Bezeq reports massive loss in 2018, halts dividends

Shlomo Rodav Photo: PR

The loss was caused by huge write-offs after cutting the value of Yes and an early retirement plan for employees.

Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) has reported a massive NIS 2.31 billion loss for 2018 after write-offs during the year. The write-offs were mainly the NIS 1.63 billion for lowering the value of satellite broadcaster Yes, and NIS 559 million for early retirement of employees.

Revenue in 2018 was NIS 9.32 billion, a fall of 4.8% compared with NIS 9.79 billion in 2017. Revenue in the fourth quarter of 2018 was NIS 2.33 billion, down 5.4% compared with NIS 2.46 billion in the corresponding quarter of 2017. The reduction in revenue was across all areas of activity.

Operating loss in 2018 was NIS 548 million compared with an operating profit of NIS 2.11 billion in 2017. Operating loss in the fourth quarter was NIS 1.81 billion compared with an operating profit of NIS 427 million in the fourth quarter of 2017.

Net loss in 2018 was NIS 1.07 billion compared with a net profit of NIS 1.24 billion in 2017. Net loss in the fourth quarter of 2018 was NIS 1.76 billion compared with a net profit of NIS 205 million in the fourth quarter of 2017.

Bezeq said that due to the losses, dividend payments would be halted for the next two years.

Bezeq chairman Shlomo Rodav said, "Over the last twelve months, we have implemented profound change in the way the group operates in order to conform to the most stringent corporate governance standards. At the same time, we have made significant strategic moves to give the Bezeq Group the ability to continue to successfully cope with the technological, competitive and regulatory changes. In this context, we have taken many steps, including reductions in the management team and streamlining processes in the subsidiaries, while negotiating with the labor unions, with a new collective arrangement already signed by yes. yes also began a significant project to migrate from satellite to IP broadcasting. Concurrently, Bezeq Fixed-Line is implementing a significant employee retirement plan that will lead to material efficiencies in the company."

He added, "Alongside these, we continued to create future growth engines for the Group, so that we will continue to be the leading telecommunications company in Israel regardless of the intense competitive environment, existing regulatory conditions and expected changes in technologies and business models in Israel and the world. This is done by developing new areas of activity in each of the companies, while preparing the basis for the next generation of communications services. We are in talks with the regulator so that advanced communications infrastructures can be developed for the State of Israel. We are ready to invest huge sums of money for this purpose, and hope that the State will succeed in creating a clear, positive and equal regulatory framework in order to bring the State of Israel to the forefront of global infrastructure. Bezeq is the only company in Israel that is willing and capable of deploying fiber optics nationwide and provide everyone with ultra-fast internet, and Pelephone has already begun preparations for the 5G cellular network."

Published by Globes, Israel business news - en.globes.co.il - on March 28, 2019

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

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Shlomo Rodav Photo: PR
Shlomo Rodav Photo: PR
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