Bezeq The Israeli Telecommunication Corp Ltd (BZQIF) Q2 2024 Earnings Call Highlights: Strong ...

GuruFocus News
4 min read

In This Article:

  • Fiber Take-Up Growth: 64% year-over-year increase.

  • 5G Subscriber Plans: 28% increase, reaching 1.2 million subscribers.

  • Retail Broadband ARPU: Increased by 6% to ILS129.

  • Dividend Distribution: ILS407 million, a 4% increase compared to the corresponding quarter.

  • Free Cash Flow Growth: 11% increase for the first half of the year.

  • Core Revenue Decline: 0.9% decrease due to lower infrastructure and roaming revenues.

  • Net Debt: Decreased by ILS400 million, or 7%, to ILS5 billion.

  • Fixed-Line Core Revenue: Decreased by 1.8%.

  • Operating Expenses: Decreased by 5.1% due to lower sub-contractor expenses.

  • Pelephone Revenue Growth: Total revenues rose by 1.2%, adjusted EBITDA increased by 2.1%.

  • yes IP-Based TV Subscribers: Increased by 18.4%, with 80% of subscribers using IP.

  • Bezeq International Adjusted Net Profit: Increased to ILS19 million from ILS13 million in Q2 of last year.

Release Date: August 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Bezeq The Israeli Telecommunication Corp Ltd (BZQIF) reported a 64% year-over-year increase in fiber take-up, indicating strong growth in this strategic area.

  • The company saw a 28% increase in 5G subscriber plans, reflecting successful expansion in mobile services.

  • Retail broadband ARPU increased by 6%, demonstrating improved revenue per user in the broadband segment.

  • The board recommended a dividend distribution of ILS407 million, a 4% increase compared to the corresponding quarter, aligning with the company's 70% payout policy.

  • Free cash flow grew by 11% in the first half of the year, showcasing strong cash generation capabilities.

Negative Points

  • Core revenues declined by 0.9% due to lower infrastructure project revenues and decreased roaming revenues impacted by the conflict.

  • Profitability was negatively affected by the MOC telephony reform and timing of infrastructure projects.

  • The company experienced a decrease in net debt by ILS400 million, or 7% year-over-year, indicating financial pressure.

  • The Fixed-Line segment saw a 1.8% decrease in core revenues due to lower infrastructure project revenues.

  • The TV market faced increased competition, impacting revenues and profitability, particularly in the yes segment.

Q & A Highlights

Q: Can you provide insights into the decline in retail subscribers and fiber connections in the Fixed segment? Is this a trend we should expect to continue? A: The decline in retail subscribers is in line with expectations, and while retail subs are slightly less on the Bezeq side, yes is experiencing strong growth. The wholesale market saw a slower pace this quarter, but we expect continued growth as more players use our infrastructure. The fiber rollout targets 90% of the market, excluding areas covered by the Universal Fund.

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