Bezeq The Israel Telecommunication (BEZQ) Q2 2022 earnings summary

Executive summary

• Q2 revenue rose 1.1% YoY to NIS 2.225bn; reported net profit was NIS 307m and adjusted net profit NIS 310m.

• H1 revenue grew 1.3% to NIS 4.480bn; reported net profit fell 16.1% to NIS 589m, while adjusted net profit rose 4.8% to NIS 632m.

• Fiber adoption, roaming recovery and 5G plans supported growth; H1 free cash flow reached NIS 929m, up 127.7% YoY.

Financial highlights

• Q2 adjusted EBITDA was NIS 924m, down 2.1% YoY; reported EBITDA was NIS 921m, down 1.4%.

• H1 adjusted EBITDA rose 1.1% to NIS 1.882bn; operating profit was NIS 923m, down 12.5% YoY.

• Q2 free cash flow was NIS 359m; H1 operating cash flow rose 52.1% to NIS 1.968bn.

• Adjusted EBITDA margin was 41.5% in Q2 and 42% in H1.

Outlook and guidance

• FY2022 adjusted EBITDA guidance increased to NIS 3.65–3.75bn from NIS 3.6–3.7bn; adjusted net profit guidance rose to NIS 1.1–1.2bn from NIS 1.0–1.1bn.

• FY2022 CapEx guidance remained NIS 1.7–1.8bn; the fiber deployment target rose to 1.5m households from 1.4m.

• Guidance is subject to competition, regulation, economic conditions, execution, technology changes and other risks.