non-IFRS financial measures used by other companies.
EBITDA is a non-IFRS financial measure generally defined as
earnings before interest, taxes, depreciation and amortization. The
Bezeq Group defines EBITDA as net income before financial income
(expenses), net, impairment and other charges, expenses recorded
for stock compensation in accordance with IFRS 2, income tax
expenses and depreciation and amortization. We present the Bezeq
Group’s EBITDA as a supplemental performance measure because we
believe that it facilitates operating performance comparisons from
period to period and company to company by backing out potential
differences caused by variations in capital structure, tax
positions (such as the impact of changes in effective tax rates or
net operating losses) and the age of, and depreciation expenses
associated with, fixed assets (affecting relative depreciation
expense).
EBITDA should not be considered in isolation or as a substitute for
net income or other statement of operations or cash flow data
prepared in accordance with IFRS as a measure of profitability or
liquidity. EBITDA does not take into account our debt service
requirements and other commitments, including capital expenditures,
and, accordingly, is not necessarily indicative of amounts that may
be available for discretionary uses. In addition, EBITDA, as
presented in this press release, may not be comparable to similarly
titled measures reported by other companies due to differences in
the way that these measures are calculated.
Reconciliation between the Bezeq Group’s results on an IFRS and
non-IFRS basis is provided in a table immediately following the
Company's consolidated results. Non-IFRS financial measures consist
of IFRS financial measures adjusted to exclude amortization of
acquired intangible assets, as well as certain business combination
accounting entries. The purpose of such adjustments is to give an
indication of the Bezeq Group’s performance exclusive of non-cash
charges and other items that are considered by management to be
outside of its core operating results. The Bezeq Group’s non-IFRS
financial measures are not meant to be considered in isolation or
as a substitute for comparable IFRS measures, and should be read
only in conjunction with its consolidated financial statements
prepared in accordance with IFRS.
About B Communications Ltd.
B Communications is a telecommunications-oriented holding company and its
primary holding is its controlling interest in Bezeq, The Israel
Telecommunication Corp., Israel’s largest telecommunications provider (TASE:
BZEQ). 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)
Convenience
translation into
U.S. dollars
$1 = NIS 3.733
2011 2012 2012
NIS NIS US$
Assets
Cash and cash equivalents 1,369 862 231
Investments including derivatives 1,284 1,379 369
Trade receivables 3,059 2,927 784
Other receivables 295 332 89
Inventory 204 123 33
Assets classified as held-for-sale 158 164 44
Total current assets 6,369 5,787 1,550
Investments including derivatives 119 90 24
Long-term trade and other receivables 1,499 1,074 288
Property, plant and equipment 7,143 6,630 1,776
Intangible assets 8,085 7,091 1,900
Deferred and other expenses 412 401 107
Investment in equity - accounted 1,059 1,005 269
investees (mainly loans)
Deferred tax assets 223 126 34
Total non-current assets 18,540 16,417 4,398
Total assets 24,909 22,204 5,948
B Communications Ltd.
Consolidated Statements of Financial Position as at December 31
(In millions)
Convenience
translation into
U.S. dollars
$1 = NIS 3.733
2011 2012 2012
NIS NIS US$
Liabilities
Short term bank credit, current
maturities of long-term liabilities and 1,185 1,551 416
debentures
Trade payables 892 792 212
Other payables including derivatives 840 733 196
Dividend payable 669 669 179
Current tax liabilities 499 545 146
Provisions 186 155 42
Employee benefits 389 258 69
Total current liabilities 4,660 4,703 1,260
Debentures 5,403 5,015 1,343
Bank loans 6,753 6,453 1,729
Loans from institutions and others 544 540 145
Dividend payable 636 - -
Employee benefits 229 246 66
Other liabilities 186 67 18
Provisions 69 66 18
Deferred tax liabilities 1,426 1,054 282
Total non-current liabilities 15,246 13,441 3,601
Total liabilities 19,906 18,144 4,861
Equity
Total equity attributable to Company's 936 901 241
shareholders
Non controlling interest 4,067 3,159 846
Total equity 5,003 4,060 1,087
Total liabilities and equity 24,909 22,204 5,948
B Communications Ltd.
Consolidated Statements of income for the year ended December 31
(In millions, except per share data)
Convenience
translation into
U.S. dollars
$1 = NIS 3.733
2011 2012 2012
NIS NIS US$
Revenues 11,373 10,278 2,753
Cost and expenses
Depreciation and amortization 2,984 2,805 751
Salaries 2,114 1,984 531
General and operating expenses 4,462 3,992 1,069
Other operating (income) expenses, net 326 (16) (4)
9,886 8,765 2,347
Operating income 1,487 1,513 406
Finance expenses, net 498 376 101
Income after financing expenses, net 989 1,137 305
Share in losses of equity – accounted 216 245 66
investees
Income before income tax 773 892 239
Income tax 653 406 109
Net income for the year 120 486 130
Income (loss) attributable to:
Owners of the Company (219) (35) (9)
Non-controlling interest 339 521 139
Net income for the year 120 486 130
Loss per share, basic (7.34) (1.16) (0.31)
Loss per share, diluted (7.38) (1.18) (0.32)
B Communications Ltd.
Reconciliation for NON-IFRS Measures
EBITDA
The following is a reconciliation of the Bezeq Group operating income to
EBITDA:
In millions
Convenience
translation into
U.S. dollars
$1 = NIS 3.733
Year ended
Year ended December 31, December 31,
2011 2012 2012
NIS NIS US$
Operating income 3,242 3,035 813
Depreciation and 1,395 1,436 385
amortization
EBITDA 4,637 4,471 1,198
Free Cash Flow
The following table shows the calculation of the Bezeq Group free cash flow:
In millions
Convenience
translation into
U.S. dollars
$1 = NIS 3.733
Year ended
Year ended December 31, December 31,
2011 2012 2012
NIS NIS US$
Cash flow from operating 3,186 4,014 1,075
activities
Purchase of property, plant and (1,548) (1,271) (341)
equipment
Investment in intangible assets (355) (269) (72)
and deferred expenses
Proceeds from the sale of
property, plant and equipment and 266 305 82
refund from the Ministry of
Communications
Free cash flow 1,549 2,779 744
Contact:
Idit Cohen – IR Manager
+972-3-924-0000
idit@igld.com
or
Investor relations contacts:
Mor Dagan - Investor Relations
+972-3-516-7620
mor@km-ir.co.il
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement
Rate this Page