Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) has reported a 6.9% drop in third quarter revenue, from NIS 2.4 billion last year, to NIS 2.23 billion this year. The fall in the telecommunications group's revenue was mainly due to a decline in revenue from mobile services because of the rising level of competition in the mobile telephony market, and a decline in revenue from fixed-line services, mainly because of a reduction in the tariff for interconnect fees between fixed-line networks.
Operating profit totaled NIS 671 million in the third quarter of 2014, compared with NIS 721 million in the corresponding quarter last year, representing a 6.9% decline. EBITDA (earnings before tax, interest, depreciation and amortization) amounted to NIS 998 million (44.7% of revenue) in the third quarter of 2014, compared with NIS 1.03 billion (43.8% of revenue) in the in the corresponding quarter, representing a 5% decline.
Bezeq says the decline in operating profit and EBITDA was because of the erosion of the profitability of mobile telephony unit Pelephone, because of increasingly tough competition in its market.
Bezeq made a net profit in the third quarter of 2014 of NIS 428 million, which compares with NIS 449 million in the corresponding quarter, representing a 4.7% decline.
Cash flow from regular operations in the third quarter this year totaled NIS 950 million, compared with NIS 1.1 billion in the corresponding quarter, representing a decline of 16.9%. The decline is attributed to the erosion of Pelephone's profitability and changes in working capital.
Bezeq's management has reiterated its guidance of a total net profit attributable to shareholders of NIS 2 billion in 2014.
Bezeq CEO Stella Handler said, "The company's consistent strategy focusing on investment in advanced infrastructure and providing the highest standard of service is reflected in, among other things, its success in recruiting more than 100,000 Internet customers in the past year."
Bezeq's share price is currently up about 1.5% on the Tel Aviv Stock Exchange.
Published by Globes [online], Israel business news - www.globes-online.com - on November 10, 2014
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