SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
F
O R M 6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For
the month of March 2016
INTERNET
GOLD-GOLDEN LINES LTD.
(Name
of Registrant)
2
Dov Friedman Street, Ramat Gan 5250301, Israel
(Address
of Principal Executive Office)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F ☒ Form 40-F ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Indicate
by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes
☐ No ☒
If
"Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ___________
Internet
Gold-Golden Lines Ltd.
EXPLANATORY
NOTE
The
following exhibit is attached:
EXHIBIT NO. |
|
DESCRIPTION |
|
|
|
99.1 |
|
Internet Gold Reports its Financial Results for the Fourth Quarter and Full Year 2015. |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
|
INTERNET
GOLD-GOLDEN LINES LTD. |
|
(Registrant) |
|
|
|
|
By
|
/s/
Doron Turgeman |
|
|
Doron
Turgeman |
|
|
Chief
Executive Officer |
Date:
March 17, 2016
EXHIBIT INDEX
EXHIBIT NO. |
|
DESCRIPTION |
|
|
|
99.1 |
|
Internet Gold Reports its Financial Results for the Fourth Quarter and Full Year 2015. |
4
Exhibit 99.1
Internet
Gold Reports its Financial Results for
the Fourth Quarter and Full Year 2015
-
Net Income Attributable to Shareholders for the Fourth Quarter of 2015 Totaled NIS 70 Million -
Ramat
Gan, Israel - March 17, 2016 - Internet Gold – Golden Lines Ltd. (NASDAQ Global Select Market and TASE: IGLD) today
reported its financial results for the fourth quarter and year ended December 31, 2015. Internet Gold holds the controlling interest
in B Communications Ltd. (TASE and Nasdaq: BCOM), which in turn holds the controlling interest in Bezeq, The Israel Telecommunication
Corp., Israel’s largest telecommunications provider (TASE: BEZQ).
Commenting
on the financial results, Doron Turgeman, CEO of Internet Gold said: “2015 was a great year for internet Gold as we
changed our company financial position significantly. The improvement in all important debt parameters was reflected in both,
the decrease in the yields of both our debentures series during 2015, and the increase in our stock price which rose by more than
125% since January 2015. A few weeks ago we become part of Israel’s A issuers group when the local rating agency, Midroog,
notched up the ratings for our debt. With full confidence in B Communications’ dividend generating power, we will continue
our efforts to improve both our debt and equity positions.”
Dividend
from B Communications: On November 19, 2015, B Communications' board of directors declared a cash dividend in the amount of
NIS 38 million ($10 million) or NIS 1.27 ($0.32) per share. Internet Gold received approximately NIS 25 million ($6 million) on
December 23, 2015.
In
accordance with Bezeq's dividend policy, its Board of Directors recommended the distribution of 100% of its profits for the second
half of 2015 as a cash dividend of NIS 776 million ($199 million) to its shareholders. The dividend, which is subject to shareholder
approval, is expected to be paid on May 30, 2016 to shareholders of record as of May 17, 2016. B Communications is expected to
receive approximately NIS 204 million ($52 million) in dividends if the distribution is approved by Bezeq’s shareholders.
Bezeq’s
Results: For the fourth quarter of 2015, the Bezeq Group reported revenues of NIS 2.61 billion ($668 million) and operating
profit of NIS 488 million ($125 million). Bezeq’s EBITDA for the fourth quarter totaled NIS 947 million ($243 million),
representing an EBITDA margin of 36.3%. Net profit for the period attributable to Bezeq’s shareholders totaled NIS 369 million
($95 million). Bezeq's cash flow from operating activities during the period totaled NIS 889 million ($228 million).
Cash
Position: As of December 31, 2015, Internet Gold’s unconsolidated cash and cash equivalents and short term investments
totaled NIS 277 million ($71 million), its unconsolidated gross debt was NIS 1.1 billion ($277 million) and its unconsolidated
net debt was NIS 802 million ($206 million).
Internet
Gold's Unconsolidated Balance Sheet Data (1)
(In millions) | |
| | |
| | |
Convenience | |
| |
| | |
| | |
translation into | |
| |
| | |
| | |
U.S. dollars | |
| |
| | |
| | |
(Note A) | |
| |
December 31, | | |
December 31, | | |
December 31, | |
| |
2014 | | |
2015 | | |
2015 | |
| |
NIS | | |
NIS | | |
US$ | |
Short term liabilities | |
| 67 | | |
| 153 | | |
| 39 | |
Long term liabilities | |
| 1,077 | | |
| 926 | | |
| 238 | |
Total liabilities | |
| 1,144 | | |
| 1,079 | | |
| 277 | |
Liquidity balances | |
| 322 | | |
| 277 | | |
| 71 | |
Total net debt | |
| 822 | | |
| 802 | | |
| 206 | |
(1) | Does
not include the consolidated balance sheet of B Communications and its subsidiaries. |
Sale
of B Communications shares: On January 14, 2016, the Company sold 575,000 ordinary shares of B Communications, representing
approximately 1.92% of its issued and outstanding shares. The total proceeds from the sale amounted to approximately NIS 56 million
($14 million). As a result of the sale, the Company now holds approximately 65% of the outstanding shares of B Communications.
The fourth quarter of 2015 results included a NIS 11 million ($3 million) income tax benefit which was recorded against a deferred
tax asset that will be realized in the first quarter of 2016. According to International Accounting Standard No. 12 a tax asset
is recognized for deductible temporary differences arising from an investment in a subsidiary to the extent that it is probable
that the temporary difference will reverse in the foreseeable future and taxable profit will be available against, which the temporary
difference can be utilized. This tax asset reflects the sale of our B Communications shares in the first quarter of 2016.
Internet
Gold's Cash Management: Internet Gold manages its cash balances according to an investment policy that was approved by its
board of directors. The investment policy seeks to preserve principal and maintain adequate liquidity while maximizing the income
received from investments without significantly increasing the risk of loss. According to Internet Gold's investment policy approximately
80% of the funds must be invested in investment-grade securities.
Internet
Gold’s Fourth Quarter and Full Year Consolidated Financial Results
Internet
Gold's consolidated revenues for the fourth quarter of 2015 totaled NIS 2.61 billion ($668 million), a 15.2% increase compared
to the NIS 2.26 billion reported in the fourth quarter of 2014. For the full year 2015, Internet Gold's revenues totaled NIS 9.99
billion ($2.56 billion), a 10.3% increase compared to NIS 9.06 billion reported in 2014. Both in the fourth quarter and in the
full year, the increase resulted from the full consolidation of Yes beginning in the second
quarter of 2015. For both the current and the prior-year periods, Internet Gold’s consolidated
revenues consisted entirely of Bezeq’s revenues.
Internet
Gold's consolidated operating income for the fourth quarter of 2015 totaled NIS 372 million ($95 million), a 24.1% decrease compared
with NIS 490 million reported in the fourth quarter of 2014. The decrease was due to a one-time provision for employee retirement
in the fourth quarter of 2015. For the full year 2015, Internet Gold's consolidated operating income totaled NIS 2.01 billion
($516 million), a 21.8% decrease compared with NIS 2.58 billion reported in 2014. The decrease was primarily attributed to Bezeq's
sale of Yad2 in the second quarter of 2014 that resulted in NIS 582 million ($149 million) of other operating income in 2014.
Internet
Gold's consolidated net income for the fourth quarter of 2015 totaled NIS 306 million ($78 million), an 8.1% increase compared
with NIS 283 million reported in the fourth quarter of 2014. For the full year 2015, Internet Gold's consolidated net income totaled
NIS 1.08 billion ($278 million), a 3.7% increase compared with NIS 1.04 billion reported in 2014.
Internet
Gold’s Fourth Quarter and Full Year Unconsolidated Financial Results
As
of December 31, 2015 Internet Gold held approximately 67% of B Communications’ outstanding shares. Accordingly, Internet
Gold's interest in B Communications’ net income for the fourth quarter of 2015 totaled NIS 69 million ($17 million) compared
with NIS 52 million in the fourth quarter of 2014. For the full year 2015, Internet Gold's interest in B Communications’
net income totaled NIS 140 million ($35 million) compared with its interest in B Communications’ loss of NIS 15 million
in 2014.
Internet
Gold’s unconsolidated net financial expenses for the fourth quarter of 2015 totaled NIS 9 million ($2 million) compared
with NIS 19 million in the fourth quarter of 2014. These expenses consist of NIS 10 million ($2 million) of interest and CPI linkage
expenses related to its publicly-traded debentures which were partially offset by NIS 1 million of financial income generated
by short term investments. For the full year 2015, Internet Gold’s unconsolidated net financial expenses totaled NIS 60
million ($15 million) compared with NIS 84 million in 2014. These expenses consisted of NIS 63 million ($16 million) of interest
and CPI linkage expenses related to its publicly-traded debentures which were partially offset by NIS 3 million ($1 million) of
financial income generated by short term investments.
Internet
Gold's net income attributable to shareholders for the fourth quarter of 2015 totaled NIS 70 million ($18 million) compared with
net income attributable to shareholders of NIS 32 million in the fourth quarter of 2014. For the full year 2015, Internet Gold’s
net income attributable to shareholders totaled NIS 87 million ($22 million), compared with a loss of NIS 103 million in 2014.
In millions | |
| | |
| | |
Convenience | | |
| | |
| | |
Convenience | |
| |
| | |
| | |
translation into | | |
| | |
| | |
translation into | |
| |
Quarter ended | | |
U.S. dollars | | |
Year ended | | |
U.S. dollars | |
| |
December 31, | | |
(Note A) | | |
December 31, | | |
(Note A) | |
| |
2014 | | |
2015 | | |
2015 | | |
2014 | | |
2015 | | |
2015 | |
| |
NIS | | |
NIS | | |
US$ | | |
NIS | | |
NIS | | |
US$ | |
Revenues | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Financial expenses, net | |
| (19 | ) | |
| (9 | ) | |
| (2 | ) | |
| (84 | ) | |
| (60 | ) | |
| (15 | ) |
Income tax benefit | |
| - | | |
| 11 | | |
| 3 | | |
| - | | |
| 11 | | |
| 3 | |
Operating expenses | |
| (1 | ) | |
| (1 | ) | |
| - | | |
| (4 | ) | |
| (4 | ) | |
| (1 | ) |
Interest in BCOM's net income (loss) |
|
|
52 |
|
|
|
69 |
|
|
|
17 |
|
|
|
(15 |
) |
|
|
140 |
|
|
|
35 |
|
Net income (loss) | |
| 32 | | |
| 70 | | |
| 18 | | |
| (103 | ) | |
| 87 | | |
| 22 | |
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, 2015. For a full discussion of Bezeq’s results for
the fourth quarter and full year ended December 2015, please refer to its website: http://ir.bezeq.co.il.
Bezeq Group (consolidated) | |
Q4 2015 | | |
Q4 2014 | | |
% change | | |
FY 2015 | | |
FY 2014 | | |
% change | |
| |
(NIS millions) | |
|
|
|
|
(NIS millions) | | |
| |
Revenues | |
| 2,606 | | |
| 2,262 | | |
| 15.2 | % | |
| 9,985 | | |
| 9,055 | | |
| 10.3 | % |
Operating profit | |
| 488 | | |
| 633 | | |
| (22.9 | %) | |
| 2,570 | | |
| 3,226 | | |
| (20.3 | %) |
EBITDA | |
| 947 | | |
| 954 | | |
| (0.7 | %) | |
| 4,254 | | |
| 4,507 | | |
| (5.6 | %) |
EBITDA margin | |
| 36.3 | % | |
| 42.2 | % | |
| | | |
| 42.6 | % | |
| 49.8 | % | |
| | |
Net profit | |
| 369 | | |
| 416 | | |
| (11.3 | %) | |
| 1,721 | | |
| 2,111 | | |
| (18.5 | %) |
Dated EPS (NIS) | |
| 0.13 | | |
| 0.15 | | |
| (13.3 | %) | |
| 0.62 | | |
| 0.77 | | |
| (19.5 | %) |
Cash flow from operating activities | |
| 889 | | |
| 739 | | |
| 20.3 | % | |
| 3,740 | | |
| 3,796 | | |
| (1.5 | %) |
Payments for investments | |
| 329 | | |
| 315 | | |
| 4.4 | % | |
| 1,635 | | |
| 1,275 | | |
| 28.2 | % |
Free
cash flow 1 | |
| 592 | | |
| 507 | | |
| 16.8 | % | |
| 2,256 | | |
| 2,751 | | |
| (18.0 | %) |
Net
debt/EBITDA (end of period) 2 | |
| 2.21 | | |
| 1.60 | | |
| | | |
| 2.21 | | |
| 1.60 | | |
| | |
1
Free cash flow is defined as cash flow 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 2015 amounted to NIS 9.99 billion ($2.56 billion) compared with NIS 9.06 billion in 2014, an increase of
10.3%. Revenues of the Bezeq Group in the fourth quarter of 2015 amounted to NIS 2.61 billion ($668 million) compared with
NIS 2.26 billion in the corresponding quarter of 2014, an increase of 15.2%.
The
increase was due to the consolidation of Yes revenues as of the second quarter of 2015 in the amount of NIS 1.33 billion ($342
million), including NIS 449 million ($115 million) in the fourth quarter of 2015, as well as an increase in the revenues of Bezeq
Fixed-Line and Bezeq International. The increase was partially offset by lower revenues at Pelephone.
Salary
expenses of the Bezeq Group in 2015 amounted to NIS 1.96 ($502 million) billion compared with NIS 1.77 billion in 2014, an increase
of 10.7%. Salary expenses of the Bezeq Group in the fourth quarter of 2015 amounted to NIS 515 million ($132 million) compared
with NIS 440 million in the corresponding quarter of 2014, an increase of 17.0%.
The
increase was due to the consolidation of Yes salary expenses as of the second quarter of 2015 in the amount of NIS 201
million ($52 million), including NIS 70 million ($18 million) in the fourth quarter of 2015. The increase was partially offset
by a decrease in salary expenses for Pelephone due to continued streamlining efforts.
Operating
expenses of the Bezeq Group in 2015 amounted to NIS 3.87 billion ($992 million) compared with NIS 3.37 billion in 2014, an increase
of 14.9%. Operating expenses of the Bezeq Group in the fourth quarter of 2015 amounted to NIS 1.07 billion ($274 million) compared
with NIS 853 million in the corresponding quarter of 2014, an increase of 25.2%.
The
increase was due to the consolidation of Yes operating expenses as of the second quarter of 2015 in the amount of NIS 695 million
($178 million), including NIS 244 million ($62 million) in the fourth quarter of 2015. The increase was partially offset by a
decrease in operating expenses at Pelephone and Bezeq Fixed-Line due to continued streamlining procedures, among other factors.
Depreciation
and amortization expenses of the Bezeq Group in 2015 amounted to NIS 1.68 billion ($432 million) compared with NIS 1.28 billion
in 2014, an increase of 31.5%. Depreciation and amortization expenses of the Bezeq Group in the fourth quarter of 2015 amounted
to NIS 459 million ($118 million) compared with NIS 321 million in the corresponding quarter of 2014, an increase of 43.0%.
The
increase was due to the consolidation of Yes depreciation and amortization expenses as of the second quarter of 2015 in
the amount of NIS 245 million ($63 million), including NIS 88 million ($23 million) in the fourth quarter of 2015, as well as
from the amortization of purchase price allocation costs incurred from Bezeq’s gaining control over Yes.
Other
operating income of the Bezeq Group in 2015 amounted to NIS 95 million ($24 million) compared with NIS 586 million in 2014, a
decrease of 83.8%. The decrease was due to the one-time gain of NIS 582 million ($149 million) recorded in 2014 from the sale
of Coral Tel Ltd., the operator of the "Yad2" web site. Such decrease was partially set off due to higher capital gains
resulted from the sale of real estate assets by Bezeq Fixed-Line.
Other
operating expenses of the Bezeq Group in the fourth quarter of 2015 amounted to NIS 76 million ($19 million) compared with NIS
15 million in the corresponding quarter of 2014, an increase of 406.7%. The increase in other operating expenses was primarily
due to an increase in a provision for the early retirement of employees.
Operating
profit of the Bezeq Group in 2015 amounted to NIS 2.57 billion ($659 million) compared with NIS 3.23 billion in 2014, a decrease
of 20.3%. Earnings before interest, taxes, depreciation and amortization (EBITDA) of the Bezeq Group in 2015 amounted to NIS 4.25
billion ($1.09 billion) (EBITDA margin of 42.6%) compared with NIS 4.51 billion (EBITDA margin of 49.8%) in 2014, a decrease of
5.6%.
Operating
profit of the Bezeq Group in the fourth quarter of 2015 amounted to NIS 488 million ($125 million) compared with NIS 633
million in the corresponding quarter of 2014, a decrease of 22.9%. EBITDA of the Bezeq Group in the fourth quarter of 2015 amounted
to NIS 947 million ($243 million) (EBITDA margin of 36.3%) compared with NIS 954 million (EBITDA margin of 42.2%) in the corresponding
quarter of 2014, an increase of 0.7%.
Financing
expenses, net of the Bezeq Group in 2015 amounted to NIS 263 million ($67 million) compared with NIS 130 million in 2014, an increase
of 102.3%. The increase was primarily due to financing income from shareholder loans to Yes which were recorded in 2014 and were
not included in the consolidated results as of April 1, 2015 due to the consolidation of Yes. Such increase was partially set
off as a result of the cancellation of taxes' interest related provision owed by Bezeq Fixed-Line for previous years. Such cancellation
was executed further to the proposed agreement with the Tax Authorities. The consolidation of Yes financing expenses beginning
in the second quarter of 2015 in the amount of NIS 91 million ($23 million) was offset by the amortization of purchase price allocation
costs attributed to the Yes debentures.
Financing
income, net of the Bezeq Group in the fourth quarter of 2015 amounted to NIS 3 million ($1 million) compared with financing
expenses net of NIS 17 million in the corresponding quarter of 2014. Financing income, net in the fourth quarter of 2015 included
the cancellation of a provision for interest on taxes for prior years owed by Bezeq Fixed-Line further to the proposed agreement
with the Tax Authorities.
Net
profit of the Bezeq Group in 2015 amounted to NIS 1.72 billion ($441 million) compared with NIS 2.11 billion in 2014, a decrease
of 18.5%. Net profit of the Bezeq Group in the fourth quarter of 2015 amounted to NIS 369 million ($95 million) compared
with NIS 416 million in the corresponding quarter of 2014, a decrease of 11.3%.
Cash
flow from operating activities of the Bezeq Group in 2015 amounted to NIS 3.74 billion ($958 million) compared with NIS 3.80 billion
in 2014, a decrease of 1.5%. Cash flow from operating activities was impacted by lower cash flow at Pelephone as a result of a
decrease in profitability and changes in working capital and were offset by the consolidation of Yes’ cash flow from operating
activities as of the second quarter of 2015 which totaled NIS 356 million ($91 million) as well as an increase in cash flow at
Bezeq Fixed-Line.
Cash
flow from operating activities of the Bezeq Group in the fourth quarter of 2015 amounted to NIS 889 million ($228 million)
compared with NIS 739 million in the corresponding quarter of 2014, an increase of 20.3%. The increase resulted from higher cash
flow at Bezeq Fixed-Line as well as the consolidation of Yes’ cash flow in the amount of NIS 105 million ($27 million) in
the fourth quarter of 2015. The increase was partially offset by lower cash flow at Pelephone.
Payments
for investments (Capex) of the Bezeq Group in 2015 amounted to NIS 1.64 billion ($419 million) compared with NIS 1.28 billion
in 2014, an increase of 28.2%. The increase in investments was primarily due to the consolidation of Yes investments as of the
second quarter of 2015 in the amount of NIS 200 million ($51 million), as well as an increase in investments at Pelephone and
Bezeq Fixed-Line.
Payments
for investments of the Bezeq Group in the fourth quarter of 2015 amounted to NIS 329 million ($84 million) compared with NIS 315
million in the corresponding quarter of 2015, an increase of 4.4%.
Free
cash flow of the Bezeq Group in 2015 amounted to NIS 2.26 ($578 million) billion compared with NIS 2.75 billion in 2014, a decrease
of 18.0%. Free cash flow of the Bezeq Group in the fourth quarter of 2015 amounted to NIS 592 million ($152 million) compared
with NIS 507 million in the corresponding quarter of 2014, a decrease of 16.8%.
Net
financial debt of the Bezeq Group amounted to NIS 9.40 billion ($2.41 billion) as of December 31, 2015 compared with NIS 7.20
billion as of December 31, 2014. At December 31, 2015, the Bezeq Group's net financial debt to EBITDA ratio was 2.21, compared
with 1.60 as of December 31, 2014.
Notes:
A. | Convenience
Translation to Dollars: For the convenience of the reader, certain of the reported
NIS figures of December 31, 2015 have been presented in millions of U.S. dollars, translated
at the representative rate of exchange as of December 31, 2015 (NIS 3.902 = U.S. Dollar
1.00). The U.S. dollar ($) 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. |
B. | Use
of non-IFRS Measurements: 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. 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
Internet Gold
Internet
Gold is a telecommunications-oriented holding company which is a controlled subsidiary of Eurocom Communications Ltd. Internet
Gold’s primary holding is its controlling interest in B Communications Ltd. (TASE and Nasdaq: BCOM), which in turn holds
the controlling interest in Bezeq, The Israel Telecommunication Corp., Israel’s largest telecommunications provider (TASE:
BEZQ). Internet Gold’s shares are traded on NASDAQ and the TASE under the symbol IGLD. For more information, please visit
the following Internet sites:
www.igld.com
www.bcommunications.co.il
http://ir.bezeq.co.il
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.
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
Internet Gold – Golden Lines Ltd.
Consolidated
Statements of Financial Position as at December 31,
(In
millions)
| |
| | |
| | |
Convenience translation into
U.S. dollars (Note A | |
| |
2014 | | |
2015 | | |
2015 | |
| |
NIS | | |
NIS | | |
US$ | |
| |
| | |
| | |
| |
Assets | |
| | |
| | |
| |
Cash and cash equivalents | |
| 732 | | |
| 619 | | |
| 158 | |
Restricted cash | |
| 65 | | |
| 155 | | |
| 40 | |
Investments, including derivative financial instruments | |
| 3,406 | | |
| 1,774 | | |
| 455 | |
Trade receivables, net | |
| 2,227 | | |
| 2,058 | | |
| 527 | |
Other receivables | |
| 242 | | |
| 270 | | |
| 69 | |
Inventory | |
| 96 | | |
| 115 | | |
| 30 | |
Assets classified as held-for-sale | |
| 52 | | |
| 16 | | |
| 4 | |
| |
| | | |
| | | |
| | |
Total current assets | |
| 6,820 | | |
| 5,007 | | |
| 1,283 | |
| |
| | | |
| | | |
| | |
Investments, including derivative financial instruments | |
| 271 | | |
| 285 | | |
| 73 | |
Long-term trade and other receivables | |
| 566 | | |
| 674 | | |
| 173 | |
Property, plant and equipment | |
| 6,572 | | |
| 7,197 | | |
| 1,844 | |
Intangible assets | |
| 5,908 | | |
| 7,118 | | |
| 1,824 | |
Deferred and other expenses | |
| 364 | | |
| 358 | | |
| 92 | |
Broadcasting rights | |
| - | | |
| 456 | | |
| 117 | |
Investment in equity-accounted investee | |
| 1,057 | | |
| 25 | | |
| 6 | |
Deferred tax assets | |
| - | | |
| 1,290 | | |
| 331 | |
| |
| | | |
| | | |
| | |
Total non-current assets | |
| 14,738 | | |
| 17,403 | | |
| 4,460 | |
| |
| | | |
| | | |
| | |
Total assets | |
| 21,558 | | |
| 22,410 | | |
| 5,743 | |
Internet
Gold – Golden Lines Ltd.
Consolidated
Statements of Financial Position as at December 31, (cont’d)
(In
millions)
| |
| | |
| | |
Convenience translation into U.S. dollars (Note A) | |
| |
2014 | | |
2015 | | |
2015 | |
| |
NIS | | |
NIS | | |
US$ | |
| |
| | |
| | |
| |
Liabilities | |
| | |
| | |
| |
Bank loans and credit and debentures | |
| 1,561 | | |
| 2,219 | | |
| 568 | |
Trade payables | |
| 664 | | |
| 913 | | |
| 234 | |
Related party | |
| - | | |
| 233 | | |
| 60 | |
Other payables, including derivatives | |
| 757 | | |
| 804 | | |
| 206 | |
Current tax liabilities | |
| 671 | | |
| 705 | | |
| 180 | |
Provisions | |
| 62 | | |
| 100 | | |
| 26 | |
Employee benefits | |
| 259 | | |
| 378 | | |
| 97 | |
Total current liabilities | |
| 3,974 | | |
| 5,352 | | |
| 1,371 | |
| |
| | | |
| | | |
| | |
Bank loans and debentures | |
| 13,419 | | |
| 13,215 | | |
| 3,387 | |
Employee benefits | |
| 233 | | |
| 240 | | |
| 61 | |
Other liabilities | |
| 262 | | |
| 227 | | |
| 58 | |
Provisions | |
| 69 | | |
| 46 | | |
| 12 | |
Deferred tax liabilities | |
| 835 | | |
| 729 | | |
| 187 | |
Total non-current liabilities | |
| 14,818 | | |
| 14,457 | | |
| 3,705 | |
| |
| | | |
| | | |
| | |
Total liabilities | |
| 18,792 | | |
| 19,809 | | |
| 5,076 | |
| |
| | | |
| | | |
| | |
Equity | |
| | | |
| | | |
| | |
Total equity attributable to equity holders of the Company | |
| (183 | ) | |
| (93 | ) | |
| (24 | ) |
Non-controlling interests | |
| 2,949 | | |
| 2,694 | | |
| 691 | |
| |
| | | |
| | | |
| | |
Total equity | |
| 2,766 | | |
| 2,590 | | |
| 667 | |
| |
| | | |
| | | |
| | |
Total liabilities and equity | |
| 21,558 | | |
| 22,410 | | |
| 5,743 | |
Internet
Gold – Golden Lines Ltd.
Consolidated
Statements of Income for the Year Ended December 31,
(In
millions, except per share data)
| |
| | |
| | |
Convenience translation into U.S. dollars (Note A) | |
| |
2014 | | |
2015 | | |
2015 | |
| |
NIS | | |
NIS | | |
US$ | |
| |
| | |
| | |
| |
Revenues | |
| 9,055 | | |
| 9,985 | | |
| 2,559 | |
| |
| | | |
| | | |
| | |
Cost and expenses | |
| | | |
| | | |
| | |
Depreciation and amortization | |
| 1,873 | | |
| 2,131 | | |
| 546 | |
Salaries | |
| 1,771 | | |
| 1,960 | | |
| 502 | |
General and operating expenses | |
| 3,371 | | |
| 3,878 | | |
| 994 | |
Other operating expense (income), net | |
| (535 | ) | |
| 3 | | |
| 1 | |
| |
| | | |
| | | |
| | |
| |
| 6,480 | | |
| 7,972 | | |
| 2,043 | |
| |
| | | |
| | | |
| | |
Operating income | |
| 2,575 | | |
| 2,013 | | |
| 516 | |
| |
| | | |
| | | |
| | |
Financing expenses, net | |
| 694 | | |
| 595 | | |
| 152 | |
| |
| | | |
| | | |
| | |
Income after financing expenses, net | |
| 1,881 | | |
| 1,418 | | |
| 364 | |
| |
| | | |
| | | |
| | |
Share of loss (income) in equity-accounted investee | |
| 170 | | |
| (12 | ) | |
| (3 | ) |
| |
| | | |
| | | |
| | |
Income before income tax | |
| 1,711 | | |
| 1,430 | | |
| 367 | |
| |
| | | |
| | | |
| | |
Income tax | |
| 667 | | |
| 347 | | |
| 89 | |
| |
| | | |
| | | |
| | |
Net income for the period | |
| 1,044 | | |
| 1,083 | | |
| 278 | |
| |
| | | |
| | | |
| | |
Income (loss) attributable to: | |
| | | |
| | | |
| | |
Owners of the company | |
| (103 | ) | |
| 87 | | |
| 22 | |
Non-controlling interests | |
| 1,147 | | |
| 996 | | |
| 256 | |
| |
| | | |
| | | |
| | |
Net income for the period | |
| 1,044 | | |
| 1,083 | | |
| 278 | |
| |
| | | |
| | | |
| | |
Earnings per share | |
| | | |
| | | |
| | |
Basic income (loss) per share | |
| (5.38 | ) | |
| 3.97 | | |
| 1.02 | |
Diluted income (loss) per share | |
| (5.50 | ) | |
| 3.90 | | |
| 1.00 | |
Internet
Gold – Golden Lines Ltd.
Reconciliation
for NON-IFRS Measures
EBITDA
The
following is a reconciliation of the Bezeq Group’s operating income to EBITDA:
In
millions
| |
Quarter ended December 31, | | |
Year ended December 31, | |
| |
| | |
| | |
Convenience translation into U.S. dollars | | |
| | |
| | |
Convenience translation into U.S. dollars | |
| |
| | |
| | |
(Note A) | | |
| | |
| | |
(Note A) | |
| |
2014 | | |
2015 | | |
2015 | | |
2014 | | |
2015 | | |
2015 | |
| |
NIS | | |
NIS | | |
US$
| | |
NIS | | |
NIS | | |
US$
| |
| |
| | |
| | |
| | |
| | |
| | |
| |
Operating income | |
| 633 | | |
| 488 | | |
| 125 | | |
| 3,226 | | |
| 2,570 | | |
| 659 | |
Depreciation and amortization | |
| 321 | | |
| 459 | | |
| 118 | | |
| 1,281 | | |
| 1,684 | | |
| 431 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
EBITDA | |
| 954 | | |
| 947 | | |
| 243 | | |
| 4,507 | | |
| 4,254 | | |
| 1,090 | |
Free
Cash Flow
The
following table shows the calculation of the Bezeq Group’s free cash flow:
In
millions
| |
Quarter ended December
31, | | |
Year ended December 31, | |
| |
| | |
| | |
Convenience
translation into
U.S. dollars (Note
A) | | |
| | |
| | |
Convenience
translation into
U.S. dollars (Note
A) | |
| |
2014 | | |
2015 | | |
2015 | | |
2014 | | |
2015 | | |
2015 | |
| |
NIS | | |
NIS | | |
US$ | | |
NIS | | |
NIS | | |
US$ | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Cash flow from operating activities | |
| 739 | | |
| 889 | | |
| 228 | | |
| 3,796 | | |
| 3,740 | | |
| 958 | |
Purchase of property, plant and equipment | |
| (261 | ) | |
| (286 | ) | |
| (73 | ) | |
| (1,081 | ) | |
| (1,324 | ) | |
| (339 | ) |
Investment in intangible assets and deferred expenses | |
| (54 | ) | |
| (43 | ) | |
| (11 | ) | |
| (194 | ) | |
| (311 | ) | |
| (80 | ) |
Proceeds from the sale of property, plant and equipment | |
| 83 | | |
| 32 | | |
| 8 | | |
| 230 | | |
| 151 | | |
| 39 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Free cash flow | |
| 507 | | |
| 592 | | |
| 152 | | |
| 2,751 | | |
| 2,256 | | |
| 578 | |
Designated
disclosure with respect to the Company's projected cash flows
In
accordance with the "hybrid model disclosure requirements" promulgated by the Israeli Securities Authority that are
applicable to Internet Gold - Golden Lines Ltd. (the "Company"), the following is a report of the Company’s projected
cash flows (the "report") and a disclosure of the examination by the Company’s board of directors of the Company’s
liquidity in accordance with regulations 10(b)(1)(d) and 10(b)(14) of the Securities Regulations (Immediate and Periodic Notices)
5730-1970:
| ● | The
Company’s un-reviewed financial statements as of and for the quarter and full year
ended December 31, 2015, reflect that the Company had an equity deficit of NIS 93 million
as of such date. |
| | |
| ● | The
Company’s board of directors reviewed the Company’s outstanding debt obligations,
its existing and anticipated cash resources and needs that were included in the framework
of the projected cash flow report for the period from January 1, 2016 until December
31, 2016 and for the period from January 1, 2017 until December 31, 2017 described below.
The board of directors also examined the assumptions and projections that were included
in the report and determined that such assumptions and projections are reasonable and
appropriate. |
| | |
| ● | Based
on the foregoing, the Company’s board of directors determined that the Company
does not have a liquidity problem and that for the duration of the period covered by
the projected cash flows report there is no reasonable doubt that the Company will not
meet its existing and anticipated liabilities when due. |
The
following is the projected cash flow of the Company and the assumptions upon which it is based:
| |
For the period from January 1, 2016 until December 31, 2016 | |
For the period from January 1, 2017 until December 31, 2017 |
| |
NIS millions | |
NIS millions |
Opening balance: | |
| |
|
Cash and cash equivalents (1) | |
| 38 | | |
| 20 | |
| |
| | | |
| | |
Independent sources: | |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | |
Proceeds from the sale of subsidiary shares (2) | |
| 56 | | |
| — | |
Proceeds from the sale of marketable securities (3)(4) | |
| — | | |
| 83 | |
Cash provided by investing activities | |
| 56 | | |
| 83 | |
| |
| | | |
| | |
Sources from Subsidiary: | |
| | | |
| | |
Dividends from subsidiary (5) | |
| 162 | | |
| 97 | |
| |
| | | |
| | |
Projected uses: | |
| | | |
| | |
Investments in marketable securities (3)(4) | |
| (50 | ) | |
| — | |
| |
| | | |
| | |
Cash flows used in operating activities (6) | |
| (4 | ) | |
| (4 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Repayments of debentures (7) | |
| (130 | ) | |
| (130 | ) |
Interest payments (7) | |
| (52 | ) | |
| (46 | ) |
Cash used in financing activities | |
| (182 | ) | |
| (176 | ) |
| |
| | | |
| | |
Closing balance: | |
| | | |
| | |
Cash and cash equivalents (1) | |
| 20 | | |
| 20 | |
| |
| | | |
| | |
Assumptions
and explanations pertaining to the above table:
(1) | Cash
flows include the Company’s projected cash flows and do not include the consolidation
of projected cash flows from the Company’s subsidiary, B Communications Ltd. (“B
Communications”) or from its controlled subsidiary, Bezeq - The Israel Telecommunications
Corp. Ltd. (“Bezeq”). |
| |
(2) | On
January 14, 2016, the Company sold 575,000 ordinary shares of B Communications, representing
approximately 1.92% of its issued and outstanding shares. The total proceeds from the
sale amounted to approximately NIS 56 million. As a result of the sale, the Company currently
holds approximately 65% of the outstanding shares of B Communications. |
| |
(3) | In
addition to the cash balances it maintains, the Company also invests in low-risk, high
liquidity marketable securities that are used to finance its operations. The Company’s
investment policy was reviewed by the Company’s audit committee and by a credit
rating agency. |
At
least 80% of the Company's portfolio is invested in securities rated at a local rating of AA- and higher. As of January 1, 2016,
the Company’s investments in marketable securities totaled NIS 239 million and by December 31, 2017 this balance is expected
to be NIS 217 million.
As
of December 31, 2015, cash and cash equivalents and current investments in marketable securities totaled NIS 277 million. These
liquidity balances can be converted to cash in a short period of time and are a source for debt service.
(4) | For
the purposes of calculating cash flows from investments in marketable securities, the
Company assumed an annual yield of 2% on the average balance of its investments in marketable
securities during the period. This assumption is based on the Company's conservative
investment policy, as well as on yields historically achieved by the Company from its
investments in marketable securities and on management’s assessment of the probability
of achieving such yield during the period. |
| |
| The following are the benchmarks used by the Company and
a sensitivity analysis of the above assessments: |
| A. | In
2015 and in 2014 the Company generated yields of 0.5% and 2.4%, respectively, on its
cash and marketable securities portfolio. The Company does not anticipate that there
will be any material changes to its investment policy in the projected periods. |
| | |
| B. | The
following table shows the expected profit in NIS millions from investments in cash and
marketable securities in the projected periods under a scenario of a 5% annual yield
and a scenario of a -2% annual yield: |
|
Annual yield | |
| | |
| |
|
Period | |
| 5% | | |
| -2% | |
|
1 – annual profit (loss) | |
| 14 | | |
| (6
| ) |
|
| |
| | | |
| | |
|
2 – annual profit (loss) | |
| 13 | | |
| (5 | ) |
(5) | Assumption
of receipt of a dividend from B Communications during the period is based on the following: |
According
to what it believes to be a conservative estimate, the Company’s management anticipates that B Communications will distribute
accumulated dividends of at least NIS 400 million by December 31, 2017. This assumption is based on market forecasts of the estimated
net profits of Bezeq and on the Company's estimation of B Communications’ anticipated distributable profits/surplus.
These
estimates are derived, among other things, from B Communications' projected financing expenses and its projected purchase price
allocation amortization expenses with respect to its acquisition of the controlling interest in Bezeq ("Bezeq PPA")
that are non-cash expenses. Future Bezeq PPA amortization expenses are expected to decrease significantly from one year to the
next because of the accelerated depreciation method that was adopted by B Communications at the time of its acquisition of the
controlling interest in Bezeq. From April 14, 2010, the date of B Communications' acquisition of its interest in Bezeq, until
December 31, 2015, B Communications has amortized approximately 72% of the total Bezeq PPA.
The
dividend assumptions, as mentioned above are immaterially dissimilar with respect to the Company's previous report, as a result
of internal timing classification between the projected periods.
B
Communications does not have a dividend distribution policy. Nevertheless, the Company assumes that there is a high probability
that B Communications will distribute most of its retained earnings balance as a dividend, based, among other things, on B Communications’
(i) dividend distributions in December 2013, June 2015, September 2015 and December 2015. The Company believes that the probability
of future dividend distributions by B Communications has improved and is supported by the unrestricted cash mechanism provision
in its Senior Secured Notes that were issued in February 2014 that allows the use of funds that are not pledged to the holders
of the Senior Secured Notes.
Accordingly,
the Company’s management believes that B Communications will act in the same manner as it did in November 2013 and May,
August and November 2015, and that it will distribute most of its distributable profits/surplus, so long as B Communications will
have sufficient resources to service its debt for a period of at least 18 months and that the distribution meets the criteria
for distributions under Israeli law. This assumption does not contradict the restrictions on distributing dividends under applicable
law and other restrictions applicable to B Communications.
(6) | The
cash flows from the Company’s current operations include the administrative operating
costs and costs associated with the Company being a dual-listed company traded on the
NASDAQ Global Select Market and on the Tel Aviv Stock Exchange. |
| |
(7) | The
repayment of principal and interest are based on the repayment schedule for the Company’s
outstanding debentures and an assumed 1% annual increase in the Consumer Price Index
in 2016 and in 2017. |
The
Company has additional cash generating abilities that for conservative reasons were not taken in to account in preparing the projected
cash flow detailed above. The following describes the Company's assumptions regarding these scenarios:
A. | All
of the Company's shares in B Communications are free and clear of any encumbrance. If
necessary, the Company can sell some of these shares, and will still remain the controlling
shareholder of B Communications. Examples of this ability to sell shares of B Communications
are the transaction carried out in 2013 when shares were sold to Norisha Holdings Ltd.
and the sale of 575,000 shares in private transactions with institutional investors in
January 2016. |
| |
B. | The
Company has financial flexibility and quick access to capital markets that enable it
to raise funds within a short period of time. This is evident from the debenture issuances
and debenture series exchanges that the Company completed in recent years. |
The
Company’s board of directors has reviewed the Company’s liabilities, its existing and anticipated cash resources and
needs that were included in the framework of the projected cash flow report, examined their scope and feasibility, as well as
the timing of their receipt, and found that all such assumptions and the projections were reasonable and appropriate.
The
Company’s board of directors examined the Company’s anticipated resources and liabilities, and considering the financial
data in the above cash flow report and management’s explanations of such data determined that the Company does not have
a liquidity problem and that for the duration of the projected period for which cash flow information has been provided there
is no reasonable doubt that the Company will not meet its existing and anticipated liabilities when due.
The
information detailed above, concerning the Company’s cash flow forecast, and particularly concerning the projected dividend
and yield on securities, are forward looking information as defined in the Securities Law, 5728-1968. This information includes
forecasts, subjective assessments, estimates, etc. and is based, among other things, on objective market forecasts and reviews
issued to the public, and relies, among other things, on the company management’s past experience. Furthermore, some of
such information is based on future data and internal estimates by the Company’s management made at the current time, and
there is no certainty that they will materialize, in whole or in part, due to factors that are not in the Company’s control.
It is hereby clarified that there is a likelihood that said forward looking information will not be realized, in whole or in part,
both with respect to the Company’s forecasts and with respect to the working assumptions on which they are based.
16
Internet Gold Golden Lines (CE) (USOTC:IGLDF)
Historical Stock Chart
From Mar 2024 to Apr 2024
Internet Gold Golden Lines (CE) (USOTC:IGLDF)
Historical Stock Chart
From Apr 2023 to Apr 2024