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Bezeq profit rises despite Israel-Hamas conflict

Bezeq Israel Telecom said on Wednesday it expects to start adding revenue and profit later this year from its entry into the domestic electricity market.

Israel’s largest telecoms group reported it earned an adjusted 296 million shekels ($81 million) the fourth quarter of 2023, up 18.4% from a year earlier, with revenue down 0.6% to 2.23 billion shekels.

Chairman Tomer Raved said the war with Hamas militants that broke out on Oct. 7 has had “marginal” impact on the results.

Bezeq in January said it would enter the electricity supply sector as the country opened the market for new competition. It signed a deal with Generation Capital to supply electricity, aiming to serve 400,000 households and tens of thousands of businesses by the end of 2030.

“In the next few years, revenue and profit from this new business will contribute to our success and results,” CEO Ran Guron, who is stepping down this month and will be succeeded by Nir David in April, told a news conference.

Bezeq will launch the plan in the first half of this year, company officials told reporters.

Israel has been reforming its electricity sector, which for decades was run solely by state-owned Israel Electric Corp, and opening the different segments, from power generation to supply, to new competition.

“There is a big opportunity to take some market share from the IEC,” said chief financial officer Tobi Fischbein, noting the new business promised “good profits with very low risk and low investment.”

A handful of other companies including rival telcos Partner, Cellcom and Patrick Drahi-owned HOT have also said they planned to supply electricity.

Bezeq said it would pay a dividend of 374 million shekels, boosting its payout to 70% of semi-annual net profit from 60%.

For 2024, Bezeq projected adjusted net profit of 1.2 billion shekels, down from 1.33 billion in 2023. It forecast adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of 3.8 billion shekels in 2024, roughly in line with the 2023 result. It expects to expand to 2.5 million fibre optic lines by year end from 2.07 million.

Profit at mobile unit Pelephone fell 26% to 26 million shekels, while the number of subscribers was flat at 2.618 million. Reuters

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