Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) today reaffirmed its guidance for 2013, after reporting lower revenue and profits for the fourth quarter and full year of 2012. The company will distribute a dividend of NIS 861 million, part of the NIS 3 billion dividend approved in January 2011.
Full year revenue fell 10% to NIS 10.28 billion from NIS 11.37 billion in 2011, and net profit fell 10% to NIS 1.86 billion (NIS 0.68 per share) from NIS 2.07 billion. Fourth quarter revenue fell 7.6% to NIS 2.45 billion from NIS 2.65 billion for the corresponding quarter of 2011, and net profit fell 1% to NIS 519 million (NIS 0.19 per share) from NIS 524 million.
Bezeq attributed most of the decline to its mobile operations, through Pelephone Communications Ltd., including lower mobile phone sales and mobile services. Bezeq also reported a drop in the number of telephony lines during the year.
In its guidance for 2013, published last week, Bezeq predicts a net profit of NIS 1.7-1.8 billion, earnings before interest, taxes, depreciation and amortization (EBITDA) of NIS 4.25-4.35 billion, and free cash flow over NIS 2.7 billion. The company said that the guidance does not include the possible impact of the costs of a 4G frequency tender (LTE) for a cellular network, if such an auction is held, and added that it would continue streamlining.
Cash flow from operations rose 26% to NIS 4.01 billion in 2012 from NIS 3.18 billion in 2011, and free cash flow rose 79% to NIS 2.78 billion from NIS 1.55 billion.
Full-year telephony revenue was flat NIS 4.63 billion in 2012, and Internet services revenue rose 6.8% to NIS 1.17 billion in 2012 from NIS 1.09 billion in 2011. The number of telephone lines fell 4.2% during 2012 to 2.27 million, and average revenue per user (ARPU) from telephony fell to NIS 73 per month in 2012 from NIS 76 in 2011
Bezeq reported a five-year high in the number of net new Internet subscribers in 2012, 58,000 subscribers, to 1.17 million at the end of the year. ARPU from broadband Internet services edged up from NIS 80 per month in 2011 to NIS 81 in 2012, and Bezeq boosted the average broadband speed per customer by 43% to 9.6 Mbps in 2012.
Bezeq chairman Shaul Elovitch said, "I foresee that the reform of the wholesale market, together with the cancellation of structural separation, will benefit the consumer in terms of delivering the most advanced integration of communications services at attractively valued price points. Concurrently, communications companies will be able to profit from the wholesale market, thanks to streamlining processes and the creation of synergy among the various operations. Our strategy is to lead in all fields in which we operate, by providing excellent service and the most advanced infrastructures. To do this, we recently completed deployment of our NGN network and are now deploying optical lines to customer premises and residential buildings (FTTB/H)."
Bezeq deputy CEO and CFO David Mizrahi said, "Despite intensified competition, the moderate erosion in profitability was partially mitigated by our success in instituting streamlining processes across the group. Against a background of the changes undergone within the communications market during the past year, the strength and balance provided by our portfolio of companies highlights our position as the leading communications provider in Israel."
Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2013
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