May 8, 2014 / 10:27 AM / in 4 years

Israel's Bezeq seen raising 2014 dividend in wake of Yad2 sale

JERUSALEM, May 8 (Reuters) - Bezeq Israel Telecom will likely pay a dividend of around 1.3 billion shekels ($377.5 million) for the first half of 2014 as a result of the sale of its Yad2 classified ads website, a source close to Bezeq said on Thursday.

Bezeq subsidiary Walla Communications earlier this week agreed to sell Yad2 to Germany’s Axel Springer Digital Classifieds for 788 million shekels in a deal that could reach 806 million.

Bezeq, Israel’s largest telecoms group, will reap a 560 million shekel pre-tax profit and analysts believe the post-tax gain will be about 420 million shekels, a figure dependent on the tax rate.

Walla has already indicated most of the profit will given to Bezeq in the form of a dividend, while some of the funds will be invested in expanding its video and news content.

Bezeq is expected to post net income in 2014 of some 1.7 billion shekels. Since it has a policy of distributing 100 percent of its annual profit in two stages, dividends of 850 million shekels were expected after first-half results in September and early in 2015 following second-half earnings.

Adding a post-tax gain of 420 million shekels would result in a first-half dividend of close to 1.3 billion shekels.

Bezeq declined to comment and the company’s board has yet to decide but a source close to Bezeq said such a figure was probable, depending on how much Walla opts to keep.

“Walla has to decide what to do with the profit,” the source said. “But we can assume most of the profit will go to Bezeq as a dividend.”

Citi analyst Michael Klahr said that in per share terms, the Yad2 deal will boost Bezeq’s dividend by 0.15 shekel a share to 0.75 shekel a share for the full financial year.

Axel Springer Digital Classifieds is a joint venture 70 percent owned by German media company Axel Springer and 30 percent by the General Atlantic fund.

$1 = 3.4434 Israeli Shekels Reporting by Steven Scheer; Editing by Crispian Balmer and Mark Potter

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below