November 30, 2017 / 7:50 AM / a year ago

Israel's Bezeq Telecom Q3 profit, revenue fall

JERUSALEM, Nov 30 (Reuters) - Bezeq Israel Telecom reported an 18.3 percent drop in third quarter net profit on Thursday as revenue from telephone services continued to decline and tax expenses rose.

Israel’s largest telecoms group reported a profit of 322 million shekels ($92 million), down from 394 million a year earlier.

Revenue slipped 3.8 percent to 2.42 billion shekels, with telephony revenue down 8 percent while high-speed Internet revenue grew 3.5 percent.

Bezeq was forecast to earn 346 million shekels on revenue of 2.43 billion, a Reuters poll of analysts showed.

The company, which is facing regulatory uncertainty over a plan to merge its units, reiterated its 2017 net profit estimate of 1.4 billion shekels, up from 1.24 billion in 2016.

Bezeq is also battling legal troubles. Controlling shareholder Shaul Elovitch, CEO Stella Handler and other executives have been investigated by the Israel Securities Authority (ISA) for alleged fraud.

The ISA said this month it had found enough evidence to support bringing criminal charges against senior officials at the company.

Elovitch, who was forced to step down as Bezeq’s chairman, and the other officials have all denied any wrongdoing.

In Bezeq’s fixed-line segment net profit dropped 19.5 percent to 276 million shekels.

Its Pelephone unit, Israel’s third-largest mobile operator which faces stiff competition, saw a 25 percent decline in profit to 24 million shekels. Its subscriber base grew to 2.475 million from 2.348 million a year earlier.

$1 = 3.5020 shekels Reporting by Tova Cohen; editing by Ari Rabinovitch and Jason Neely

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