Partner Communications (PTNR) Reports Q4 EPS of $0.01 on Revenues of $251M

Partner Communications (NASDAQ: PTNR) reported Q4 EPS of $0.01. Revenue for the quarter came in at $251 million.

Fourth quarter 2020 highlights (compared with fourth quarter 2019)

• Based on the weighted average number of shares outstanding during Q4 2020, basic earnings per share or ADS, was NIS 0.03 (US$ 0.01) compared with basic earnings per share or ADS, of NIS 0.05 in Q4 2019.
• Total Revenues: NIS 808 million (US$ 251 million), a decrease of 3%
• Service Revenues: NIS 632 million (US$ 197 million), a decrease of 1%
• Equipment Revenues: NIS 176 million (US$ 55 million), a decrease of 11%
• Total Operating Expenses (OPEX): NIS 480 million (US$ 149 million), an increase of 3%
• Adjusted EBITDA: NIS 203 million (US$ 63 million), a decrease of 6%
• Adjusted EBITDA Margin: 25% of total revenues compared with 26%
• Profit for the Period: NIS 5 million (US$ 2 million), a decrease of 29%
• Net Debt: NIS 657 million (US$ 204 million), a decrease of NIS 300 million
• Adjusted Free Cash Flow (before interest): negative NIS 3 million (US$ -1 million), a decrease of NIS 19 million
• Cellular ARPU: NIS 49 (US$ 15), a decrease of 11%
• Cellular Subscriber Base: approximately 2.84 million at quarter-end, an increase of 179 thousand since Q4 2019 and an increase of 74 thousand in the quarter
• Fiber-Optic Subscriber Base: 139 thousand subscribers at quarter-end, an increase of 63 thousand since Q4 2019 and an increase of 19 thousand in the quarter
• Homes Connected (HC) to Partner's Fiber-Optic Infrastructure: 465 thousand at quarter-end, an increase of 141 thousand since Q4 2019 and an increase of 33 thousand in the quarter
• Infrastructure-Based Internet Subscriber Base: 329 thousand subscribers at quarter-end, an increase of 61 thousand since Q4 2019 and an increase of 18 thousand in the quarter
• TV Subscriber Base: 232 thousand subscribers at quarter-end, an increase of 44 thousand since Q4 2019 and an increase of 8 thousand in the quarter

Commenting on the results for the fourth quarter and full year 2020, Mr. Isaac Benbenisti, CEO of Partner, noted:

"In summary of the year of COVID-19 and its operational complexity, Partner was able to maintain stability in revenues and to present a net profit. During the year 2020, hundreds of thousands of subscribers joined the Company's services, in cellular, internet and television. During the past year, Partner has expanded its growth engines – in cellular with the launch of the 5G network, 'Partner 5G', in internet with the further rollout of our independent fiber-optic infrastructure, 'Partner Fiber', and in TV, the fastest growing TV service in Israel, 'Partner TV', with the deepening of our cooperation with Netflix in a unique bundled offer.

In cellular, Partner's subscriber base grew by 179 thousand cellular subscribers, net, in 2020, to total approximately 2.84 million, alongside the continued increase in customer loyalty, with the lowest churn rates for over a decade.

In 2020, we made a big leap in the Group's activity in the internet sphere, with a 23% increase in the Company's infrastructure-based internet subscriber base, to total 329 thousand subscribers at year-end, the growth resulting from the joining of tens of thousands of new subscribers to services over 'Partner Fiber', the Company's independent fiber-optic infrastructure. Partner's independent fiber-optic infrastructure already reaches more than 760 thousand households as of today, of which more than 500 thousand reside in buildings already connected to the infrastructure and more than 150 thousand of which are already subscribed to internet services over Partner's fiber-optic infrastructure.

In 2020, Partner TV was again the fastest growing of all television services in Israel, with 44 thousand subscribers joining, net, during the year. As of today, 'Partner TV' is enjoyed by approximately 234 thousand subscribers, most of them also customers of the Company's internet services.

At the outset of the year 2021, Partner stands in an excellent position for growth in all areas of activity, thanks to the long-term preparations we have made in recent years, which have included both a significant reduction in debt and investment in independent communications infrastructures that enable us to increase profitability."

Mr. Tamir Amar, Partner's Chief Financial Officer & VP Fiber-Optics, commented on the results:

"The steps we've taken during the year, alongside the continued subscriber growth in the cellular and fixed-line segments lessened the impact of COVID-19 on our results. In the fourth quarter and during 2020 as a whole, the positive momentum in our growth engines continued, while accelerating the rollout of our fiber-optic infrastructure. Our success this year in the 5G frequencies tender and our compliance with the milestones in the deployment of 5G sites set by the Ministry of Communications will enable us to advance the rollout and connect more and more customers to the 5G network, and gradually expand the range of advanced services offered to Partner's growing subscriber base. In addition, the Company managed to position itself in first place, together with another operator, in bidding for a deployment grant in 5G, thus benefiting from additional financial support for the continued deployment of 5G sites, in addition to our eligibility for a significant discount on frequency fees, subject to certain tender conditions.

Our cellular subscriber base increased this year by 179 thousand. The increase included 74 thousand subscribers, net, who joined in the last quarter of the year, including 25 thousand subscribers to twelve-month data package for modems provided to students by the Ministry of Education as part of their COVID-19 crisis program. The churn rate in the fourth quarter amounted to 7.2%, similar to that in the corresponding quarter last year. ARPU in the fourth quarter totaled NIS 49 compared to NIS 55 in the fourth quarter last year, mainly reflecting the negative impact of the decline in roaming service revenues as a result of the sharp decline in international travel due to COVID-19.

In the fixed-line segment, our fiber-optic infrastructure already reaches more than 760 thousand households as of today. The number of Homes Connected (HC) within buildings connected to our fiber-optic infrastructure was 465 thousand at year-end 2020, an increase of 141 thousand in the year and 33 thousand in the fourth quarter. As of the end of 2020, Partner has 139 thousand fiber-optic subscribers, an increase of 63 thousand in the year, and 19 thousand in the fourth quarter. The number of fiber-optic subscribers from households within HC buildings reflects an HC penetration rate of approximately 30% as of the end of 2020, compared with approximately 23% at the end of 2019.

Regarding television, the number of subscribers grew by 8 thousand in the last quarter of 2020, bringing the total increase this year to 44 thousand. As of today, the number of TV subscribers totals approximately 234 thousand. The rate of growth from the beginning of 2021 mainly reflects the temporary impact of the technical malfunction in the television broadcasts during the second week of January 2021.

As we expected, we finished the fourth quarter of 2020 with only a small decrease of 6% in Adjusted EBITDA compared to the corresponding quarter, in light of the continued cost-cutting measures along with growth in the fixed-line activity which partially offset the impact of the almost complete cessation of international travel due to COVID-19.

Looking ahead, the Company expects that, in the first quarter of 2021, the negative impact will continue as a result of the almost complete cessation of air travel and closure of stores for part of the quarter; however, the overall impact is not expected to differ materially from its scope in the preceding quarter.

The Adjusted Free Cash Flow (before interest and including lease payments) for 2020 totaled NIS 72 million. CAPEX totaled NIS 573 million. For the fourth quarter, the Adjusted Free Cash Flow (before interest and including lease payments) was negative and totaled approximately minus NIS 3 million, with CAPEX totaling NIS 156 million. The investments in 2020 reflect the continued efforts of the Company to expand the deployment of the fiber-optic infrastructure, for which we expect to complete the major rollout phase during the year 2023, and the continued penetration of the television market. These investments continue to be made possible as a result of Partner's financial stability and strong balance sheet, and they continue even during the challenging period of the COVID-19 crisis.

Net debt was NIS 657 million at the end of the year 2020, compared with NIS 957 million at the end of last year, a decrease of NIS 300 million, mainly reflecting the Company's successful capital raising in January 2020 in the amount of NIS 276 million, net. The Company's net debt to Adjusted EBITDA ratio stood at 0.8 at year-end 2020, which demonstrates the Company's financial strength."

For earnings history and earnings-related data on Partner Communications (PTNR) click here.

You May Also Be Interested In

• Citi agrees to acquire rewards platform Kard Financial
• Cineverse Corp (CNVS) Misses Q1 EPS by 20c; Offers Guidance
• Boston Omaha Corporation (BOC) Misses Q2 EPS by 2c