Bezeq The Israeli Telecommunication (BEZQ) Q3 2024 earnings summary

Executive summary

• Core revenues grew 2.1% year-over-year to NIS 2.02 billion, driven by 3.6% growth in Fixed-Line, despite the war's negative impact on roaming revenues.

• Strategic progress included a 50% increase in fiber take-up, 6% rise in retail broadband ARPU, and 25% growth in 5G postpaid subscriber plans.

• Sale of Bezeq Online for NIS 50 million to enhance financial efficiency and focus on core activities.

• Net debt declined by NIS 290 million (5.8%) year-over-year to NIS 4.7 billion, with improved coverage ratio from 1.6x to 1.5x.

• Continued investment in fiber and 5G infrastructure, with 2.5 million homes passed and 781,000 fiber subscribers.

Financial highlights

• Core revenues reached NIS 2.02 billion, up 2.1% year-over-year, while reported revenues were NIS 2.23 billion, down 1.4%.

• Adjusted EBITDA was NIS 915 million (41.0% margin), down 6.1% year-over-year; adjusted net profit was NIS 309 million, down 13.4%.

• Free cash flow for Q3 was NIS 365 million, down 10.1% year-over-year, but exceeded 1 billion ILS for the first nine months.

• CapEx increased 7.4% to NIS 436 million, representing 19.5% of revenues.

• Net debt/Adjusted EBITDA ratio at 1.5x.

Outlook and guidance

• CapEx expected to drop significantly in the second half of next year and into 2026 as fiber and satellite-to-IP migration projects near completion.

• Management reaffirmed commitment to medium-term goals: complete fiber deployment, migrate TV to IP, and grow free cash flow via higher EBITDA and lower CapEx.

• Midterm target remains to increase EBITDA minus CapEx by 400–500 million ILS.

• Dividend payout ratio increased from 60% to 70% in March, with further review planned for next year.

• Mid-term targets include 40% fiber take-up rate and retail ARPU above NIS 140.