Bezeq upgrades full-year guidance on back of strong 2Q results

6 Aug 2009

Israeli incumbent Bezeq has reported its financial results for the three months ended 30 June 2009, exceeding expectations by posting an 18.6% year-on-year rise in net profit to ILS541 million. Bezeq also revealed a 5.2% increase in revenue compared to the same period a year earlier, up to ILS3.25 billion, again ahead of analyst forecasts. Earnings before interest, tax, depreciation and amortisation (EBITDA) were ILS1.31 billion, a 5.9% annual increase. On the back of the stronger-than-expected results, coupled with the ‘improved visibility of the economic environment’, Bezeq said that it was revising its full-year outlook, saying it now expects to achieve revenue, net profit, EBITDA and operating cash flows above those for the full-year 2008 results.

Despite the group posting impressive results for the quarter, Bezeq’s fixed line voice division continues to falter. In the three-month period revenue for fixed line voice services fell 2.6% to ILS1.31 billion, while EBITDA was 2.1% down against the same period in 2008. The company did note that strong growth in revenue from ADSL services, however, had helped to offset the decline associated with fixed line voice connections. Fixed line subscribers fell 5% against end-June 2009 to 2.55 million, while customers taking Bezeq’s broadband services rose 3.5% to 1.02 million. Also helping to boost the company’s results, Pelephone, Bezeq’s wireless arm, posted a 13.3% rise in revenue for the quarter, with EBITDA up 19.2% y-o-y, with mobile subscribers rising 2.2% y-o-y to 2.69 million.