Bezeq’s net profit jumps in 2Q14 on sale of Coral Tel

8 Aug 2014

Israeli fixed line incumbent Bezeq recorded a 71.2% year-on-year jump in net profit in the three months ended 30 June 2014, despite turnover falling against the same quarter a year earlier. With net profit attributable to shareholders standing at ILS810 million (USD233 million) in 2Q 2014, compared to ILS473 million in the same quarter of 2013, it noted that profitability metrics in the most recent reporting period had been influenced by the one-time ILS582 million gain from the sale of Coral Tel Ltd., which operates the ‘Yad2’ web site.

Total turnover in 2Q14 meanwhile stood at ILS2.250 billion, representing a 4.3% y-o-y decline, with this reduction attributed to lower revenues from cellular services due to ‘the challenging competitive environment’, while dwindling fixed line turnover was said to have been influenced by a decrease in fixed call termination rates. In the quarter under review Bezeq’s wireless unit, Pelephone, registered revenue of ILS843 million, compared with ILS915 million in the corresponding quarter of 2013, while Bezeq’s fixed turnover for the latest quarter totalled ILS1.07 billion, down from ILS1.12 billion.

Bezeq’s operating profit in the second quarter of 2014 meanwhile amounted to ILS1.23 billion, representing a 65.9% increase against 2Q13, while earnings before interest, tax, depreciation and amortisation (EBITDA) totalled ILS1.55 billion in the latest period, up from ILS1.07 billion.

In operational terms, at the end of June 2014 Bezeq’s wireless subscriber base numbered 2.610 million, down from 2.702 million a year earlier, while fixed voice lines also fell, declining by 0.9% y-o-y to 2.205 million. Broadband accesses, however, saw an increase, rising from 1.202 million at end-June 2013 to 1.308 million a year later.

Commenting on the quarterly performance, Bezeq’s chairman Shaul Elovitch noted: ‘Thanks to the diversity of our operations, we continue to demonstrate financial and operational strength despite increased competition. We will maintain our focus on developing infrastructure and state-of-the-art communications services by investing approximately ILS1.3 billion annually to optimally position Bezeq to meet the technological, commercial, and regulatory changes affecting the market.’

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