Bezeq The Israeli Telecommunication (BEZQ) Q4 2024 earnings summary

Executive summary

• Core revenues grew 1.3% year-over-year to NIS 7.73 billion, driven by Pelephone and Fixed-Line growth, while reported revenues declined 2.4% to NIS 8.88 billion, reflecting resilience amid challenging conditions.

• Adjusted EBITDA for FY 2024 was NIS 3.72 billion (41.8% margin), with Q4 adjusted EBITDA up 5.9% and adjusted net profit up 23.3% year-over-year, aided by the reversal of a universal fiber fund provision.

• Strategic growth drivers included a 43% increase in fiber take-up, 6% growth in retail broadband ARPU, and 20% growth in 5G postpaid plans.

• Dividend policy upgraded to 80% of net profits, with a recommended distribution of NIS 392 million (14.1 agorot per share), yielding about 5% annually.

• Management transition announced, with a new CFO appointed.

Financial highlights

• Free cash flow for FY 2024 was NIS 1.27 billion, net financial debt decreased by NIS 250 million (4.8%) to NIS 4.95 billion, and net debt/EBITDA ratio improved to 1.5x, the lowest since 2010.

• Dividend payments increased by about 20% per year since 2022; next dividend of NIS 0.14 per share scheduled for May 14, 2025.

• CapEx for FY 2024 was NIS 1.74 billion, up 2.0% year-over-year, with CapEx/Sales at 20%.

• Adjusted EBITDA margin for FY 2024 was 41.8%.

• Net profit for FY 2024 was NIS 1.07 billion, down 9.8% year-over-year; diluted EPS was NIS 0.39, down 9.3%.

Outlook and guidance

• 2025 guidance: adjusted EBITDA of NIS 3.7 billion, adjusted net profit of NIS 1.2 billion, CapEx of NIS 1.75 billion, and fiber deployment to 2.9 million households.

• Midterm targets: 2–3% CAGR in core revenues, at least 2% CAGR in adjusted EBITDA, 43–45% EBITDA margin, and 7–9% CAGR in free cash flow.

• Dividend payout to remain at 80% of net profit, subject to maintaining AA credit rating.

• Fiber deployment target raised to 2.9 million homes in 2025.

• yes ARPU from subscribers targeted at NIS 190–195.