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HOT returns to profit in 2Q 2011

1 Sep 2011

Israeli cableco HOT Telecommunication Systems, which is controlled by French businessman Patrick Drahi, has released its financial results for the three months ended 30 June 2010, reports, with the operator posting a net profit of ILS78 million (USD28 million) for the quarter, compared with a loss of ILS49 million in the same period a year earlier. Turnover for the company’s second fiscal quarter of 2011 was ILS809 million, a 2% year-on-year increase, with most of the growth reportedly coming from value added cable TV services, such as video-on-demand (VoD), coupled with tariff increases. HOT meanwhile reported an operating profit of ILS156 million in 2Q 2011, much improved on the operating loss of ILS21 million seen in 2Q10, with the cableco attributing the stronger performance to cable TV services, with operating profit for such products totalling ILS21 million in the quarter compared to an ILS147million operating loss a year earlier. Operating profit from telephony services meanwhile increased by 15% y-o-y to ILS136 million from ILS118 million.

In operational terms, HOT reportedly added a net 3,000 broadband subscribers to bring its total to 759,000 at 30 June 2011, while it also saw telephony customer numbers rise by a net 7,000 to 626,000. The operator also added a net 1,000 cable TV subscribers during the second quarter, to reach 890,000 subscribers at the end of June 2011.

Despite subscriber growth, turnover from HOT’s fixed line telephony services fell to ILS252 million in 2Q11 from ILS255 million in the previous quarter, with the fall attributed to the reduction in inter-network connectivity fees; this was, however, partly offset by higher revenue from internet access. Average revenue per user (ARPU) in the second quarter of 2011 meanwhile stood at ILS214 per month, up from ILS207 million in 1Q11.

Commenting on the results, the report cited HOT CEO Herzel Ozer as saying: ‘Our strategic measures are bearing fruit, and have created the right platform for improving the financial results. We’ve successfully implemented measures that boosted revenue, while we simultaneously managed the expense side in a responsible and careful way, so that we have achieved steady improvement in all areas of business performance. Alongside the financial improvement, we’ve placed customer satisfaction as our priority, and I am pleased that HOT’s services are now of a high quality, and an uncompromising standard’.

Israel, HOT Telecommunication Systems

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