March 19, 2020 / 11:01 AM / 16 days ago

Bezeq Israel Telecom fourth-quarter loss narrows, holding off on 2020 outlook

TEL AVIV (Reuters) - Bezeq Israel Telecom (BEZQ.TA) reported a sharply narrower net loss in the fourth quarter versus a year earlier on Thursday and said it was unable to publish a 2020 outlook due to uncertainty surrounding the coronavirus outbreak.

FILE PHOTO: The logo of Bezeq Israeli Telecommunication Corp Ltd, the country's largest telecom group, is seen outside their headquarters in Tel Aviv, Israel June 21, 2017. REUTERS/Amir Cohen

“The company ... will consider, depending on the situation, the possibility of publishing a forecast for 2020, together with the publication of the results for the first quarter of 2020, if feasible,” Bezeq said. That would be as early as May.

Bezeq, Israel’s largest telecoms group, recorded a quarterly net loss of 5 million shekels ($1.3 million) compared with a 1.76 billion shekel loss a year earlier and analysts’ expectations in a Reuters poll of a 17 million shekel profit.

Revenue slipped 5.3% to 2.22 billion shekels.

Bezeq said this week connections to the Internet for new clients have jumped 64% since the start of the outbreak as people study and work from home.

Bezeq was hurt in 2019 by large writedowns in its subsidiaries for a second straight year, although the amount of 1.05 billion shekels was below a 2018 level of 1.675 billion. Most of the impairment was from its mobile phone unit Pelephone.

Chairman Shlomo Rodav said efficiency measures led to a 3% reduction in Bezeq’s salary expenses and that 1,000 jobs will be lost in the next two years.

“We are moving forward with the synergy and collaboration processes among the subsidiaries in order to maximize their business potential,” he said.

Shares of Bezeq were up 0.7% at midday in Tel Aviv, and were down 22% so far this year.

“We see current valuation as a good entry point to a multi-year turnaround story and today’s set of results does not change our view,” said Barclays analyst Tavy Rosner, who upgraded his outlook on Bezeq to “overweight” from “equal weight”.

Searchlight Capital Partners in late 2019 bought a controlling share in Bezeq, which owns Pelephone, satellite TV firm YES and internet service provider Bezeq International.

Pelephone, Israel’s third-largest mobile operator, posted a fourth quarter loss of 69 million shekels versus a 2 million shekel profit a year earlier, although its subscriber base rose to 2.336 million from 2.31 million at the end of September.

Reporting by Steven Scheer; Editing by Tova Cohen and Emelia Sithole-Matarise

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