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Israel's Internet Gold Q2 profit triples
JERUSALEM, Aug 14 (Reuters) - Israel's Internet Gold (IGLD.TA) reported on Tuesday that second-quarter net income had more than tripled, boosted by its merger with 012 Smile.Communications. Net profit at the Internet service provider rose to 22.5 million shekels ($5.3 million), or 1.06 shekels per share, from 6.8 million, or 0.37 shekel per share a year earlier.
Revenues increased 209 percent to 296.3 million shekels from 95.8 million a year earlier. They were slightly offset by a weaker dollar against the shekel.
On a pro forma basis excluding the contribution of 012 Smile.Communications, Internet Gold (IGLD.O) reported a 12 percent increase in revenues.
"We are pleased to report that the progress on our merger plan continues to be on track, and we are now entering its final stage. However, we expect to realise the full effect of the merger's synergies towards early 2008," Eli Holtzman, chief executive of Internet Gold, said in a statement.
"As we move beyond the merger, our focus will be to continue building our share of our growing communications and media markets," he said.
012 Golden Lines, a fully owned subsidiary of Smile.Communications since the fourth quarter of 2006, in February was the first operator in Israel to receive a permanent license for voice-over-broadband services nationwide.
In May the operator launched services aimed at taking a share in Israel's $1 billion local telephony market by offering far lower rates than currently exist.
012.Smile Communications' revenues for the second quarter increased by 250 percent to reach 277.3 million shekels.
"The merger has taken our revenues and profitability to a new level, while also leveraging our launch of local telephony - voice over broadband," said Stella Handler, chief executive of 012 Smile.Communications in a statement.
For the past two years 012 Golden Lines has operated local voice-over-broadband telephone services on a limited basis under a temporary experimental license and in the second quarter had a subscriber base of about 16,000 households.
Bezeq Israel Telecom (BEZQ.TA), which holds more than 90 percent of the country's fixed-line telephony market, will not be allowed to offer the services until its share of the market falls below 85 percent.
($1 = 4.22 shekels)
