Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ) today published its consolidated financial report for the first quarter of 2009. The company posted record profit and revenue, and raised its outlook for the year as a whole. The consolidated report includes the results of subsidiaries cellular operator Pelephone Communications Ltd., Bezeq International Ltd. and satellite broadcaster YES.
Bezeq posted net profit of NIS 609 million for the first quarter, 58% more than the NIS 385 million for the corresponding quarter of 2008. The company attributed the growth to a reduction in expenses to NIS 2.29 billion for the first quarter from NIS 2.44 billion for the corresponding quarter, and a reduction in its net financing costs to NIS 37 million from NIS 100 million.
Net profit attributable to shareholders rose 47.8% to NIS 608 million for the first quarter from NIS 411 million for the corresponding quarter.
Bezeq CFO Alan Gelman said, "Based on the strength of our first quarter results the Bezeq Group is incrementally raising its full-year 2009 financial guidance, though we are closely monitoring current economic conditions and continue to remain vigilant with regards to any potential impact on our business."
Revenue rose 2% to NIS 3.16 billion for the first quarter from NIS 3.1 billion for the corresponding quarter. The company attributed the growth to a 7.8% increase in revenue from its mobile telephone business (Pelephone) to NIS 1.27 billion for the first quarter from NIS 1.17 billion for the corresponding quarter, which was partly offset by a 5.8% drop in its landline telephony business to NIS 1.33 billion from NIS 1.41 billion over the same period.
The proportion of revenue contributed by fixed-line telephony to Bezeq's consolidated revenue fell to 42% for the first quarter from 45% for the corresponding quarter, while mobile communications rose to 40% from 38% over the same period.
Free cash flow rose 157% to NIS 804 million for the first quarter from NIS 313 million for the corresponding quarter.
The number of Bezeq's fixed-line subscribers fell 4.9% to 2.58 million at the end of March from 2.71 million a year earlier. Average revenue per line fell 3.6% to NIS 81 for the first quarter from NIS 84 for the corresponding quarter. The number of ADSL high-speed Internet subscribers rose 4.2% to 1.01 million at the end of March from 970,000 a year earlier, while ARPU was unchanged at NIS 68.
52% of ADSL subscribers had bandwidth of at least 2 megabyte at the end of March, compared with 37% a year earlier.
Bezeq chairman Shlomo Rodav said, "These results are particularly impressive in light of the weak economic environment, a highly competitive sector landscape as well as the challenges associated with the development and launch of the new high-speed GSM (HSPA) and NGN platforms."
Bezeq's share rose 4.3% in early trading today to NIS 7.20.
Published by Globes [online], Israel business news - www.globes-online.com - on May 20, 2009
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