Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) today reported 43% net profit growth for the first quarter of 2012, despite lower revenue.
Bezeq will pay a dividend of NIS 1.58 billion on May 21, including NIS 1.07 billion regular dividend and NIS 500 million for the third of six equal semi-annual payments as part of the company's three year distribution of the capital reduction.
Revenue fell 5.9% to NIS 2.74 billion for the first quarter from NIS 2.91 billion for the corresponding quarter of 2011, but net profit rose 43% to NIS 582 million (NIS 0.21 per share) from NIS 407 million. Bezeq attributed the drop to lower revenue from mobile services and handset sales, by its mobile subsidiary Pelephone Communications Ltd., which more than offset higher landline revenue from increased broadband services over the company's next generation network (NGN).
Cash flow from operations rose 39% to NIS 998 million for the first quarter from NIS 775 million for the corresponding quarter, due to changes in working capital. Bezeq CFO Alan Gelman said that the free cash flow would further improve with the completion of the NGN project and submarine cable deployment.
Bezeq's fixed-line revenue rose 1.8% to NIS 1.2 billion for the first quarter from NIS 1.18 billion for the corresponding quarter, and net profit rose 182% to NIS 348 million from NIS 123 million. The company attributed the growth to a 9.7% increase in internet and data services revenue to NIS 541 million, stemming from the upgrade of internet access speed. The average speed rose 56% over the corresponding quarter to 7.5 Mbps. Bezeq had 2.37 million phone lines at the end of March, up 0.4% over a year earlier, but average revenue per line fell to NIS 74 per month during the first quarter from NIS 79 per month during the corresponding quarter.
YES's revenue rose 2.8% to NIS 417 million for the first quarter from NIS 417 million for the corresponding quarter, and the net loss narrowed 13% to NIS 64 million from NIS 73 million. The company attributed the improvement to increased sales of advanced services such as VOD and yesMaxTotal.
Bezeq's international calls carrier and ISP subsidiary Bezeq International Ltd. launched its submarine cable and NGN in January, and stated that over half of its customers now have internet access speeds of 10 Mbps or higher. The company's revenue rose 1% to NIS 332 million for the first quarter from NIS 329 million for the corresponding quarter.
Bezeq's share price fell 1.9% in morning trading to NIS 5.39, giving a market cap of NIS 14.9 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on May 9, 2012
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