Altice SA: Altice / HOT Group Fourth quarter and full-year 2012 results
(Thomson Reuters ONE) -
Triple play customer penetration has increased to 34%
UMTS business successfully launched in May 2012 has generated 441,000
subscribers
Unique nationwide Fixed and Mobile infrastructure in place
Luxembourg, Luxembourg - March 27, 2013: Altice Finco S.A. ("Altice" or the
"Company"), today announced the financial and operating results for the year
ended December 31, 2012 and three months ended December 31, 2012 ("Q4 2012")
for the Company and HOT Telecommunications Systems Ltd and its subsidiaries (the
"HOT Group"). References to the "Altice Finco Group" in this press release are
to Altice Finco S.A. and its subsidiary, Altice Financing S.A. and references to
the "Restricted Group" are to the Altice Finco Group and Cool Holding Ltd. and
its subsidiaries (including the HOT Group).
* Highlights for the year ended December 31, 2012, include:
* Total revenue of NIS 4,192 million and EBITDA of NIS 1,477 million
* Mobile RGUs increased to 766,000 including 441,000 UMTS RGUs
* Total Cable RGUs increased by 2.1% to 2.34 million in 2012
* Triple play cable customers relationships reached 34% of our total cable
customer relationships in 2012 compared to 28% in 2011
* Cable revenue of NIS 3,361 million and Cable EBITDA of NIS 1,467 million,
reflecting growth of 1.6% and 5.7% respectively
* Completed the take-private of the HOT Group on December 27, 2012
Altice CEO Dexter Goei stated, "2012 was a transformational year for our company
and we finished on a high note, with the take private of the HOT Group closing
on December 27th. We have transformed the business into a fully fixed and mobile
infrastructure provider with national reach and scale. The cable business is
improving its margins and has demonstrated continued EBITDA growth for the last
3 years. We also continue to increase the number of triple play customers,
currently comprising 34% our total cable customer relationships. Since the
launch in May 2012 of our UMTS services we have added over 441,000 UMTS RGUs and
our UMTS network covers 41% of the inhabited territory of Israel."
Altice CFO, Dennis Okhuijsen added, "We are also pleased to announce the buy
back of two minority stakes of 40% of APAX France in our Belgium/Luxembourg
("Coditel Holding S.A.") and Portuguese ("Cabovisao") cable businesses. Although
these business are not part of the Restricted Group today, we are expecting to
contribute these businesses and refinance the existing capital structures post
summer subject to the 3x secured and 4x total leverage tests under the
indentures governing the Senior Secured Notes and Senior Notes issued by the
Altice Finco Group."
HOT Group Financial Key figures
(NIS in millions) 2012 2011 2012 vs Pro-forma 2012 vs Pro
2011 2011 (6) forma 2011
Revenue (*) 4,192 3,374 24% 4,203 0%
Of which : Cable (1) 3,361 3,309 1.6% 3,319 1.3%
Mobile 855 66 1195% 899 (5%)
Operating income (*) 397 640 (38%) 633 (37%)
Of which : Cable (1) 601 647 (7%) 657 (8%)
Mobile (202) (7) 2786% (24) 741%
Net income 78 341 (77%) 285 (73%)
EBITDA (*) (2) 1,477 1,401 5.4% 1,616 (8.7%)
Of which : Cable (1) 1,467 1,388 5.7% 1,398 4.9%
Mobile 12 13 (8%) 218 (94%)
EBITDA Margin % 35% 42% (7%) 38% (3%)
Operating Cash Flow 930 1,240 (25%) - -
Of which : Cable (1) 947 1,220 (22%)
Mobile (17) 20 (185%)
Capital Expenditure (*) (3) 1,384 619 124% - -
Of which : Cable (1) 971 580 67%
Mobile 415 39 964%
Free Cash Flow (*) (4) (190) 732 (126%) - -
Of which : Cable (1) 116 750 (84%)
Mobile (308) (18) (1611%)
(NIS in millions) Q4 2012 Q3 2012 Q4 vs Q3
2012
Revenue (*) 1,066 1,067 0%
Of which : Cable (1) 839 839 0%
Mobile 236 237 0%
Operating income (*) 75 87 (14%)
Of which : Cable (1) 148 171 (13%)
Mobile (74) (83) (11%)
Net income 13 2 550%
EBITDA (*) (2) 352 352 0%
Of which : Cable (1) 372 369 0.8%
Mobile (20) (18) 11%
EBITDA Revenue % 33% 33% 0%
Operating Cash Flow 182 240 (24%)
Of which : Cable (1) 178 238 (25%)
Mobile 4 2 100%
Capital Expenditure (*) (3) 297 211 41%
Of which : Cable (1) 210 140 50%
Mobile 87 71 23%
Free Cash Flow (*) (4) (190) 68 (379%)
Of which : Cable (1) (85) 108 (179%)
Mobile (105) (40) (162%)
HOT Group Operational Key figures
in thousands 2012 2011 2012 vs
2011
Cable Customers 1,198 1,245 (3.8%)
ARPU (in NIS) (5) 220 211 4.3%
Triple Customers 413 348 19%
% Triple Customers 34% 28% 6%
Broadcasts Subscribers 896 891 0.6%
Broadband Internet subscribers 771 768 0.4%
Telephony lines 676 635 6.5%
Mobile UMTS Subscribers 441 - -
Mobile I-Den Subscribers 325 444 (27%)
in thousands Q4 2012 Q3 Q4 vs Q3
2012 2012
Cable Customers 1,198 1,207 (0.8%)
ARPU (in NIS) (5) 223 220 1.4%
Triple Customers 413 401 3.0%
% Triple Customers 34% 33% 1%
Broadcasts Subscribers 896 893 0.3%
Broadband Internet subscribers 771 768 0.4%
Telephony lines 676 672 0.6%
Mobile UMTS Subscribers 441 316 40%
Mobile iDen Subscribers 325 371 (12%)
Segment information (revenue, operating profit, EBITDA, capital expenditures and
Free Cash Flow) are presented before elimination of intercompany transactions
1. Cable segment includes the Cable television, Telecom and ISP segments
2. EBITDA represents profit before net financing income, taxes on income,
depreciation and amortization, and before expenses in respect of options and
before expenses (income) derived from updates in actuary assumptions and
other expenses (income), net and network set up expenses. EBITDA is an
additional measure used by management to demonstrate our underlying
performance and should not replace the measures in accordance with IFRS as
an indicator of our performance, but rather should be used in conjunction
with the most directly comparable IFRS measure. Reconciliation of EBITDA to
operating income is provided on page 18 of this press release.
3. Capital expenditures is a measure of the amount of capital expenditures
accrued during the period and is not a measure of the cash used for capital
expenditures during the period. The difference between accrued capital
expenditures in the period and the cash used for capital expenditures during
the period is a result of delayed payment obligations in relation to our
capital expenditures. For the years ended December 31, 2011 and 2012 we had
cash used for capital expenditures of NIS 508 million and NIS 1,122 million
respectively. We also had cash used to capitalize commissions which were
reflected in our operating cash flow of NIS 26 million and NIS 104 million
for the years ended December 31, 2011 and 2012, respectively. We had total
cash used for capital expenditures for the years ended December 31, 2011 and
2012 of NIS 534 million and NIS 1,226 million respectively.
4. Free cash Flow is defined as net cash provided by the operating activities
less purchases of property and equipment and purchase of intangibles, each
as reported in the HOT Group's consolidated statement of cash flows. Free
cash flow is an additional measure used by the management to demonstrate our
ability to service debt and performance, but rather should be used in
conjunction with the most directly comparable IFRS measure.
5. ARPU is an average monthly measure that we use to evaluate how effectively
we are realizing revenues from subscribers. ARPU is calculated by dividing
the revenue (for the service provided, in each case including the
proportional allocation of the bundling discount, and after certain
deductions) for the respective period by the average number of RGUs for that
period and further by the number of months in the period. The average number
of RGUs is calculated as the number of RGUs on the first day in the
respective period plus the number of RGUs on the last day of the respective
period, divided by two.
6. Pro forma for the acquisition of HOT Mobile, which was completed on November
28,2011
1. Review of HOT Group operational Key figures
(NIS in millions) For the year ending December 31
2012 vs 2011 2012 vs
2012 2011 2011 Proforma Pro-forma
2011
Total revenues 4,192 3,374 24% 4,203 0%
Of which : Cable (1) 3,361 3,309 2% 3,319 1%
Mobile 855 66 1195% 899 (5%)
Intercompany (24) (1) - (15) -
Total operating income 397 640 (38%) 633 (37%)
Of which : Cable (1) 601 647 (7%) 657 (8%)
Mobile (202) (7) 2786% (24) 741%
Intercompany (2) - - - -
Total EBITDA 1,477 1,401 5% 1,616 (9%)
Of which : Cable (1) 1,467 1,388 6% 1,398 5%
Mobile 12 13 (8%) 218 (94%)
Intercompany (2) - - - -
1. Cable segment include the Cable television, Telecom segment and ISP
services
1.1. Cable
In the Cable segment, revenues in the year ended December 31, 2012 increased by
1% to NIS 3,361 million compared to NIS 3,319 million on a pro forma basis for
the year ended December 31, 2011. This was mainly due to a 2% increase in the
number of RGUs to 2,343,000 in 2012 and a 4% increase in the Cable-based
services ARPU to 220 NIS in 2012 from 211 NIS in 2011.
Operating income generated by the Cable segment during the year ended December
31, 2012 amounted to NIS 601 million as compared to NIS 657 million on a pro-
forma basis in the comparative period last year, a decrease of 8% mainly as a
result of:
* an increase in depreciation and amortization expenses, resulting from a
change in the estimated average life of customers,
* a decrease in operating, marketing and administrative expenses,
* a decrease in other income, where 2011 included a reversal of provision for
legal claims in an amount of NIS 110 million, whereas 2012 included income
in respect of share-based compensation that expired or were cancelled in an
amount of NIS 22 million.
Cable segment EBITDA for the year ended December 31, 2012 increased by 5% to
1,467 million, compared to NIS 1,398 million for 2011 on a pro forma basis.
Excluding the effects from the non-recurring reversal of provision for legal
claims in 2011 and non-recurring income in respect of share-based compensation
that expired or were cancelled in 2012, Cable segment EBITDA increased by 12%.
1.2. Mobile
Revenue generated by our Mobile segment through our subsidiary, HOT Mobile,
decreased slightly to NIS 855 million for the year ended December 31, 2012 from
NIS 899 million on a pro forma basis for the year ended December 31, 2011. While
the revenue provided from the sale of cellular handsets remained broadly stable
at NIS 172 million in 2012 compared to NIS 177 million on a pro forma basis in
2011, the cellular services revenue, mainly including subscriptions and
interconnection fees received from incoming traffic, decreased to 683 million
for 2012 compared to NIS 722 million on a pro-forma basis in 2011. This revenue
decrease is mainly due to the churn of iDEN customers as a result of decreased
marketing and the termination in the third quarter of 2012 of our contract with
the Israeli Defense Force, partially offset by an increase in total cellular
RGUs as a result of new subscribers to our UMTS-based network which launched in
May 2012.
The HOT Group commenced operating its own UMTS network with the 053 prefix in
May 2012. Since then (and until December 31, 2012) HOT Mobile has gained
approximately 441,000 UMTS residential subscribers, or approximately 8% market
share of the cellular market share in Israel. The numbers of iDEN subscribers
was approximately 325,000 as of December 31, 2012, compared to approximately
444,000 as of December 31, 2011. The decline was primarily due to the
termination of a contract with the Israel Defense Force as described above, the
natural erosion of legacy activity reflecting a declining iDEN technology and
the transfer of subscribers to our new UMTS services.
Review of HOT Group's Key Financial Data
This section provides a brief analysis of our results of operations for the year
ended December 31, 2012 and 2011. The operating results of HOT Mobile are not
included in our historical consolidated financial statements prior to November
28, 2011. In order to provide meaningful comparisons, for the purposes of this
section our results of operations for the year ended December 31, 2011 are based
on pro forma statements of operations and statistical data that give effect to
the acquisition of HOT Mobile as if such transaction had been completed on
January 1, 2011.
(NIS in millions) For the year ending December 31
2012 vs 2011 2012 vs
2012 2011 2011 Proforma * Pro-forma
2011
Revenues 4,192 3,374 24% 4,203 0%
Depreciation and amortization 1,094 844 30% 1,050 4%
Operating expenses 2,261 1,621 39% 2,077 9%
Sales and marketing expenses 300 242 24% 326 (8%)
Administrative and general 163 130 25% 204 (20%)
Other income, net (23) (103) (78%) (87) (74%)
Operating income 397 640 (38%) 633 (37%)
Financing expenses, net 302 199 52% 244 24%
Tax expenses 17 100 (83%) 104 (84%)
Net income 78 341 (77%) 285 (73%)
* Gives effect to the acquisition of HOT Mobile as if such transaction had been
completed on January 1, 2011
1.3. 2012 versus Pro-forma 2011
1.3.1. Revenues
The HOT Group's revenues in the year ended December 31, 2012 amounted to NIS
4,192 million, compared to NIS 4,203 million on a pro forma basis in the
corresponding period last year.
In the Cable segment, revenues increased by 1% to NIS 3,361 million compared to
NIS 3,319 million on a pro-forma basis for the year ended 2011. This was mainly
due to a 2% increase in the number of RGUs to 2,343,000 in 2012 and a 4%
increase in the Cable-based services ARPU to 220 NIS in 2012 from 211 NIS in
2011.
Revenue generated by the Mobile segment decreased slightly to NIS 855 million
for the year ended December 31, 2012 from NIS 899 million on a pro-forma basis
for the year ended December 31, 2011. While the revenue provided from the sale
of cellular handsets remained broadly stable, the cellular services revenue
decreased to 683 million for 2012 compared to NIS 722 million on a pro-forma
basis in 2011. This revenue decrease is mainly due to the churn of iDEN
customers as a result of decreased marketing and the termination in the third
quarter of 2012 of our contract with the Israeli Defense Force, partially offset
by an increase in total cellular RGUs as a result of new subscribers to our
UMTS-based network which launched in May 2012.
The HOT Group commenced operating its own UMTS network with the 053 prefix in
May 2012. Since then (and until December 31, 2012) HOT Mobile has gained
approximately 441,000 UMTS residential subscribers, or approximately 8% market
share of the cellular market share in Israel. The numbers of iDEN subscribers
was approximately 325,000 as of December 31, 2012, compared to approximately
444,000 as of December 31, 2011. The decline was primarily due to the
termination of a contract with the Israel Defense Force as described above, the
natural erosion of legacy activity reflecting a declining iDEN technology and
the transfer of subscribers to our new UMTS services.
1.3.2. Total Expenses
The HOT Group's operating expenses in the year ended December 31, 2012 amounted
to NIS 2,261 million, compared to NIS 2,077 million on a pro forma basis in the
corresponding period last year, an increase of approximately 9%. The increase
was primarily due to:
* the launch of the UMTS services, including NIS 27 million of additional cost
of cellular handsets sold as well as additional interconnect fees (related
to our national roaming costs) for NIS 142 million;
* additional subscribers, infrastructure and network maintenance expenses of
NIS 68 million; and
* a decrease in salaries and social benefits in an amount of NIS 53 million,
reflecting certain ongoing changes in processes and organization of the HOT
Group.
Sales and marketing expenses in the year ended December 31, 2012 amounted to NIS
300 million, compared to NIS 326 million on a pro forma basis in the
corresponding period last year, a decrease of 8%. The decrease was primarily due
to lower sales commissions (NIS 26 million) and reduced advertising and sales
promotion expenses (NIS 21 million), partially offset by a NIS 24 million
increase in salaries and social benefits of sales personnel, resulting from the
cessation of the capitalization of sales commissions due to a regulatory change
pursuant to which telecom operators are no longer able to charge early
termination fees to subscribers.
The HOT Group's administrative and general expenses in the year ended December
31, 2012 amounted to NIS 163 million, compared to NIS 204 million on a pro forma
basis in the corresponding period last year, a decrease of approximately 20%
attributable to lower salaries and social benefits.
The HOT Group's depreciation and amortization expenses in the year ended
December 31, 2012 amounted to NIS 1,094 million, compared to NIS 1,050 million
on a pro forma basis in the corresponding period last year, an increase of 4%.
This was a result of increases in depreciation of hardware and commissions
related to our cable based services and depreciation of our iDEN network and was
offset by a decrease in depreciation of our cellular handsets.
The HOT Group's other expenses (income), net, and network set up expenses
amounted to an income of NIS 23 million in the year ended December 31, 2012,
compared to pro-forma income of NIS 87 million in the corresponding period last
year. The other income in 2011 included income recognized as a result of
updating of the provision for legal claims in an amount of NIS 110 million,
whereas in 2012 other income included income in respect of share-based payment
that expired or were cancelled in an amount of NIS 22 million.
1.3.3. Net income
The HOT Group's net financing expenses in the year ended December 31, 2012
amounted to NIS 302 million, compared to financing expenses of NIS 244 million
on a pro forma basis in the corresponding period last year, an increase of 24%.
This increase was primarily due to a negative NIS 27 million mark-to-market
effect in the fair value of financial derivatives (resulting from an income of
NIS 6 million in the year ended December 31, 2012 as compared to an income of
NIS 33 million in the corresponding period last year), and additional interest
expenses of NIS 18 million relating to the bonds listed on the Tel Aviv stock
exchange (reflecting the full year interest impact of unsecured bonds issued in
March 2011).
The HOT Group's tax expenses in the year ended December 31, 2012 amounted to NIS
17 million, compared to pro-forma tax expenses of NIS 104 million in the
corresponding period last year. The decrease in income tax expense was primarily
due to a decrease in net income as discussed below.
The HOT Group's net income for the year ended December 31, 2012 was NIS 78
million, compared to NIS 285 million on a pro forma basis in the corresponding
period last year, a decrease of 73%. The decrease in the net income primarily
reflects a decrease in operating income of the Mobile segment due to the launch
of our UMTS services in May 2012.
1.3.4. EBITDA
The HOT Group's EBITDA for the year ended December 31, 2012 amounted to NIS
1,477 million (35% of revenues), compared to NIS 1,616 million (38% of revenues)
on a pro forma basis in the corresponding period last year, a decrease of 9%.
The decrease primarily reflects a decrease of operating income in the Mobile
segment due to the launch of our UMTS services in May 2012.
Cable segment EBITDA for the year ended December 31, 2012 increased by 5% to
1,467 million, compared to NIS 1,398 million for 2011 on a pro-forma basis.
Excluding the effects from the non-recurring reversal of provision for legal
claims in 2011 and non-recurring income in respect of share based compensation
that expired or were cancelled in 2012, Cable segment EBITDA increased by 12%.
1.4. HOT Group Quarterly review
(NIS in millions)
Q4 2012 Q3 2012 Q4 vs Q3
Revenues 1,066 1,067 -
Depreciation and amortization 302 283 7%
Operating expenses 610 601 1%
Sales and marketing expenses 62 75 (17%)
Administrative and general 40 42 (5%)
Other income, net (23) (21) 9%
Operating income 75 87 (14%)
Financing expenses, net 90 77 17%
Tax expenses (28) 8 (450%)
Net income 13 2 550%
The HOT Group's net income for the three months ended December 31, 2012 amounted
to NIS 13 million, as compared to a net income of NIS 2 million for the three
months ended September 30, 2012, an increase of NIS 11 million.
The increase in the net income is primarily due to a decrease of NIS 13 million
in sales and marketing expenses (primarily as the result of a decrease in
salaries and social benefits expenses) and a decrease of NIS 13 million in
financing expense. These decreases were partially offset by an increase of NIS
19 million in depreciation and amortization expenses, primarily reflecting the
impact of a change in the estimated period in which customers remain with us,
and by an increase of NIS 9 million in operating expenses, primarily as a result
of an increase in interconnect fees.
1.5. HOT Group Cashflow
(NIS in millions) For the year ending December
31
2012 2011
Cash and cash equivalents at beginning of period 16 1
Net cash provided by current operations 930 1,240
Net cash provided by (used in) investment (1,189) (867)
operations
Net cash provided by (used in) financing 275 (358)
operations
Cash and cash equivalents at end of period 32 16
1.5.1. Net cash generated by current operations
The net cash generated by current operations in the year ended December
31, 2012 amounted to NIS 930 million, compared to NIS 1,240 million in the
corresponding period last year. This NIS 310 million decrease was mainly due to
a decrease of NIS 263 million in net income, from a decrease of NIS 189 million
in working capital and an increase of NIS 29 million in cash paid, which were
offset by an increase of NIS 171 million in adjustments of net income required
to present cash flows from current activity. The decrease in working capital was
mainly driven by an increase in trade receivables as a result of migrating to
invoicing on a post-services basis as opposed to pre-services, which we were
required by the Council for Cable and Satellite Broadcasting to complete by the
end of 2012 and offset by an increase in trade payables as a result of
increasing the Days Payable Outstanding. HOT Mobile contributed to net cash used
in current operations of NIS 17 million during the year ended December 31, 2012
compared to net cash generated by current operations of NIS 20 million in the
year ended December 31, 2011 (for the period from November 28, 2011 to December
31, 2011).
1.5.2. Net cash provided by (used in) investment operations
The net cash used in investment operations by the HOT Group in investment
activities in the year ended December 31, 2012 amounted to NIS 1,189 million,
compared to NIS 867 million for the corresponding period last year, an increase
of NIS 322 million. The increase was primarily due to an increase in the
purchases of fixed assets and intangible assets, in an amount of NIS 614 million
(which included cash used by HOT Mobile for investment activities of NIS 358
million) and by a decrease of NIS 190 million in restricted cash. The cash
absorbed by investment activities in the corresponding period in 2011 included
the amount of NIS 480 million resulting from the acquisition of HOT Mobile.
1.5.3. Net cash provided by (used in) financing operations
The net cash provided by financing activities of the HOT Group in the year ended
December 31, 2012 amounted to NIS 275 million, compared to a net cash absorption
of NIS 358 million in the corresponding period last year, a change of NIS 633
million. The cash generated by financing activities in the period included:
* the receipt of short-term and long term loans from a related party (within
the Restricted Group), for a total amount of NIS 1,970 million (as described
in Note 20 to the consolidated financial statements of HOT as of December
31, 2012);
* the repayment of banking credit and bonds, for a net amount of NIS 1,071
million;
* the payment of a dividend in an amount of NIS 365 million in February 2012;
* the buy-back of shares in an amount of NIS 184 million, which closed in June
2012; and
* the repayment of other long-term liabilities for NIS 76 million.
The net cash absorbed by financing activities in the corresponding period last
year, in an amount of NIS 358 million, mainly included the repayment of banking
credit and bonds for a net amount of NIS 382 million and the issuance of NIS 83
million of share capital via a private issue.
1.6. HOT Group Capital expenditures
(NIS in millions) For the year ending December 31
2012 2011 2012 vs 2011 %
Modems and converters Related 344 178 93%
Cable Network related (Including Centers) 416 289 44%
Other 211 113 87%
Total Cable Capital Expenditures 971 580 67%
Infrastructures 276 32 763%
Other 139 7 1886%
Total Cellular Capital Expenditures (1) 415 39 964%
Adjustment related to intercompany (2) - -
Total Capital Expenditures 1,384 619 124%
1. Beginning from November 28, 2011, following the consolidation of HOT Mobile
Total capital expenditure in the year ended December 31, 2012 increased by 124%
compared to the year ended December 31, 2011. This increase was primarily due to
the roll out of new state-of-the-art decoders and modem and the construction of
the UMTS network, as well as a result of the expenditure incurred to complete
the upgrade to 100Mb capacity throughout our cable network and fiber roll out in
certain areas in 2012.
1.7. ALTICE / HOT Group Debt profile
As of December 31, 2012, the HOT Group had local unsecured bonds obligations for
an outstanding amount of NIS 1,451 million. As of this date, the Altice Finco
Group had Senior Notes and Senior Secured Notes outstanding in an aggregate
principal amount of EUR 210 million and USD 885 million, respectively (i.e. NIS
4,343 million cumulatively). Total cash available within the Restricted Group
was NIS 446 million as of December 31, 2012. In addition, the Altice Finco Group
benefits from a committed USD 80 million working capital facility, which was
undrawn as of December 31, 2012 and still undrawn as of the date of this press
release.
(NIS in millions) As of December 31, 2012
HOT Group Altice Combined
Unsecured bonds HOT (4) 1,451 1,451
Senior Secured Notes Altice (1) 2,755 2,755
Senior Notes Altice (2) 1,588 1,588
Total Altice Restricted Group Bonds 1,451 4,343 5,794
Total Cash 32 412 446
Net Leverage (LTM)(3) 3.62X
(1) USD 460 million and Euro 210 million at an exchange rate of NIS 1 = $0.2677
and NIS 1= ?0.2025
(2) USD 425 million at an exchange rate of NIS 1 = $0.2677
(3) Excluding network lease amounting to NIS 129 million as of December 31, 2012
(4) The amount reflected above is reduced by capitalized debt issuance costs
The Altice Finco Group has entered into certain hedging foreign exchange
transactions to effectively exchange a portion of the payment obligations for
interest and principal of such indebtedness from EUR and USD to NIS. See note
11 of the financial statements of Altice Financing S.A. for a detailed
description.
1.8. HOT Outlook
Guidance for year 2013 can be summarized as follows:
Outlook FY 2013
EBITDA growth 8-10%
EBITDA less CAPEX approx. NIS 700 mln
Mobile UMTS average Roaming expenses % approx. 50%
Cable Capital intensity to normalize
Our actual results may vary due a number of unpredictable factors. See "Forward-
Looking Statements" on page 23 of this press release.
Schedule of upcoming events
May 14, 2013 : first quarter 2013 results
Contacts
+--------------------------------+
| Investor Relations |
+--------------------------------+
| +35228371079 |
+--------------------------------+
| Dennis Okhuijsen |
| Altice Chief Financial Officer |
| IR(at)altice.net |
+--------------------------------+
HOT Group - Consolidated Income Statement
(NIS in millions) For the year ending December 31
2012 2011 2012 vs 2011 2011 Pro-forma 2012 vs Pro-
forma 2011
Revenues 4,192 3,374 24% 4,203 0%
Cost of revenues
Depreciation and 1,094 844 30% 1,050 4%
amortization
Operating expenses 2,261 1,621 39% 2,077 9%
Total cost of revenues 3,355 2,465 36% 3,127 7%
Gross profit 837 909 (8%) 1076 (22%)
Administrative and 163 130 25% 204 (20%)
general expenses
Sales and marketing 300 242 24% 326 (8%)
expenses
Other (income) (23) (103) (78%) (87) (74%)
expenses, net
Operating income 397 640 (38%) 633 (37%)
Financing income 18 31 (26%) 43 (47%)
Financing expenses (320) (230) 41% (287) 13%
Income before taxes on 95 441 (78%) 389 (76%)
income
Taxes on income (tax 17 100 (83%) 104 (84%)
benefit)
Net income 78 341 (77%) 285 (73%)
HOT Group - Consolidated balance sheet
As of December 31
Assets (NIS million) 2012 2011
Cash and cash equivalents 32 16
Restricted cash 69 -
Trade receivables 549 361
Other receivables 62 79
Inventory 27 24
Current assets 739 480
Long-term trade receivables 82 85
Other long term receivables 115 103
Investment in available for sale financial asset 28 42
Fixed assets, net 4,136 3,763
Intangible assets, net 753 837
Goodwill 1,264 1,264
Deferred taxes 61 71
Non-Current assets 6,439 6,165
TOTAL Assets 7,178 6,645
HOT Group - Consolidated balance sheet
As of December
31
Equity and Liabilities (NIS million) 2012 2011
Credit from financial institutions and current maturities of 125 436
bonds
Trade payables 1,062 814
Other payables 412 310
Short term loan from a related party 70 -
Provision for legal claims 68 168
Current Liabilities 1,737 1,728
Loans from financial institutions and bonds 1,326 2,064
Loans from a related party 1,900 -
Other long-term liabilities 374 555
Advances received for terminal equipment installation 52 42
Employee benefit liabilities, net 32 23
Deferred taxes 312 302
Non-Current Liabilities 3,996 2,986
Equity 1,445 1,931
TOTAL Equity and Liabilities 7,178 6,645
HOT Group - Consolidated statement of cash flow
For the Year Ending December
31
Millions of NIS 2012 2011
+------------------------------------------------+-----+-----------------------+
|Cash Flow from Current Activities | | |
| | | |
|Net income | 78 | 341 |
| | | |
|Adjustments required to present cash flows from| | |
|current activities : | | |
| | | |
|Depreciation and amortization |1,094| 844 |
| | | |
|Gain on disposal of fixed assets | (1) | - |
| | | |
|Taxes on income, net | 17 | 100 |
| | | |
|Change in employee benefit liabilities, net | 9 | 5 |
| | | |
|Linkage differentials on bonds | 31 | 15 |
| | | |
|Revaluation of other long term liabilities | 4 | 19 |
| | | |
|Cost of share based payment | (5) | 22 |
| | | |
|Financing and other expenses, net | 137 | 110 |
| +-----+-----------------------+
| |1,286 1,115 |
| | |
|Change in asset and liability items | |
| | |
|Increase in trade receivables |(188) (2) |
| | |
|Increase in other receivable and long-term| |
|receivables |(17) (33) |
| | |
|Increase in subscription acquisition costs | - (26) |
| | |
|Prepaid expenses paid to marketers |(104) - |
| | |
|Decrease (increase) in inventories | (3) 1 |
| | |
|Decrease (increase) in non-current trade| |
|receivable | 3 (6) |
| | |
|Increase in trade liabilities | 144 43 |
| | |
|Increase (decrease) in other payables |(28) - |
| | |
|Increase (decrease) in provision for legal| |
|claims |(100) (105) |
| | |
|Increase(decrease) in other long term| |
|liabilities |(30) 2 |
| | |
|Increase (decrease) in income in advance from| |
|the installation of terminal equipment, net | 13 5 |
| +-----+-----------------------+
| |(310)| (121) |
| | | |
|Cash paid and received over the course of the| | |
|year for : |(124)| (95) |
| | | |
|Net cash from current operations | 930 | 1,240 |
+------------------------------------------------+-----+-----------------------+
HOT Group - Consolidated statement of cash flow
For the Year Ending December
31
Millions of NIS 2012 2011
+------------------------------------------------+-------+---------------------+
|Net cash from current operations | 930 | 1,240 |
| | | |
| | | |
| | | |
|Cash Flow from Investment Activities | | |
| | | |
| | | |
| | | |
|Purchase of newly consolidated subsidiary | - | (480) |
| | | |
|Acquisition of fixed assets and intangible |(1,122)| (508) |
|assets | | |
| | | |
|Proceeds from the disposal of fixed assets | 2 | - |
| | | |
|Repayment (investment) in restricted cash, net | (69) | 121 |
| | | |
| | | |
| | | |
|Net cash used in investment activities |(1,189)| (867) |
| | | |
| | | |
| | | |
|Cash Flow from Financing Activities | | |
| | | |
| | | |
| | | |
|Short-term credit from financial institutions, | (295) | (225) |
|net | | |
| | | |
|Receipt of long-term loans from financial | 1,050 | 2,181 |
|institutions, net of re-organization commissions| | |
|and the issuance of bonds | | |
| | | |
|Receipt of loan from a related party | 1,900 | - |
| | | |
|Receipt of short-term loan from a related party | 70 | - |
| | | |
|Receipt of long-term loans from financial |(1,826)| (2,338) |
|institutions | | |
| | | |
|Increase in other long-term liabilities | - | - |
| | | |
|Repayment of other long-term liabilities | (76) | (59) |
| | | |
|Issuance of share capital | 1 | 83 |
| | | |
|Dividend for shareholders in the Company | (365) | - |
| | | |
|Purchase of treasury shares | (184) | - |
| | | |
| | | |
| | | |
|Net cash used in financing Activities | 275 | (358) |
| | | |
| | | |
| | | |
|Increase (decrease) in cash and cash equivalents| 16 | 15 |
| | | |
|Balance of cash and cash equivalents at the | 16 | 1 |
|beginning of the year | | |
| | | |
|Balance of cash and cash equivalents at the end | 32 | 16 |
|of the year | | |
| | | |
| | | |
+------------------------------------------------+-------+---------------------+
HOT Group Reconciliation of operating income to EBITDA
(NIS in millions) For the year ending
December 31
2012 2011 2011 Pro-forma
Operating income 397 640 633
Depreciation and amortization 1,094 844 1,050
Other income, net (23) (103) (87)
Actuarial gain/loss from change in actuarial - 2 2
assumptions
Options (capital and phantom) 9 18 18
EBITDA (1) 1,477 1,401 1,616
1. EBITDA represents profit before net financing income, taxes on income,
depreciation and amortization, and before expenses in respect of options and
before expenses (income) derived from updates in actuary assumptions and
other expenses (income), net and network set up expenses. EBITDA is an
additional measure used by management to demonstrate our underlying
performance and should not replace the measures in accordance with IFRS as
an indicator of our performance, but should rather be used in conjunction
with the most directly comparable IFRS measure.
HOT Group Summary Statistical and Operating Data
in thousands except percentages and as As of and for the year ended
otherwise indicated December 31
2012 2011 2010
Total Israeli Homes 2,243 2,204 2,166
Customer Relationships
Cable Customer Relationships (1) 1,198 1,245 1,282
Cable Revenue Generating Units
(RGUs)((2))
Digital Television RGUs 878 840 783
Analog Television RGUs 18 51 108
Total Television RGUs 896 891 891
Broadband Internet Infrastructure Access 771 768 752
RGU
Fixed-Line Telephony RGUs 676 635 610
Total Cable RGUs 2,343 2,294 2,253
RGUs per Cable Customer Relationship (in 1.96x 1.84x 1.76x
units)
Mobile Revenue Generating Units
(RGUs)((3))
UMTS RGUs 441 - -
iDEN RGUs 325 444 490
Total Mobile RGUs 766 444 490
Cable Services Penetration
Television RGUs as % of Total Israeli 40% 40% 41%
Homes
Broadband Internet Infrastructure Access 34% 35% 35%
RGUs as % of Total Israeli Homes
Fixed-Line Telephony RGUs as % of Total 30% 29% 28%
Israeli Homes
Cable Customer Bundling((4))
Single-Play Customer Relationships as % 47% 52% 56%
of Cable Customer Relationships
Double-Play Customer Relationships as % 19% 20% 20%
of Cable Customer Relationships
Triple-Play Customer Relationships as % 34% 28% 24%
of Cable Customer Relationships
in thousands except percentages and as As of and for the year ended
otherwise indicated December 31
2012 2011 2010
Churn((5))
Churn in Pay Television RGUs 15.3% 13.2% 15.4%
ARPU((6))
Cable-based services ARPU (in NIS) 220 211 202
Market Share
Mobile Market Share((7)) 8% 4% -
(1) Cable Customer Relationships represents the number of individual end users
who have subscribed for one or more of our cable-based services (including pay
television, broadband Internet infrastructure access or fixed-line telephony),
without regard to how many services to which the end user subscribed. It is
calculated on a unique premises basis. Cable Customer Relationships does not
include subscribers to either our cellular or ISP services.
(2) RGUs relate to sources of revenue, which may not always be the same as
customer relationships. For example, one person may subscribe for two different
services, thereby accounting for only one subscriber, but two RGUs. RGUs for pay
television and broadband Internet infrastructure access are counted on a per
service basis and RGUs for fixed-line telephony are counted on a per line basis.
(3) Mobile RGUs is equal to the net number of lines or SIM cards that have
been activated on our cellular network.
(4) Cable customer bundling for our stand-alone, double-play and triple-play
services is presented as a percentage of Cable Customer Relationships. Our
double play package customers include customers who have purchased a combination
of two services out of our pay television, broadband Internet infrastructure
access and fixed-line telephony services. Our triple-play package comprises pay
television, broadband Internet infrastructure access and fixed-line telephony
services.
(5) Churn is calculated by dividing the number of RGUs for a given service
that have been disconnected during a particular period (either at the customer's
request or due to a termination of the subscription by us) by the average number
of RGUs for such service, excluding transfers between our services (other than a
transfer between our cable services and cellular services), during such period.
For example, an analog television customer who migrates to our digital
television services or a customer who migrates from our double-play to triple-
play services or vice-versa will not increase churn.
(6) ARPU is an average monthly measure that we use to evaluate how effectively
we are realizing revenues from subscribers. ARPU is calculated by dividing the
revenue (for the service provided, in each case including the proportional
allocation of the bundling discount, and after certain deductions) for the
respective period by the average number of RGUs for that period and further by
the number of months in the period. The average number of RGUs is calculated as
the number of RGUs on the first day in the respective period plus the number of
RGUs on the last day of the respective period, divided by two.
(7) Our Mobile market share is based on our estimate of the total cellular
lines in Israel, which is based on the number of lines reported by other
cellular operators in Israel. This market share calculation is not indicative of
nor does it correlate to the market share calculation required under our
cellular license. In relation to the addition of frequencies to our cellular
license enabling us to provide UMTS based 3G services, we were required to pay a
total license fee of NIS 705 million, out of which we paid NIS 10 million at the
time of receiving the license. The remaining amount equal to NIS 695 million is
payable in 2016 subject to certain deductions based on market share gained by
HOT Mobile (based on the higher of the market share as measured in September
2013 and September 2016).
NOT AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO PURCHASE SECURITIES
This press release does not constitute or form part of, and should not be
construed as, an offer or invitation to sell securities of the Altice Finco
Group or the Restricted Group or the solicitation of an offer to subscribe for
or purchase securities of the Altice Finco Group or the Restricted Group, and
nothing contained herein shall form the basis of or be relied on in connection
with any contract or commitment whatsoever. Any decision to purchase any
securities of the Altice Finco Group or the Restricted Group should be made
solely on the basis of the final terms and conditions of the securities and the
information to be contained in the offering memorandum produced in connection
with the offering of such securities. Prospective investors are required to make
their own independent investigations and appraisals of the business and
financial condition of the Altice Finco Group or the Restricted Group, and the
nature of the securities before taking any investment decision with respect to
securities of Altice Finco Group or the Restricted Group. Any such offering
memorandum may contain information different from the information contained
herein.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include, but are not limited to, all statements
other than statements of historical facts contained in this presentation,
including, without limitation, those regarding our intentions, beliefs or
current expectations concerning, among other things: our future financial
conditions and performance, results of operations and liquidity; our strategy,
plans, objectives, prospects, growth, goals and targets; and future developments
in the markets in which we participate or are seeking to participate. These
forward-looking statements can be identified by the use of forward-looking
terminology, including the terms "believe", "could", "estimate", "expect",
"forecast", "intend", "may", "plan", "project" or "will" or, in each case, their
negative, or other variations or comparable terminology. Where, in any forward-
looking statement, we express an expectation or belief as to future results or
events, such expectation or belief is expressed in good faith and believed to
have a reasonable basis, but there can be no assurance that the expectation or
belief will result or be achieved or accomplished. To the extent that statements
in this press release are not recitations of historical fact, such statements
constitute forward-looking statements, which, by definition, involve risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied by such statements.
FINANCIAL MEASURES
In this press release, we present certain non-GAAP measures, including EBITDA
and Free Cash Flow. We define "EBITDA" as p
Unternehmensinformation / Kurzprofil:
Datum: 27.03.2013 - 23:34 Uhr
Sprache: Deutsch
News-ID 243894
Anzahl Zeichen: 65592
contact information:
Town:
Luxembourg
Kategorie:
Business News
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"Altice SA: Altice / HOT Group Fourth quarter and full-year 2012 results"
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