Q3 2020 Cellcom Israel Ltd Earnings Call

[laughter].

[laughter] [noise].

[music].

Ladies and gentlemen, thank you for standing by welcome to Cellcom third quarter 2020 results Conference call. All participants are present in listen only mode.

And managements formal presentation instructions will be given for the question and answer session. Other.

And during this conference is being recorded you share all received by now the company's press release. If you have not received it please contact dotcom Investor relations team at GK Investor and public relations.

One six force 66883559, or do you wait and the news section of the company's web site <unk>.

W. W. Dot cellcom, that's the old and Io.

Oh, no no like to handover the call to Mr. Evolent health of GK Investor Relations Mr. helped would you like to begin please and thank you operator, I would like to ex all of you just share going so that's what it just and that's my name is last conference call.

I would like to thank management for hosting this call today, we didn't share on the corn and me. So I think of items Geo and used to share.

Yes.

He said goodbye would open by providing a summary of this quarter and saw Mr.

I'm sorry, what did you just and I should.

And we'll then open the call for any questions that you may have.

Right and the Cologuard and mystic up I would like to remind the audience and other than that.

Core and management's prepared remarks may contain.

Forward looking statements, which are subject to risk and uncertainties and management and make any share folder Houston and funds to your question.

Therefore, the company channel petitions and safe Harbor for owners and extension and that is concerned.

Private Securities Litigation Reform Act of 195, and he is very securities and managing six years and.

Note that actual results might actually have from those discussed today and debt.

All these changes and more with each other discussion of day risk and uncertainties and the company's filings with the Securities and Exchange Commission in Sydney, and the risk factors and companies I know people for the year ended December and he says 29 gene try and.

On their phone 20, and switches filed on March 23, 2020, and with the answers.

In addition, any projections and the company's future performance and presented and you mentioned Macy's is can you share.

And can we assume no obligation to update these projections and to future as much and condition change.

I would now like I know other costs and these charges and goodbye.

Thank you and.

Good day and.

Income.

Non.

And following the closing, but there's a lot and deal and the and <unk> and stuff.

And his position.

Non.

So just a provider.

3.6.

And.

And David and Cellcom Israel.

And as the leading communication companies and we.

Good luck to contribute to our adjusted EBITDA.

Yes.

I would like to low income and both in Europe, Middle East and Socal World as well as all of our customers and that was now benefit from being part of the larger Cellcom summit.

Another important milestone that's happened in the quarter.

And the agreements with day holds telecommunication senior debt and I'd see.

Fiber and metals and construction season.

True up rather sheep with these other infrastructure and fives, which.

Which is still pending regulatory approvals.

Oh and free.

We significantly further and I do see market position and fiber optic company debt service.

Significant portion and the markets.

Other core other virus.

Looking at there is also in the third quarter and like everyone else, we continue to be and.

Correct and by.

The aspects of that growing up and then well.

We have worked hard to reduce our expenses while at the same time and.

Excellent service to all of our customers our.

Our ongoing cash flow generation and positive adjusted EBITDA demonstrates.

Our efforts to and tightly controlling expenses and offsets and foster the impact of the crisis.

Combined with our efforts to improve our efficiencies and lower our expenses, we believe that wants to call. These courses and the.

We will be more efficient and more focus more opportunities to grow and and.

And so our financial results.

And then normally or our third quarter is seasonally strong adjusted EBIT roaming services.

Roaming revenues from both debt first and these right and so comps in gross subscribers and the other countries. However.

No and global travel restrictions meant that the roaming revenues were largely our sense is for Israel.

In the third quarter, our stores were open as many as far as stuff, that's where on leave during the previous quarter return to work.

However, at the end of the third quarter and into the fourth quarter and we have seen.

Further countrywide and extended shutdown and sulfur points of sales and service centers and its means close the game.

Therefore, we will continue to see the impact on our revenues in the near term.

I would like to spend a few moments updating you on our specific strategic steps and which supports our long term goals.

Well, let's see generation.

Two generations the call just standard for social networks, that's and dramatically operating telecommunications companies capabilities and use right.

Okay.

Absolutely compete complete is participating in the frequency tendering, Israel, which include and.

Included in.

Next generation free.

We are pleased with our results and which will allow us to start selling higher speed and customers the near future.

Also enable us to improve our existing Fourg services, given on our larger range frequencies.

Writing and higher quality of service.

Shifting customers.

We expect to increase conference.

I wanted to sing and our network and other.

Yes.

Both IVC zone.

Holding and I do see.

Okay well.

Well positioned to benefit from the markets and London growth and fiber optic markets and use growth.

And one gigabyte per day.

Furthermore, and.

And we weren't six loans subscribers from ethnic suits and more advanced infrastructure. It allows us to reduce our landline wholesale access.

As I mentioned earlier during the quarter together with yes, we signed and the investment agreement.

For all else equal.

Equal.

Partnering ibcs pending regulatory approvals disagreements and allows for significant expansion and the scope of optical fiber deployment and and.

Thanks.

I'd now like deployments will transform Cellcom Israel from a company that rely on the fixed network of partners, so partner and extend.

Extensive and independent infrastructure.

And we still ready and 500000 households in building connected throughout Israel.

Free fiber infrastructure, and 80000 customers and already joined items.

Well ill join Guy and you see should this transaction to be true.

And this is being threatened ibcs potential to reach more customers.

About Cellcom TV.

And just continues to gain momentum and so other than 61000 household subscribers.

At the end of the third quarter, adding 6000, new subscriber and sports.

In summary.

Third quarter was a difficult being and let's just for Cellcom, Israel, but not all around the world.

However.

We continue to support and service all customers throughout the Israel with all their communication needs, whether it's a lesson telephones and net Oh, yes.

And just as my summary, and I would like to do and over two times value our CFO Shaun.

Hi fleets. Thank.

Thank you Vic and.

Good day to yield.

I will now provide you with a summary of our results and the details can be found in the press release, we issued earlier today.

This quarter, we consolidated for the first and the result of Golan Telecom, but only for one line and their wishes and acquisition was completed at the end of August.

Revenues for the third quarter of 2000 plan and so it's up to 966 million check as compared with 928 million, secondly, boating and third quarter of last year.

Out of those service revenues were 695 million check of 2% below the 709 million chicken reported in the third quarter of last year and the revenue strongly and we're right.

Hundred 61 million second 19% above two.

219 consecutive and both in the third quarter of last year.

Do you do among the other day increase of the online activities.

This type of revenue cash carry a lower profitability.

In addition, I would like to note steps and fixed line segments service revenue growth, 5% over the third quarter of last year to three.

We have written and and 27 me and second.

This increase resulted mainly from the net increase in the rate and in the revenues from the Internet and TV services.

Revenues were 414 million second compared with the 439 million chickens and the third quarter last year. The main reason full day decline is the ups and the from a long and revenues.

Incoming and outgoing due to the lack of since the election and travels.

Our adjusted EBITDA and the third flow those 2020 was 231 million checkout almost 24% of revenues.

And reflects assisting and.

And decrease compared with two.

271 million and seconds or 29.2 and.

Our sense of the revenue in the third quarter of last year.

The main reasons for the decline is gaps and lets say roaming revenue income and and I've got you just a lack of international travel as mentioned above.

Adjusted EBITDA from the fixed line segment was 117 million checks as compared with 86 million share last year, an increase of 32% and adjusted EBIT us and to set US segments was 114 million share as compared with 185 million second last year.

The net loss in the third quarter of 2020.

237 million shares compared with net loss of 2 million checking the sales force of last year.

Our free cash flow and was 44 million share count versus 53 million chicken and excluding the proceeds from the sales fiber infrastructures legacy.

Which total to 181 million shekels, and just third quarter sales last year, our cash capital expenditure for the third quarter of 2020 so to.

100, Oh, eight medium chicken versus 179 million share gains is that core jobs last year.

At the end of third quarter sales 2000, and planning our net debt stood at approximately 2.4 billion checked and the increase.

And the net debt is mainly due to the acquisition of growth and that was completed during this quarter and was paid in cash.

And does this third quarter and 2020, the company had approximately 3.6 million set us and subscribers compared with 2.7 at the end of the quarter. The ink was due to the new success again.

And true gold and acquisition and churn rate I will set us subscribers in the third quarter of 2000, <unk> lending was a 11.4% compared with 10% and this quarter was 2019.

Finally.

And then lastly, et cetera, and so this third quarter.

As far as the flow was 45.7 and.

And needs compared with 30, 53.2, and niece and this third quarter last year. The prior is and so the lower up was because of the local assortment and revenues during the quarter, we debt I would like to open and the color questions.

So I don't.

Thank you ladies and gentlemen at this time, we will begin the question and answer session. If you have a question. Please press star one if.

If you wish to cancel your request. Please press star two if you are using speaker equipment kind and with the handset before pressing the numbers questions will be pulled and the order. They are received please standby while we poll for your questions.

The first question is from happy Rosner of Barclays. Please go ahead.

Hi, This is Chris Reimer on Capex heavy thank you for taking my questions.

First if we could talk a little bit about the cellular market. We saw your announcement about ex cone.

Can you give us more color about the situation and what it means in terms of potential financial impact on Cellcom, if they don't pay and and potentially glad business.

Okay and.

And as you mentioned the EXL sales to pay their monthly.

Payments.

Sure and being the pages.

Beginning of the month and.

And.

We don't free to understand the reason they did and they are actually said and to.

You should the rugs.

Regarding the agreement between us that we feel to complete.

We don't and we don't accepted and.

We don't really understand.

And not know what the meantime.

And the expectations and bodes.

What we're going to do this or was and what happens with it.

I believe that the.

Very soon and.

We will know and reported office.

Okay and regarding fiber and.

And you go how are the agreement between hot and the IVC and just looking at the Big picture or do you think [laughter], sorry, there's a risk of overdose maybe with.

[noise] competition does it get 80% and and partner going full speed ahead with RBC as well deploying.

Well, we see it as you know we see the RBC deal that they do it all.

Very very important and significant issue for us.

Okay and assume that.

Day as for now.

You can see that so.

So coleman and partner on kind of second tier.

And the fixed line market means debt cost and then it has the cities across the country and we have some limited the facilities across the country.

And.

And.

Deal with all this will allow us to be part of it.

And network that will be deployed all over the country and actually we're going to be part of tier warm and looks to you soon.

That's why we see to the reported.

It will allow us and access to fiber optic over the country in the enterprise.

Yeah.

No that day.

The only other fees from infrastructure Pik note to some of that as leasehold and this infrastructure. So it's going to give us the strategy and the competition.

And between Us and authorized.

Okay. Thank you that's that's helpful.

If there are any additional questions. Please press star one if you wish to cancel your request. Please press star two please stand by while we poll for more questions.

And.

There are no further questions at this time Mr. Goodbye would you like to make your concluding statement yes.

Yes, thank you very much and we'd like to thank all of you for joining our and conference.

And your continued interest in our company I look forward to hosting you again.

Gold and a good day.

Thank you. This concludes the Cellcom Israel Ltd third quarter 2020 results conference call. Thank you for your my participation you May go ahead and disconnect.

[music].