Bezeq records increased net profit in 2014, bolstered by sale of Coral Tel

26 Mar 2015

Israeli fixed line incumbent Bezeq has published its financial results for both the three- and twelve-month periods ended 31 December 2014.

For the last three months of 2014 Bezeq reported revenues of ILS2.26 billion (USD572.7 million), down from ILS2.409 billion a year earlier, with the decline primarily linked to lower turnover from cellular services, while for the full year period total turnover was down by 6.1% year-on-year to ILS9.055 billion. Operating expenses in 2014 totalled ILS3.37 billion, compared with ILS3.58 billion in the previous fiscal year, with fourth quarter expenses down by 11.7% to ILS853 million; Bezeq attributed such decreases to ‘a reduction in most of the expense items of Bezeq Fixed Line and Pelephone’. Operating profit meanwhile stood at ILS3.23 billion in 2014, up from ILS2.82 billion a year earlier, with EBITDA totalling ILS4.51 billion, up from ILS4.13 billion. Net profit attributable to Bezeq shareholders for the full year period was ILS2.11 billion, up from ILS1.77 billion, an increase of 19.2%, with the increase in profitability metrics said to be primarily due to the one-time gain from the sale of Coral Tel Ltd., the operator of the ‘Yad2’ web site. Capital expenditures for 2014 totalled ILS1.28 billion, up marginally from ILS1.23 billion reported in the previous year, with Bezeq saying its high level of investment was due to the continued nationwide rollout of its fibre-optic network, together with ‘investments in advanced technologies for the enhancement of the NGN (Next Generation Network)’.

In operational terms, at the end of December 2014 Bezeq notably reported that fixed line voice accesses were flat year-on-year at 2.205 million, falling just 0.5% compared to 2.216 million a year earlier, while the end-year figure was unchanged in the last three months of the year. Fixed broadband accesses meanwhile continue to rise, standing at 1.364 million as at 31 December 2014, up from 1.335 million a year earlier. The cellular arena continued to prove troublesome, however, with Bezeq’s wireline unit Pelephone seeing a 2.1% year-on-year decline in the number of customers on its books, from 2.642 million at end-2013 to 2.586 million a year later.

Commenting on the company’s annual performance, Bezeq chairman Shaul Elovitch said: ‘Despite increased competition across all the Group’s segments, we continue to believe our strategic focus on securing the industry-leading positions of our subsidiaries in both technology and services will create value for our customers and shareholders. 2014 was a year of massive investments in infrastructure. We deployed fibre-optics throughout the country, began upgrading to our 4G cellular network and launched advanced services in all of the Group companies. Our operating results confirm our ability to attract new customers in our core business, internet and television operations, while meeting the competition in the cellular market head on. Our financial results allow us to continue investing and securing our strong market position, while generating value for our shareholders.’