Bezeq The Israel Telecommunication (BEZQ) Q4 2022 earnings summary

Executive summary

• FY2022 revenue rose 1.9% to NIS 8.986bn; Adjusted EBITDA increased 0.7% to NIS 3.736bn and Adjusted net profit rose 3.6% to NIS 1.196bn.

• Growth strategy centered on fiber, 5G and IPTV, supported by higher infrastructure investment and lower net debt.

Financial highlights

• FY2022 reported operating profit was NIS 1.637bn, down 12.5%, and reported net profit was NIS 1.000bn, down 15.5%.

• Operating cash flow rose 23.4% to NIS 3.503bn; free cash flow was NIS 1.410bn, with working capital and timing differences supporting cash flow.

• Gross CapEx was NIS 1.713bn; Q4 revenue was NIS 2.244bn, down 0.6%, and Adjusted EBITDA was NIS 907m, down 0.2%.

• Q4 Adjusted net profit was NIS 250m; quarterly profit declined amid higher depreciation and financing expenses.

Outlook and guidance

• 2023 guidance: Adjusted EBITDA of ~NIS 3.8bn, Adjusted net profit of ~NIS 1.2bn and gross CapEx of ~NIS 1.75bn.

• Mid-term ambitions include 1% Adjusted EBITDA growth, 41%–43% margins, mid-single-digit free-cash-flow CAGR and fiber deployment to 2.7m homes passed.

• CapEx and CapEx/sales are expected to remain stable through 2025, then gradually decline; fiber deployment targets 2.0m households in 2023.

• Outlook depends on competition, regulation, economic conditions, technology and market developments; actual results may differ.