Partner After The Dividend: How Much Cash Is Really Left After All Uses
Partner reported NIS 386 million of adjusted free cash flow in 2025, but after financial interest, financial debt amortization, and the NIS 250 million dividend paid in March 2025, the all-in cash picture falls to negative NIS 51 million. The rise in cash to NIS 662 million also reflected the release of short-term deposits, so the 2026 test is not only how much the business generates, but how much cash is actually left for distribution.
The main article argued that 2026 will no longer be judged mainly on whether Partner’s operations are improving, but on how the company uses its cash balance. This follow-up isolates only that question. Not fiber. Not TV. Not competition. Just the gap between the adjusted free cash flow the company presents and the cash that is actually left after the year’s full cash uses.
The short answer is sharp. Partner’s adjusted free cash flow is a useful metric, but it is not the cash left for shareholders. In 2025 the company generated NIS 998 million from operating activity and reported adjusted free cash flow of NIS 386 million, or NIS 354 million after financial-debt interest. But once financial-debt amortization of NIS 155 million and the NIS 250 million dividend paid in March 2025 are added back into the bridge, the picture flips to negative NIS 51 million.
What matters most is that this gap does not open because leases were ignored. Quite the opposite. Partner’s definition of adjusted free cash flow already deducts NIS 134 million of lease principal and NIS 24 million of lease interest, NIS 158 million in total. So anyone reading the NIS 386 million and assuming the metric ignores infrastructure burden is missing the point. The real issue sits one layer below the adjusted metric: financial-debt interest, financial-debt principal, and the dividend.
Three findings should frame the read:
- First: Partner’s adjusted metric is more conservative than it may look, because it already deducts lease cash.
- Second: the 2025 dividend was not funded entirely from the cash generated in 2025 itself, even though adjusted free cash flow looked strong.
- Third: the increase in year-end cash does not contradict that reading, because it also relied on a NIS 211 million release of short-term deposits and NIS 21 million of interest received.
What Adjusted Free Cash Flow Actually Measures
The first step is to get the definition right. Partner defines adjusted free cash flow as cash flow from operating activity, less purchases of property and equipment, less purchases of intangible and other assets, and less lease principal and lease interest payments. In other words, this is not a flattering metric that sidesteps infrastructure reality. It already captures a large part of the recurring cash load of a capital-intensive telecom operator.
In 2025 the bridge looked like this: NIS 998 million of cash from operating activity, less NIS 308 million of property and equipment purchases, less NIS 146 million of intangible and other asset purchases, and less NIS 158 million of lease cash payments. That produces NIS 386 million of adjusted free cash flow. After NIS 32 million of interest paid on bonds and bank loans, NIS 354 million remains.
It is also important to give that metric proper credit. The improvement from NIS 285 million in 2024 to NIS 386 million in 2025 was not created by cosmetic adjustments. CAPEX fell by NIS 73 million to NIS 454 million, and working capital also improved. At the same time, the rise in operating cash flow came despite a tax payment of about NIS 45 million in December 2025 on disputed tax assessments. So the adjusted metric does say something real about the business’s cash-generating power.
The mistake begins when it is used as if it were equivalent to cash freely available to equity holders. It is not. Adjusted free cash flow is a good operating measure of how much cash the business produces after ongoing network and intangible investment, and after lease cash. It does not answer how much cash is left after the company also pays its lenders and its shareholders.
| Cash Layer | 2025 | What It Includes |
|---|---|---|
| Cash from operating activity | 998 | Cash generated by the business during the year |
| Adjusted free cash flow | 386 | After NIS 454 million of CAPEX and intangibles, and after NIS 158 million of lease cash |
| Adjusted free cash flow after financial-debt interest | 354 | After NIS 32 million of bond and bank-loan interest |
| Before dividend, after financial-debt amortization | 199 | After another NIS 155 million of bond and loan principal repayments |
| After all 2025 cash uses | -51 | After also deducting the NIS 250 million dividend paid in March 2025 |
That chart is the core of the continuation. It shows that adjusted free cash flow is not a flawed number. It is simply not the end of the story.
Where The Gap Actually Opens
The gap between NIS 386 million and negative NIS 51 million is not noise. It is made up of three very real layers of cash outflow.
The first layer is NIS 32 million of interest paid on bonds and bank loans. This is not the largest line in the bridge, but it is an important reminder that Partner’s adjusted free cash flow does not include the financing cost of financial debt. Anyone trying to understand what is truly left has to include it.
The second layer is principal amortization. In 2025 Partner repaid NIS 125 million of bonds and another NIS 30 million of bank loans, NIS 155 million in total. This is exactly where the read starts to change. If one stops at NIS 386 million, or even at NIS 354 million, it is still possible to tell a story of a cash balance building. Once principal repayments are included, only NIS 199 million remains before any distribution to shareholders.
The third layer is the distribution that already took place. In March 2025 the company paid NIS 250 million of dividend. Once that is deducted too, the full year drops to negative NIS 51 million. That distinction matters. It does not mean Partner had a liquidity problem. It does mean that the dividend was not funded only from the year’s newly generated cash. Part of it came from liquidity the company already had.
That is exactly why the sentence “Partner generated NIS 386 million of adjusted free cash flow” is true, but still insufficient to settle the capital-allocation debate. Adjusted free cash flow answers an operating question. The all-in cash bridge answers the capital-allocation question.
Why Cash Still Went Up Even Though The Bridge Is Negative
This is probably the easiest point to miss on a quick read. If the year ends at negative NIS 51 million after all uses, how did cash and cash equivalents still rise from NIS 481 million to NIS 662 million?
The answer sits in the investing section. During 2025 Partner recorded a net repayment of short-term deposits of NIS 211 million, and also received NIS 21 million of interest. In other words, the company did not only generate cash. It also released cash that had previously been parked in short-term deposits. That is why the increase in cash does not invalidate the negative all-in bridge. It simply shows where another NIS 232 million came from.
That is also why the right read is not to look only at the NIS 662 million of year-end cash. If cash, cash equivalents, and short-term deposits are combined, the picture actually declines from NIS 692 million at the end of 2024 to NIS 662 million at the end of 2025. So cash alone looks better, but total liquidity did not expand. It slipped modestly.
That chart changes the interpretation of 2025. It shows that this was not a year of organically expanding liquidity. It was a year of shifting liquidity mix while paying a dividend, repaying debt, and continuing to invest. That is still a relatively comfortable place to be, especially with net financial debt down to NIS 128 million and covenant room very wide. But it is less comfortable than the simple headline “cash rose to NIS 662 million” suggests.
There is also a practical implication for 2026. The short-term deposits that were released in 2025 are no longer a layer of cash that can be released again in the same way next year. So the same lever that helped cash look stronger in 2025 does not automatically repeat in 2026.
Why 2026 Suddenly Looks Tighter
The reason this bridge matters now is not historical. It is forward-looking. On March 10, 2026 the board approved a NIS 465 million cash dividend, and on the same day decided to examine a further distribution of up to NIS 500 million not out of profits. At the same time, 2026 CAPEX guidance stands at NIS 450 million to NIS 500 million, which is roughly around the 2025 investment level, with no real relief.
That is still not the whole story. The Bezeq IRU table shows NIS 461 million of outstanding principal at the end of 2025, of which NIS 127 million is due in 2026. So the 2026 test is not only whether the business can continue to produce a similar level of adjusted free cash flow. The test is whether, after CAPEX, leases, interest, financial-debt service, and IRU cash commitments, enough room remains to justify a more aggressive distribution stance.
This is where it is important not to overstate the case. Partner does not look like a company walking into balance-sheet trouble. Net debt to adjusted EBITDA was only 0.1 at the end of 2025, and shareholders’ equity of NIS 2.322 billion remains far above bond-indenture thresholds. So this is not a near-term credit-risk story. It is a discipline story. Once debt stopped being the bottleneck, the quality of the decision around every shekel leaving the company became much more important.
That is why the right way to read 2026 is not through one question, “can the company distribute?” The technical answer is probably yes. The better question is different: will the next distribution rest on cash truly generated after all uses, or on the fact that the balance sheet can still absorb another outflow?
Conclusions
Partner ended 2025 with a relatively strong NIS 386 million of adjusted free cash flow. That is not cosmetic, and it is not a metric that sidesteps infrastructure burden. On the contrary, it already includes NIS 158 million of lease cash payments. But it is still not the cash left for shareholders.
Once NIS 32 million of financial-debt interest, NIS 155 million of financial-debt amortization, and the NIS 250 million dividend paid are added, the year ends at negative NIS 51 million on an all-uses basis. The increase in cash to NIS 662 million only looks cleaner if one forgets that it was also supported by the release of NIS 211 million of short-term deposits and by interest received, while total liquidity actually slipped from NIS 692 million to NIS 662 million.
Current thesis: the important gap at Partner is not between earnings and cash flow, but between adjusted free cash flow and the cash that is truly left after debt service and dividend.
What changes versus the main article: there, this was a compressed capital-allocation warning inside the broader thesis. Here the point can be sharpened. The adjusted number is not the problem. What happens after it is the problem.
Counter-thesis: one can argue that the caution is overstated because net financial debt is very low, covenants are distant, and the company can refinance debt or simply use part of its existing cushion without making the situation problematic.
What would change the read in the short to medium term: quarterly results showing that even after NIS 450 million to NIS 500 million of CAPEX and the March 2026 dividend, the liquidity cushion remains stable without depending on one-off sources or on another release of balance-sheet cash.
Why this matters: in telecom, the difference between strong operating cash flow and the cash actually left after network upkeep, debt service, and distribution is exactly the difference between a dividend funded by genuine surplus and a dividend funded by a balance-sheet choice.
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