News
Israeli operator cuts profit expectations following reduction in value of Yes TV operation as chief exec steps down
Bezeq on Wednesday lowered its net profit forecast for the full year, just days after its embattled chief executive resigned her position.
In a stock exchange announcement, the Israeli telecoms operator said it will post a net profit attributable to shareholders of 1.2 billion shekels (€280 million) for the 2017 financial year after an external audit lowered the valuation of its satellite TV business.
It also reduced its EBITDA outlook to ILS3.8 billion and said free cash flow would come in at ILS2.1 billion.
According to Reuters, the firm had previously targeted ILS1.4 billion in net profit and ILS4 billion in EBITDA, but the new FCF figure represents a slight increase on its earlier forecast.
In 2016 Bezeq posted a net profit of ILS1.24 billion on turnover of just over ILS10 billion.
The profit warning comes after an external appraiser ruled the value of DBS Satellite Services, which offers satellite-based pay TV services under the Yes brand, to be lower than that recorded in Bezeq’s books. The reduction in valuation comes amidst increased competition in the TV market, Bezeq said.
The business is now valued at ILS1.35 billion, it said.
Bezeq is undergoing turbulent times. Its chief executive Stella Handler has been under house arrest for the past few weeks as part of the ongoing corruption investigation that amongst other things is focusing on the links between prime minister Benjamin Netanyahu and Bezeq’s controlling shareholder Shaul Elovitch.
Handler resigned earlier this week, effective on 1 July, after five years in the post, Bezeq announced in a separate filing to the Tel Aviv Stock Exchange.
Yakov Paz is currently serving as Bezeq’s interim chief executive.
For more information on Bezeq’s financial position, see Total Telecom’s upcoming Global 100 report.
