Bezeq Group Reports Resilient Q3 2023 Financial Results Amidst Economic Challenges and Ongoing Conflict

Bezeq Group, a leading Israeli telecommunications company, has released its third-quarter financial results, showcasing resilience in the face of economic challenges and the ongoing "Iron Swords" war. Despite a 1.7% decrease in net profit to approximately NIS 297 million, the adjusted net profit experienced a robust increase of 13.7%, reaching approximately NIS 357 million. This positive trend is consistent with the company's performance throughout the year, with a 9.1% increase in profit over the first nine months, totaling around one billion shekels.

The company's revenues for the third quarter amounted to approximately NIS 2.3 billion, reflecting a marginal increase of 0.1%. The growth was primarily attributed to an uptick in yes revenues, partially offsetting a decline in cell phone connectivity. The nine-month revenue figures reached approximately NIS 6.9 billion, marking a 1.9% increase.

Salary expenses rose by approximately 1.7%, totaling around 478 million shekels. This increase was primarily driven by higher cable speed expenses resulting from salary updates and additional hiring for the fiber project.

Despite a 4.2% decrease in EBITDA, which amounted to approximately NIS 895 million, the adjusted EBITDA witnessed a positive trajectory, reaching approximately NIS 974 million with an adjusted EBITDA rate of approximately 43.0%—reflecting a 2.9% increase.

Addressing the impact of the ongoing conflict, Bezeq Group stated that the "Iron Swords" war currently has no material impact on the company's activities and business results. The company acknowledged the uncertainty surrounding the war's scope and duration and its potential consequences on the Israeli economy.

Other key financial indicators include a net financial debt of approximately NIS 5.01 billion, a slight increase in depreciation and amortization expenses, and a notable rise in other operating expenses due to a one-time provision in Bezeq Kavi.

The free flow for the third quarter saw a significant improvement, amounting to approximately NIS 406 million compared to NIS 30 million in the corresponding quarter. This improvement was attributed to timing differences in the working capital. The first nine months of 2023 recorded a 3.1% increase in free flow, totaling approximately NIS 989 million.

Gil Sharon, Chairman of Bezeq, highlighted the company's strength and strategic positioning during this challenging period. Sharon announced his intention to retire in the coming months, expressing confidence in the growth strategy implemented during his tenure.

Tobi Fishbein, CFO of the Bezeq Group, emphasized the strong operational performance and financial stability of the company. Fishbein stated that, despite the war, the group continues to provide essential communication services, with no material impact on business results. The company's liquidity and financial condition enable it to navigate the challenges in the Israeli and global economy effectively.

In summary, Bezeq Group's Q3 2023 results reflect a resilient performance amid economic uncertainties and conflict, with positive trends in adjusted net profit, revenues, and free flow. The company remains committed to its long-term vision and strategic investments in infrastructure and services.