Bezeq records increase in revenue and net profit in 1Q21

27 May 2021

Israeli communications provider Bezeq has released its financial results for the quarter ended 31 March 2021, reporting a 1.6% year-on-year increase in revenue, to ILS2.22 billion (USD683 million), with a 3.5% rise in fixed line revenues – to ILS1.05 billion – helping offset a 0.5% decline in turnover from mobile services, which totalled ILS570 million. Reported EBITDA in the first quarter of 2021 amounted to ILS1.06 billion (EBITDA margin of 47.8%), representing a 16.7% annual increase from the ILS910 million (EBITDA margin of 41.6%) recorded in the first quarter of 2020. With Bezeq’s operating profit standing at ILS586 million in Q1 2021, up from ILS459 million a year earlier, the company’s reported net profit totalled ILS408 million, a 24.8% y-o-y increase primarily attributable to capital gains from the sale of real estate, as well as the partial cancellation of a provision for legal claims.

In terms of operational highlights, Bezeq reported 1.540 million total broadband lines (retail plus wholesale) on its books as of 31 March 2021, down from 1.566 million a year earlier, with an increase in retail connections – which rose to 1.001 million from 982,000 – failing to offset a decline in wholesale lines, which fell to 539,000 from 584,000. Retail broadband ARPU was up at ILS103 per month, however, from ILS98 in 1Q20. Also of note in the broadband arena, Bezeq confirmed that its in-deployment fibre-to-the-premises (FTTP) network now passes 480,000 households, and reiterated its expectation to surpass one million homes by the end of 2021. Fixed voice lines maintained a downward trend though, declining to 1.630 million at end-March 2021, down from 1.693 million a year earlier.

In the mobile sector, Bezeq’s subsidiary Pelephone saw an uptick in accesses, reporting a customer base of 2.492 million as of 31 March 2021, up from 2.356 million a year earlier, with growth in both post-paid and pre-paid accesses, which stood at 2.030 million (Mar-20: 1.928 million) and 462,000 (Mar-20: 428,000), respectively. Monthly ARPU fell to ILS53, however, from ILS58 in 1Q20, while a churn rate of 5.8% was reported for the first quarter of 2021, compared 7.2% in the opening three months of 2020.