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TMCNet: Bezeq profit down 15 percent

[March 15, 2012]

Bezeq profit down 15 percent

Mar 15, 2012 (Globes - McClatchy-Tribune Information Services via COMTEX) -- Telephone company Bezeq Israeli Telecommunication Co. Ltd.'s (TASE: BEZQ) revenue totaled NIS 11.37 billion in 2011, compared with NIS 11.99 billion in 2010, representing a fall of 5.1 percent. The company released its financial statements for the fourth quarter of 2011 today.

Revenue for the fourth quarter totaled NIS 2.65 billion, compared with NIS 3.06 billion for the corresponding quarter of 2010, representing a fall of 13.3 percent. The company says that the decline stems from the cut in inter-connection fees, and greater competition in its markets.

Net profit attributable to Bezeq shareholders fell 15.4 percent to NIS 2.07 billion in 2011 from NIS 2.44 billion in 2010. Fully diluted earnings per share were NIS 0.76, down 15.6 percent.

In the fourth quarter of 2011, Bezeq made a net profit of NIS 524 million, 8.9 percent less than in the corresponding quarter.

Revenue from the company's fixed-line activity was NIS 4.65 billion in 2011, 11.7 percent less than in 2010. The company said its revenue was affected by the substantial cut in inter-connection fees to cellular networks, and that without this cut, its revenue would have fallen just 1 percent. Revenue from fixed-line Internet services passed the NIS 1 billion mark in 2011, totaling NIS 1.09 billion, 11.8 percent more than in 2010.

The company announced that its board had recommended distribution of the entire profit for the second half of 2011, NIS 1.074 billion, as a dividend, subject to approval by the shareholders meeting. The company will also make the third payment on its special dividend, amounting to NIS 500 million. The total distribution is thus NIS 1.574 billion (NIS 0.58 per share). Payment will be on May 21.

Looking ahead, the Bezeq group estimates that its 2012 profit will be similar to that of 2011. It sees an improvement in its free cash flow this year, mainly thanks to an improvement in its working capital and the completion of the NGN high-speed Internet project and the undersea cable.

Bezeq CEO Avi Gabbay said, "2011 was characterized by huge investment in the NGN network, and in the trial in advance of the switch to the giga generation on the Internet. The results reflect the rapid growth in customers' average bandwidth, based on the NGN network. We identify a clear trend of growing use of rich and complex content on the Internet, such as video content. Bezeq is ready for this change, as it continues to provide the consumer with whatever bandwidth he demands." Pelehone: Revenue down 3 percent, profit up 2 percent Pelephone's revenue totaled NIS 5.55 billion in 2011, compared with NIS 5.73 billion in the previous year, representing a 3.2 percent decline. Fourth quarter revenue was NIS 1.24 billion, compared with NIS 1.47 billion in the corresponding quarter of 2010, representing a decline of 15.6 percent.

The mobile carrier subsidiary's net profit grew 2.2 percent in 2011 to NIS 1.06 billion from NIS 1.03 billion in 2010. The net profit for the fourth quarter fell 23.9 percent to NIS 204 million, from NIS 268 million in the corresponding quarter.

At the end of 2011, Pelephone had 2.847 million subscribers, compared with 2.857 million a year earlier. 5,000 net new subscribers were recruited in the fourth quarter.

Bezeq International: Revenue down 2 percent Bezeq International's revenue totaled NIS 1.4 billion in 2011, representing a 1.9 percent decline. The decline was partly offset by growth in sales of the company's Internet services, and continued growth in its ICT solutions activity. Fourth quarter revenue fell 2.5 percent compared with the corresponding quarter to NIS 341 million.

The company's net profit fell 28.3 percent in 2011 to NIS 182 million. The erosion in the net profit figure mainly stems from a one-time profit recognized in 2010. Net profit for the fourth quarter was 4.1 percent lower than in the corresponding period, at NIS 44 million.

Yes: Higher revenue, smaller net loss The revenue of satellite television subsidiary Yes grew 2.3 percent in 2011 to NIS 1.62 billion, compared with NIS 1.58 billion in 2010. The growth mainly stemmed from higher sales of advanced services, but also from growth in the total number of subscribers.

The company's net loss narrowed by 26.8 percent in 2011, to NIS 230 million, compared with NIS 314 million in 2010. It made a net profit in the fourth quarter of NIS 8 million, which compares with a loss of NIS 84 million in the fourth quarter of 2010.

___ (c)2012 the Globes (Tel Aviv, Israel) Visit the Globes (Tel Aviv, Israel) at www.globes.co.il/serveen/globes/nodeview.asp?fid=942 Distributed by MCT Information Services

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