Partner profit in the second quarter of 2021 totaled NIS 2.6 million

Partner Communications, a leading Israeli communications provider, announced today its results for the quarter ended June 30, 2021. Commenting on the results for the second quarter 2021, Mr. Avi Zvi, CEO of Partner, noted: “In the second quarter, Partner continued to lead the Israeli communications market in innovation and in business activity growth, while maintaining profitability - even at a time when the impact of COVID-19 is still noticeable.

Since I took office in June, I've been learning how the Company works, getting to know its employees and formalizing, with the management team and board members, a new company structure that will lead Partner in the future. I have discovered a Company with human capital of the first degree and management agility that, along with its financial strength, will advance Partner towards new and significant projects. Along with strategy building and Partner's new structure, we have begun to take steps in order to promote even further Partner's leadership in customer service and to increase the profitability in product lines and operational segments of the Company.” Mr. Tamir Amar, Partner's Deputy CEO & Chief Financial Officer, commented on the results: “In the second quarter of 2021, growth in revenues continued while maintaining a cost structure that enabled growth in profit. A moderate return of roaming service revenues along with an increase in the subscriber base led to cellular service revenue growth compared to the corresponding period last year. The fixed-line segment's growth trajectory continued along with an improvement in Adjusted EBITDA. Our cellular subscriber base totaled 2.97 million at quarter-end, an increase of 67 thousand in the quarter, of which 31 thousand were subscribers of data and voice packages provided to students with a fixed twelve-month package by the Ministry of Education as part of their COVID-19 program. Excluding these subscribers, the increase in Post-Paid subscribers totaled 36 thousand this quarter. The churn rate in the quarter amounted to 7.2%, compared to 7.5% in the corresponding quarter last year. ARPU in the quarter totaled NIS 48 compared to NIS 51 in the corresponding quarter last year, the decrease mainly reflecting the continued price erosion, although to a lesser extent, and the decrease in interconnect revenues, which were partially offset by a moderate increase in roaming service revenues. In the fixed-line segment, we continued to focus on connecting buildings to the Company's fiberoptic infrastructure. The number of homes connected within buildings connected to our fiber-optic infrastructure was 571 thousand at the end of the quarter, an increase of 57 thousand in the quarter. Partner’s fiber-optic subscriber base totaled 173 thousand at the end of the quarter, an increase of 18 thousand in the quarter and of 34 thousand since the beginning of the year, reflecting a 30% 3 penetration rate from potential customers in connected buildings. Regarding our television services, the subscriber base grew by 10 thousand in the second quarter of 2021, excluding the impact of the removal that we carried out of subscribers who had joined the Company at various times and had remained in trial periods of over six months without charge or usage. Including the impact of the removal, the reported subscriber base decreased by 11 thousand in the quarter. The results for the second quarter of 2021 reflect the Company's budgetary discipline. The level of OPEX remained stable whilst our subscriber base increased, and television content was expanded to include the "SPORT ONE" premium channels and others. Note that the OPEX level in the corresponding quarter last year was lower than usual due to a decrease in payroll and related expenses mainly due to employees being placed on unpaid leave during the quarter as a result of COVID-19. In addition, the results of the second quarter of 2021 include a provision for the Company’s contribution to the government-mandated fiber incentive fund in an amount of NIS 6 million. The purpose of the fund, which is funded by telecoms infrastructure and service providers, is to provide an incentive for telecoms operators (excluding Bezeq and its Group members) to deploy fiber-optic infrastructure in areas which are not included in the committed areas of Bezeq’s fiber-optic roll-out plan as provided to the Ministry of Communications. We estimate that a similar amount shall be provisioned for the fund during the second half of the year. Adjusted EBITDA in the second quarter of 2021 totaled NIS 213 million, an increase of 6% compared to the corresponding quarter last year and an increase of 10% excluding the fiber incentive fund provision. Looking ahead, the Company expects the moderate recovery in roaming service revenues, due to the continued increase in air travel, to continue in the third quarter of 2021. However, a retreat is possible in view of the possible implications of the new COVID-19 variants for air travel. Adjusted Free Cash Flow (before interest and including lease payments) for the quarter totaled NIS 8 million, and CAPEX payments for the quarter totaled NIS 139 million. Net debt stood at NIS 670 million at the end of the quarter, compared with NIS 658 million at the end of the corresponding quarter last year, an increase of NIS 12 million. The financial robustness of the Company remains strong, with the Company's net debt to Adjusted EBITDA ratio at 0.8 at the end of the quarter.”