Bezeq Q3 profit dips 18%

Shlomo Rodav Photo: PR

Bezeq chairperson Shlomo Rodav: We are already seeing initial results of our streamlining process.

Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) had revenue of NIS 2.247 billion in the third quarter, which compares with NIS 2.301 in the corresponding quarter of 2018. The group's operating profit totaled NIS 459 million, up from NIS 429 million in the corresponding quarter.

The telecommunications group posted a net profit of NIS 191 million for the third quarter of this year, which compares with NIS 234 million in the corresponding quarter, representing a drop of 18%.

Bezeq's share price is currently down 1.74% on the Tel Aviv Stock Exchange.

At NIS 440 million, fixed-line revenue in the third quarter of this year was down by NIS 35 million in comparison with the previous quarter, and NIS 11 million down in comparison with the third quarter of 2018.

Bezeq's third quarter 2019 EBITDA amounted to NIS 665 million, which compares with NIS 669 million in the corresponding quarter of 2018, representing a decline of 0.6%. Free cash flow in the third quarter of 2019 was NIS 328 million.

The company reports that at the end of the third quarter of this year it provided 1.589 million Internet lines (including wholesale lines) , some 24,000 lines fewer than at the end of te previous quarter. The base of lines sold in the framework of the wholesale market amounted to 601,000, 11,000 fewer than at the end of the previous quarter.

Bezeq reiterated the updated guidance for 2019 as a whole that it provided in its second quarter financials. It sees a loss to shareholders of NIS 1.1 billion, and EBITDA of NIS 2.9 billion. This compares with a profit of NIS 900 million-NIS 1 billion and EBITDA of NIS 3.9 billion forecast in its full-year 2018 financials. The updated guidance includes the write-off of a tax asset on account of losses at broadcasting subsidiary Yes of NIS 1.166 billion; a loss from the write-down of the fair value of mobile telephony subsidiary Pelephone of NIS 951 million, and a capital gain of NIS 403 million from the sale of the company's Sakia site. The updated guidance also includes a provision for the cost of early retirement of employees at Bezeq and at subsidiaries Pelephone, Bezeq International, and Yes.

Bezeq chairman Shlomo Rodav said, "In this quarter too, all the companies in the Bezeq group deepened their efforts to adapt the structure of their activities to the changes taking place in the Israeli telecommunications market. We continue to carry out streamlining measures, the initial effects of which can already be seen, with a 4% drop in salary costs in the group in comparison with the corresponding quarter. In 2019, agreements have been signed at the three subsidiaries enabling them to downsize by more than 1,000 employees in the coming two years. Since the beginning of this year, 261 employees have left Bezeq fixed-line, and the board has approved the retirement of a further 200 employees.

"Now that the collective labor agreements at the three subsidiary companies have been renewed, we are making progress with processes of synergy and cooperation with the aim of exploiting the companies' business potential. In the past few months, we have launched new services, products, and areas of activity in each of the group companies, the aim of which is to generate growth and to adjust our business to consumer taste and the market's changing needs."

Published by Globes, Israel business news - en.globes.co.il - on November 18, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Shlomo Rodav Photo: PR
Shlomo Rodav Photo: PR
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