Bezeq posts net profit, EBITDA improvements in 2Q20, despite 3.1% revenue decline

17 Aug 2020

Israel’s Bezeq has reported revenues of ILS2.16 billion (USD632 million) for the quarter ended 30 June 2020, representing a 3.1% decline from the corresponding period a year earlier, with an increase in turnover from fixed line services failing to offset drops in the mobile and pay-TV sectors.

In the three-month period under review, Bezeq’s fixed line division reported total revenues of ILS1.04 billion, up from ILS1.02 billion in 2Q19, with fixed broadband turnover rising by 1.5% year-on-year to account for ILS402 million of that (2Q19: ILS396 million), while fixed voice revenue declined by 2.3% on an annualised basis, to ILS258 million. In the mobile sector, meanwhile, Bezeq wireless subsidiary Pelephone recorded total revenues of ILS535 million in 2Q20, down from ILS570 million a year earlier, with a minor uptick in equipment revenues (up 0.7% y-o-y at ILS141 million) more than offset by an 8.4% drop in service revenues, which fell to ILS394 million. For its part, satellite TV operator yes recorded a turnover of ILS319 million, down from ILS337 million in 2Q19.

With regards to the company’s other headline financial indicators, Bezeq reported an operating profit of ILS512 million in 2Q20, compared to a loss of ILS94 million in the year-ago period, while EBITDA stood at ILS977 million, up from ILS384 million. Net profit of ILS270 million in 2Q20 contrasted with a net loss of ILS1.57 billion a year earlier, with the company noting that this improvement was attributable to both a higher operating profit as well as the write-off of the balance of the tax asset in respect of losses from satellite TV operator yes that it had recorded in the corresponding quarter of 2019.

In operational terms, Bezeq ended June 2020 with 1.571 million fixed broadband lines (retail and wholesale combined) on its books, up from 1.566 million three months earlier, but down from the 1.613 million it reported at mid-2019. Fixed voice lines continued a downward trend, falling to 1.675 million at end-June 2020, compared to 1.768 million a year earlier. Pelephone, meanwhile, closed out the second quarter of the year with a mobile subscriber base of 2.347 million, up from 2.263 million at June 2019, with the lion’s share of accesses being post-paid (1.959 million, up from 1.866 million).

Commenting on the company’s performance, Bezeq CFO Yali Rothenberg was cited as saying: ‘The group’s strong financial results in the second quarter validate the strength of the group operations, the diversification of sources of revenue and the ability to streamline expenses. Despite the challenges COVID-19 posed on the Israeli economy, the group posted a year-over-year increase in adjusted EBITDA and adjusted net income. This achievement was possible thanks to a combination of an increase in Bezeq fixed line activities with continued efficiency in the subsidiaries.’