Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) today raised its full-year guidance, after reporting lower revenue and profits for the first quarter of 2014, due to lower fixed line and mobile results.
Revenue fell 4% to NIS 2.31 billion for the first quarter from NIS 2.41 billion for the corresponding quarter of 2013, and net profit fell 8% to NIS 457 million from NIS 497 million. Cash flow from operations rose 7% to NIS 1.04 billion for the first quarter from NIS 972 million for the corresponding quarter.
Bezeq raised its full-year net profit guidance to NIS 2 billion and free cash flow guidance to NIS 2.5 billion. It cites the sale of Coral Tel Ltd., which operates the Yad2 classified ads website, the approval of the provision for the early retirement of employees, and Pelephone's agreement to establish an LTE network.
"These are challenging times for the Israeli telecom market, but I am certain that our managerial and technological strengths, as well as our unique service offering, will guarantee the group's future growth and success," said Bezeq chairman Shaul Elovitch. “We continue to invest heavily in advanced infrastructures to strengthen our leadership in the Israeli telecom market. We are rolling out fiber optic cables throughout the country at record pace, investing in state-of-the-art technologies for multi-channel TV, and are taking action in preparation for the deployment of our new 4G LTE mobile network."
Bezeq's fixed line revenue fell 4.6% to NIS 1.08 billion for the first quarter from NIS 1.13 billion for the corresponding quarter, and net profit also fell 4.6% to NIS 332 million compared with NIS 348 million.
Pelephone Communications Ltd. reported a 29.4% drop in net profit to NIS 108 million for the first quarter from NIS 153 million for the corresponding quarter. Revenue fell 5% to NIS 917 million for the first quarter from NIS 964 million for the corresponding quarter. Cellular services revenue fell 11% to NIS 637 million from NIS 714 million, but equipment sales rose 12% to NIS 280 million from NIS 250 million.
Pelephone attributes the lower cellular services revenue to a 4% drop in the number subscribers to 2.63 million at the end of March from 2.74 million a year earlier, and lower average revenue per user (ARPU) to NIS 80 per month in the first quarter from NIS 86 per month in the corresponding quarter, and the higher equipment sales to increased sales of tablets, laptops and accessories.
Published by Globes [online], Israel business news - www.globes-online.com - on May 29, 2014
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