Bezeq reports 27.7% drop in net profit in 2016

30 Mar 2017

Israel’s Bezeq has published its financial results for the year ended 31 December 2016, revealing a sizeable decline in EBTIDA and net profit, despite a small increase in revenues.

In the twelve-month period under review Bezeq generated a total turnover of ILS10.084 billion (USD2.78 billion), up from ILS9.985 million in FY 2015, with this increase attributed to the consolidation of broadcaster Yes from the start of the second quarter of 2015, partially offset by a decrease in revenues in all group segments and primarily at Pelephone. EBITDA in 2016 totalled ILS4.06 billion, compared to ILS4.25 billion a year earlier, with an EBITDA margin of 40.3% (FY 2015: 42.6%), while operating profit stood at ILS2.32 billion, down from ILS2.57 billion. Net profit in 2016 slumped by 27.7% to ILS1.24 billion, meanwhile, with the fourth quarter of the year seeing a notable drop, almost halving to ILS369 million. Bezeq noted that the drop in profit in the last quarter of 2016 was primarily due to one-time financing and tax income fee of ILS121 million recorded in the corresponding quarter of 2015 linked to an agreement with the Tax Authority, while it also pointed to the effect of a decrease in the corporate tax rate of ILS79 million. Bezeq’s CAPEX in 2016 totalled ILS1.42 billion, down from ILS1.64 billion in the previous year, attributed in part to a ‘reduction in investments in all group segments and specifically at Pelephone, mainly due to payments in 2015 for LTE 4G frequencies’.

In operational terms, as at 31 December 2016 Bezeq’s mobile unit had 2.402 million subscribers on its books, up from 2.348 million three months earlier, but down on the 2.651 million reported for end-2015. Broadband lines at the end of the reporting period numbered 1.558 million, up from 1.479 million, of which 377,000 were wholesale lines, compared to 244,000 at end-2015. Fixed voice accesses continued to decline, meanwhile, falling to 2.119 million at the end of last year, representing a 2.8% year-on-year drop.