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Latest Bezeq International News
Nov 24, 2022
11/24/2022 | 06:24am EST Message : Wednesday, November 16th, 2022 Event Transcript DISCLAIMER This document includes a transcript of the conference call held on the above date regarding the Company's financial results for the second quarter of 2020, following the publication of the Company's financial statements at that date, as well as the publication of the Company's investor presentation filed under the Israeli Securities Law 1968 ("Securities Law"). This document includes statements made at that conference call and accordingly contains only partial information regarding the Company's financial results and the Company's periodic reports published under the Securities Law. The reports can be accessed at the Israeli Securities Authority's website, www.magna.isa.gov.il . A review of this transcript and/or the aforementioned investor presentation published by the Company is not a substitute for a review of the detailed reports of the Company under the Securities Law and is not meant to replace or qualify the full reports. The Company is not responsible for the accuracy or completeness of the information contained in this document. This transcript does not constitute an offer or invitation to purchase or subscribe for any securities of the Company, and neither this transcript nor anything contained herein shall form the basis of, or be relied upon in connection with any contract or commitment whatsoever. Bezeq Q3 2022 Financial Results Transcript Wednesday, November 16th, 2022 Tobi Fischbein Welcome everyone, and thank you for joining us on Bezeq's 2022 third-quarter earnings call. I am Tobi Fischbein, Bezeq Group CFO. With us from the Bezeq Group's senior management team are Mr. Gil Sharon, Bezeq's Chairman, Mr. Ran Guron, Bezeq's CEO, and Mr. Ilan Sigal, CEO of Pelephone, yes and Bezeq International. Before we start, I would like to draw your attention to the Safe Harbor statement on Slide 2 of our Q3-2022 investor presentation, which also applies to any statement made during today's call. We would like to inform you that this event is being recorded. After presenting our quarterly results, you can ask questions by raising your hand virtually. Let me now turn the call over to our Chairman, Mr. Gil Sharon for his opening remarks. After his introduction, I will continue the presentation of our group financial highlights, followed by Ran, who will discuss Bezeq Fixed Line results, and Ilan, who will conclude with the results of our subsidiaries. Gil Sharon Thank you, Tobi. Let's start on Slide 3. We posted strong financial results in the third quarter of the year, which stand out positively versus the background of the economic turmoil that the world is experiencing, and due to the successful implementation of our growth strategy. We continued to emphasize investment in growth related infrastructure, which are well reflected in our third quarter results. In fixed-line, we had record take up of 51 thousand fiber customers and continued growth in retail broadband ARPU leading to revenue growth of 5% year-over-year. In Pelephone, roaming recovery and continued growth in 5G subscribers contributed to higher ARPU and significant improvements in Pelephone's financial results with a 12% year-over-year increase in revenues. yes launched its TV and Bezeq fiber bundle and we continued to pay down debt and distribute dividends. Moving to the next slide, in the third quarter we saw solid top-line growth coupled by increases in Adjusted EBITDA and Adjusted Net Profit. On the balance sheet, we reduced our net debt by 600 million shekels, or 10% from a year ago, further improving our net debt to EBITDA ratio to 1.7, from 1.9 in the same quarter last year. We have 233 thousand fiber customers as of today and retail broadband Internet ARPU rose 8.4% year-over-year to reach 116 shekels, another increase of 3 shekels versus the previous quarter. Pelephone continued to show significant improvement, marking the sixth consecutive quarter with a year-over-year increase in service revenues. At the end of Q3 2022, we reached a total of 2.68 million subscribers, of which 753 thousand are on 5G plans. For yes, net subscribers grew by 7,500, the best quarterly result since 2014, bringing our total new subscribers since the beginning of the year to over 12 2 Wednesday, November 16th, 2022 thousand. In the third quarter, yes also launched the "triple" bundle to combine TV and Bezeq fiber, allowing it to address new customers, reduce churn and leverage Bezeq's advanced infrastructure to improve customers' experience. We are confident in our ability to maintain good results and stability, while still keeping ESG as a focus throughout our decision-making process. In times of uncertainty in the global economy and capital markets, Bezeq offers investors strong and solid financial performance, spanning wide consumer and business customer bases, with sustainable demand for advanced telecom services, allowing us to generate strong cash flows and shareholder returns supported by our dividend policy. Now, let me turn the call back to Tobi to discuss our detailed financial results. Tobi Fischbein Thank you, Gil. In the next slide, we present the Group's financial highlights for the third quarter of the year. Revenues in the third quarter of 2022 amounted to 2.26 billion shekels, up 5.6% year-over-year. Adjusted EBITDA increased by 1% year-over-year to 947 million shekels. Adjusted net profit rose 6.4% year-over-year to 314 million shekels in Q3, mainly due to lower financing expenses. Free Cash Flow for the quarter was lower due to the impact of timing differences in working capital in all group companies, mainly payment for frequencies, payment of salaries in advance and timing of payments to the universal fund and early retirement. We expect free cash flow to normalize in the coming periods. Turning to the next slide, we experienced stable growth across the board for the nine- month period, with revenues increasing by 2.7% year-over-year to 6.74 billion shekels driven by improvements in Fixed-Line and Pelephone. Adjusted EBITDA rose by 1% year-over-year to 2.83 billion shekels and Adjusted Net Profit increased 5.3% year- over-year to 946 million shekels, both driven by improvements in Pelephone. Free Cash Flow at the end of September 2022 was up 22.2% year-over-year to 959 million shekels. The next slide shows the Group's key operational metrics for the past five quarters. On the Subscribers side, we saw increases in TV, cellular and retail broadband subscribers as fiber take-up offset churn from our copper network. On ARPU, retail broadband Internet grew 8.4% year-over-year, and cellular ARPU increased 5.5% year-over-year. Telephony ARPU was down due to the MOC tariff reduction implemented in Q2 2022. Moving to the next slide, let me again emphasize Bezeq's financial strength and success in debt reduction. As Gil previously said, by the end of Q3 2022 our net debt decreased by 600 million shekels, or 10% year-over-year. 3 Wednesday, November 16th, 2022 Moving on to the next slide - We would like to reaffirm the guidance updates made in Q2 2022. Adjusted EBITDA is expected to be in the range of 3.65 to 3.75 billion shekels, Adjusted Net Profit between 1.1 to 1.2 billion shekels, and Capex is expected to be between 1.7 to 1.8 billion shekels. We expect to reach 1.5 million homes passed with fiber by the end of the year. Now Ran will share with you updates on our Fixed Line operations. Ran Guron Thank you, Tobi. We finished another strong quarter with record fiber connections of 51 thousand for a quarter-over-quarter increase of 32%. The number of homes passed reached 1.48 million with 233 thousand fiber-connected customers as of today. Total revenues increased 5% year-over-year mainly driven by broadband Internet and business sector revenues. We achieved this strong performance despite the impact of the MOC telephony tariff reduction in April 2022. Moving on to the next slide, Adjusted EBITDA was up moderately. Adjusted Net Profit rose by 3.8% year-over-year mainly due to reduced financing expenses. Free Cash Flow was down due to timing differences in working capital. We expect free cash flow to normalize in the coming periods. Moving to the next slide, for the first nine months of the year, Free Cash Flow was up 7.4% year-over-year, driven by timing differences and improved working capital. The following slide shows our achievements in broadband Internet that reached revenues of 452 million shekels for the quarter, representing an 11.1% year-over-year increase. Fiber subscriber ARPU increased significantly by 8.4% year-over-year to reach 116 shekels, and average broadband speed grew by nearly 85% year-over-year, reaching 192 megabytes, which is another record for us. Moving onto fiber optics on the next slide. We continue to deploy fiber nationwide and have increased our focus on customer take-up for a record 51 thousand net adds in Q3. Customers with the Be Router reached 733 thousand by the end of this quarter, approximately 72% of our retail customers. As shown in the next slide, the business sector continues to gain momentum with a 4.8% year-over-year revenue increase in transmission and data, as well as 3.8% year- over-year growth in cloud and digital services. Other revenues grew 33.3% year-over- year to 80 million shekels due to the Blue-Raman submarine cable project with Google, as well as other infrastructure development projects. 4
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Bezeq International Frequently Asked Questions (FAQ)
When was Bezeq International founded?
Bezeq International was founded in 1996.
Where is Bezeq International's headquarters?
Bezeq International's headquarters is located at Shacham st.40, Petach Tikva.
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