Israel's Bezeq Telecom Q3 profit dips, fibre optics rollout nearly done
Adds details, CEO and CFO comments, share reaction
By Steven Scheer
JERUSALEM, Nov 19 (Reuters) -Bezeq Israel Telecom BEZQ.TA reported on Tuesday a 13% decline in third quarter net profit, as a hit to revenues from the effects of Israel's wars offset strong gains in its core Internet infrastructure business.
Israel's largest telecoms group posted an adjusted net profit of 309 million shekels ($83 million), down from 357 million a year earlier. Revenue slipped 1.4% to 2.23 billion shekels.
Bezeq said that while the war in Gaza that began on Oct. 7, 2023 had not had a meaningful impact on the company as a whole, its units had taken a hit. Mobile unit Pelephone lost an estimated 20 million shekels in the quarter - and has now lost around 50 million so far this year - due to the loss of lucrative roaming revenue as the conflicts kept tourists away.
Revenue at satellite TV unit YES fell 3.4% in the quarter, while its profit dropped 70% to 12 million shekels as the company is not billing those living near the front lines.
Bezeq's bottom line was also impacted by the company setting aside a provision mandated by the state to help fund fibre optics in areas Bezeq does not intend to deploy.
Chief financial officer Tobi Fischbein said these were the difference between a red and black bottom line. "The red is not that big. It's not major. It's not permanent," he told Reuters.
Shares of Tel Aviv-listed Bezeq fell 1.8%, but are up 4.6% so far in 2024.
The firm recorded a 4% gain in core revenue in its fixed line business, largely from Internet as it continued to ramp up deployment of its nationwide fibre optics network.
Bezeq chairman Tomer Raved said the company serves a potential 2.5 million households, in which 31% are customers. A plan to cover 90% of Israel, or as many as 2.8 million homes, will be completed in the next year, he told Reuters.
"That will lead to a significant drop in CAPEX (capital expenditure) in 2026," he said, estimating Bezeq aimed to capture 40% of households.
He also said Bezeq remained on track to post adjusted net profit of 1.2 billion shekels and adjusted core earnings (EBITDA) of 3.8 billion shekels in 2024, and said it was too early to give an outlook for 2025.
($1 = 3.7292 shekels)
Reporting by Steven Scheer. Editing by Jason Neely and Mark Potter
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