Standard & Poor (S&P)'s Ratings Services has raised its long-term ratings on Israeli mobile operator Partner Communications to BB- from B+. At the same time, the senior unsecured debt rating was raised to B from B- and the outlook is stable.
Partner reported total debt of 2.9 billion Israeli shekels ($0.7 billion) as at September 30, 2003. "Partner has consolidated its position, improved operating performance and delayed capital expenditure in 2003, resulting in stronger cash generation. This leaves Partner with lower debt and a stronger financial profile as it enters its period of heavier investment in a third generation network in 2004," said S&P's credit analyst Simon Redmond.
"The stable outlook reflects Standard & Poor's view that the risks that Partner faces in its operating environment are presently balanced by the benefits of the company's improving financial profile," said Redmond.
Partner has outperformed expectations in 2003 and its consequently stronger financial profile leaves it better positioned to manage the challenges in its operating environment. These challenges include increasing competitive pressures from Cellcom Israel and Pele-Phone Communications as a result of technology driven competition, particularly in enhanced 2.5G mobile services, and slower market growth reflecting high effective penetration.
Ratings are supported by Partner's sound operational performance sustained by a strong customer and quality focus; good profitability with EBITDA margins of 32.8 percent in the third quarter of 2003; Free operational cash flow of NIS 352 million for the six months to September 30, 2003; reduced gearing with lease-adjusted net debt to annualized EBITDA of 2x for the first six months of the year and operational support from Hutchison Whampoa. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
