Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) today published its financial statements for the fourth quarter of 2015 and the full year. As "Globes" reported this week, the company, managed by CEO Stella Handler and controlled by chairman Shaul Elovitz, posted a NIS 1.72 billion net profit for 2015, down 18%, compared with 2014, on NIS 10 billion in revenue, a 10% increase over the preceding year.
Bezeq earned a NIS 369 million net profit in the fourth quarter, 11% less than in the fourth quarter of the preceding year, on NIS 2.61 billion in revenue, 15.2% more than in the corresponding quarter in 2014.
Bezeq attributed it increase in revenue in the fourth quarter to consolidation of NIS 1.33 billion in revenue from DBS Satellite Services (1998) Ltd. (YES), starting in the second quarter of 2015, including NIS 449 million in the fourth quarter, in addition to higher revenue for Bezeq's landline business and Bezeq International Ltd.. This increase was moderated by a loss of revenue by Pelephone Communications Ltd., Bezeq's mobile subsidiary.
The cost of Handler's salary was NIS 4.4 million, and Elovitz received NIS 5.524 billion in management fees for Eurocom Group.
Bezeq also announced that it would distribute a NIS 776 million dividend to its shareholders, subject to approval from a shareholders' meeting summoned for May 3, 2016.
Bezeq's earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled NIS 4.25 billion in 2015, down 5.6% compared with 2014. Free cash flow slid 18% to NIS 2.26 billion. Bezeq expects its EBITDA to total NIS 4.2 billion in 2016, with NIS 2 billion in free cash flow.
In a breakdown by divisions, Bezeq's landline business accounted for NIS 4.4 billion in revenue, compared with NIS 4.3 billion in 2014. Revenue from its cellular division (Pelephone) continued its decline, amounting to NIS 2.9 billion in 2015, 15% less than in 2014. Telephony revenues dipped 5% to NIS 1.6 billion, while revenue from Internet services jumped 10% to NIS 1.5 billion.
Bezeq's mobile phone unit Pelephone Communications Ltd. saw revenue fall 15% in the fourth quarter to NIS 713 million, while net profit fell 81% to NIS 11 million. Net profit for all of 2015 was down 81% to NIS 11 million.
Handler: Wholesale market is successful
Handler said, “2015 was characterized by structural changes in market competition, most notably the opening of the wholesale market in which we made our fixed-line infrastructure available to other service providers. The success of this initiative is reflected in the number of subscribers, which reached 244,000 by the end of 2015. Despite increasing competition and its impact on our core revenues, our focus on new operations has started to generate additional revenue streams. In 2016, we will expand in new market segments, such as cyber, e-commerce, smart cities and telemedicine.”
Handler added, “We started field trials with the G.fast technology as well as with fiber-optic technologies that can reach ultra-fast speeds of hundreds of Mbps and even up to 1 Gbps. As a first step, we are reviewing Internet speeds of 500 Mbps to household subscribers. These field trials will help us determine the amount of investment needed to operate the network efficiently. In addition, at the end of 2015, our fiber optics network reached approximately 1.3 million households in Israel.”
Elovitz said, “Bezeq’s 2015 financial results show another leap forward in the Group’s high level of investments. Last year our primary efforts were marked by massive investments in our telecommunications infrastructure as well as in improved service and quality, in keeping with our strategy to maintain and strengthen the Group's market leadership position. These investments comprise the foundation of our commercial innovation, product quality, and uncompromising excellence in our customer service.”
Published by Globes [online], Israel business news - www.globes-online.com - on March 17, 2016
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