March 6, 2014 / 7:50 AM / 4 years ago

Bezeq Israel Telecom Q4 profit slides, misses estimates

JERUSALEM, March 6 (Reuters) - Bezeq Israel Telecom reported a 33 percent drop in quarterly profit that missed estimates, weighed down by competition that lowered telecom prices to consumers.

Bezeq, Israel’s largest telecoms group, said on Thursday it earned 352 million shekels ($101 million) in the fourth quarter, down from 522 million a year earlier. Revenue slipped 1.6 percent to 2.41 billion.

It was forecast to earn 401 million shekels on revenue of 2.35 billion, according to a Reuters poll.

Bezeq’s profit was also hit by a provision for employee retirement at its fixed-line unit, while its mobile phone subsidiary Pelephone recorded a one-time expense due to the implementation of an agreement with its labour union.

Pelephone and its two main competitors are grappling with a price war following a shake-up of Israel’s mobile phone industry in 2012 that ushered in six new operators. Competition has also been fierce for Internet services.

For 2014, Bezeq forecast net profit of 1.6-1.7 billion shekels, earnings before interest, taxes, depreciation and amortisation of around 4 billion shekels, and free cash flow of more than 2.5 billion shekels.

In 2013, net profit fell 4.8 percent to 1.77 billion shekels, while EBITDA slipped 7.8 percent to 4.13 billion.

Bezeq declared a dividend of 802 million shekels, or 0.29 shekel a share, for the second half of 2013, down from 969 million in the first half of the year.

$1 = 3.4870 Israeli shekels Reporting by Steven Scheer

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