B Communications Moves Confidently Into The Bezeq Era: Reports Financial Results For Q2 2010
B Communications Ltd. (NASDAQ: BCOM) (TASE: BCOM) today reported its financial results for the second quarter ended June 30, 2010.
Consolidation of Bezeq Results
On April 14, 2010, B Communications completed its acquisition of the controlling interest (approximately 30.42%) of Bezeq - The Israel Telecommunication Corp., Ltd. (“Bezeq”) in consideration for approximately NIS 6.5 billion (approximately US$ 1.75 billion). B Communications began consolidating Bezeq’s results into its financial statements as of the transaction date. In contemplation of its acquisition of the controlling interest in Bezeq, on January 1, 2010, the Company adopted International Financial Reporting Standards as issued by the International Accounting Standards Board, which are the financial reporting standards utilized by Bezeq, to replace its previous reporting standard, the generally accepted accounting principles in the United States (US GAAP).
To provide investors with transparent insight into its business, the Company has also provided its results on an unconsolidated basis in which its interest in Bezeq’s net income is presented as a single line item (see below, “B Communications’ Unconsolidated Q2 Financial Results”).B Communications Financial Results for Q2 B Communications’ revenues for the second quarter are derived entirely from Bezeq, whose results have been consolidated into the financial statements of B Communications as of April 14, 2010. As such, B Communications’ revenues for the second quarter were NIS 2.6 billion (US$ 671 million), a nine-fold increase compared with NIS 291 million reported in the second quarter of 2009, when its revenues consisted of the Company’s legacy communications business that was sold to Ampal-American Israel Corporation as of January 1, 2010. B Communications’ net loss for the second quarter was NIS 11 million (US$ 3 million), reflecting the impact of three significant items:
|(in NIS millions)||As of March 31, 2010 (pre-Bezeq transaction)||As of June 30, 2010 (post-Bezeq transaction)|
|Cash and cash equivalents||1,806||389|
|Total gross debt||(412)||(4,741)|
|Net cash / (debt)||1,394||(4,352)|
|Q2 2010 (NIS millions)||Q2 2010 (US$ millions)|
|One time acquisition expenses||(47)||(12)|
|PPA amortization, net||(42)||(11)|
|BCOM's interest in Bezeq's net income||166||43|
|BCOM's net loss||(11)||(3)|
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