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Stocks Buzz: Internet Gold – Golden Lines Ltd. (NasdaqGM: IGLD; TASE: IGLD)

Internet Gold – Golden Lines Ltd. (NasdaqGM: IGLD; TASE: IGLD) recently stated its financial results for the 1st- quarter of 2017. Internet Gold holds the controlling interest in B Communications Ltd. (Nasdaq: BCOM; TASE: BCOM), which in turn holds the controlling interest in Bezeq, The Israel Telecommunication Corporation Ltd. (TASE: BEZQ).

“We are very glad with the results of both B Communications and Bezeq, which continues to generate a steady return that improves our overall financial position and capabilities,” said Doron Turgeman, CEO of Internet Gold.

Debt and Liquidity Balances: As of March 31, 2017, Internet Gold’s unmerged liquidity balances comprised of cash and cash equivalents and short term investments totaled NIS 219.00M ($60.00M), its unmerged total debt was NIS 798.00M ($220.00M) and its unmerged net debt was NIS 579.00M ($160.00M).

Internet Gold’s 1st- Quarter Merged Financial Results:

  • Internet Gold’s merged revenues for the 1st- quarter of 2017 totaled NIS 2.50B ($675.00M), a 4.10 percent reduce contrast to the NIS 2.60B stated in the 1st- quarter of 2016. For both the present and the prior-year periods, Internet Gold’s merged revenues consisted entirely of Bezeq’s revenues.
  • Internet Gold’s merged operating profit for the 1st- quarter of 2016 totaled NIS 460.00M ($127.00M), a 2.50 percent reduce contrast with NIS 472.00M declared in the 1st- quarter of 2016.
  • Internet Gold’s merged net profit for the 1st- quarter of 2017 totaled NIS 224.00M ($62.00M), a 56.60 percent increase contrast with NIS 143.00M stated in the 1st- quarter of 2016. The boost in net profit in the 1st- quarter of 2017 was mainly because of B Communications’ lower net financial costs resulted from the refinance of its debt in the 3rd– quarter of 2016.

Internet Gold’s 1st- Quarter Unmerged Financial Results:

  • As of March 31, 2017, Internet Gold held about 65.00 percent of B Communications’ outstanding shares. Accordingly, Internet Gold’s interest in B Communications’ net profit for the 1st- quarter of 2017 totaled NIS 25.00M ($7.00M) contrast with a net loss of NIS 15.00M in the 1st- quarter of 2016.
  • Internet Gold’s unmerged net financial costs for the 1st- quarter of 2017 totaled NIS 14.00M ($4.00M) contrast with NIS 15.00M in the 1st- quarter of 2016. These costs consist of NIS 12.00M ($3.00M) of interest and CPI linkage expenses related to Internet Gold’s publicly-traded debentures and of NIS 2.00M ($1.00M) of financial costs generated by short term investments.
  • Internet Gold’s net profit attributable to investors for the 1st- quarter of 2017 totaled NIS 10.00M ($3.00M) contrast with a loss attributable to investors of NIS 32.0.0M in the 1st- quarter of 2016. The net profit in the 1st- quarter of 2017 was mainly because of B Communications’ lower net financial costs resulting from the refinance of its debt in the 3rd– quarter of 2016.
  • Revenues of the Bezeq Group in the 1st- quarter of 2017 were NIS 2.450B ($675.00M) contrast to NIS 2.560B in the corresponding quarter of 2016, a diminish of 4.10 percent. The diminish was because of lower revenues in all of the Bezeq Group segments.
  • Salary costs of the Bezeq Group in the 1st- quarter of 2017 were NIS 504.00M ($139.00M) contrast to NIS 513.00M in the corresponding quarter of 2016, a reduce of 1.80 percent.
  • Operating costs of the Bezeq Group in the 1st- quarter of 2017 were NIS 959.00M ($264.00M) contrast to NIS 1.020 billion in the corresponding quarter of 2016, a reduce of 5.80 percent. The diminish was mainly because of a decrease in costs in all of the Bezeq Group segments, mainly at Pelephone and was influenced by the early adoption of accounting standard IFRS 15 whereby dealer commissions are capitalized.
  • Other operating income, net of the Bezeq Group in the 1st- quarter of 2017 amounted to NIS 4.00M ($1.00M) contrast to other operating costs, net of NIS 5.00M in the corresponding quarter of 2016. Other operating income, net was influenced by the collective labor agreement at Bezeq International in the corresponding quarter of 2016 in addition to the decrease in capital gains from the sale of fixed assets at Bezeq Fixed-Line in the 1st- quarter of 2017.
  • Depreciation and amortization costs of the Bezeq Group in the 1st- quarter of 2017 were NIS 428.00M ($118.00M) contrast to NIS 449.00M in the corresponding quarter of 2016, a reduce of 4.70 percent. The decrease was because of a lessening in depreciation and amortization costs at Pelephone because of the termination of depreciation of the CDMA network in addition to other assets.
  • Operating profit of the Bezeq Group in the 1st- quarter of 2017 was NIS 566.00M ($156.00M) contrast to NIS 574.00M in the corresponding quarter of 2016, a diminish of 1.40 percent.
  • Financing expenses, net of the Bezeq Group in the 1st- quarter of 2017 amounted to NIS 101.00M ($28.00M) contrast to NIS 102.00M in the corresponding quarter of 2016, a diminish of 1.00 percent.
  • Tax costs of the Bezeq Group in the 1st- quarter of 2017 were NIS 113.00M ($31.00M) contrast to NIS 183.00M in the corresponding quarter of 2016, a reduce of 38.30 percent. The diminish in tax expenses was because of a reduction in the tax asset and the recognition of deferred tax costs in the corresponding quarter of 2016 in the amount of NIS 64.00M resulting from a diminish in corporate tax rates in Israel from 26.50 percent to 25.00 percent.
  • Net profit of the Bezeq Group in the 1st- quarter of 2017 was NIS 350.00M ($96.00M) contrast to NIS 288.00M in the corresponding quarter of 2016, a boost of 21.50 percent. The increase in net profit was mainly because of the aforementioned decrease in tax expenses.
  • EBITDA of the Bezeq Group in the 1st- quarter of 2017 was NIS 994.00M ($274.00M) (EBITDA margin of 40.50 percent) contrast to NIS 1.0230 billion (EBITDA margin of 40.00 percent) in the corresponding quarter of 2015, a reduce of 2.80 percent.
  • Cash flow from operating activities of the Bezeq Group in the 1st- quarter of 2017 was NIS 826.00M ($227.00M) contrast to NIS 922.00M in the corresponding quarter of 2016, a diminish of 10.40 percent. The reduce was mainly because of changes in working capital.
  • Payments for investments (Capex) of the Bezeq Group in the 1st- quarter of 2017 was NIS 380.00M ($105.00M) contrast to NIS 345.00M in the corresponding quarter of 2016, a boost of 10.10 percent.
  • Free cash flow of the Bezeq Group in the 1st- quarter of 2017 was NIS 456.00M ($126.00M) contrast to NIS 619.00M in the corresponding quarter of 2016, a reduce of 26.30 percent.
  • Total debt of the Bezeq Group as of March 31, 2017 was NIS 10.70B ($2.90B) contrast to NIS 10.60B as of March 31, 2016.
  • Net debt of the Bezeq Group was NIS 9.330B ($2.570B) as of March 31, 2017 contrast to NIS 8.830B as of March 31, 2016.
  • Net debt to EBITDA (trailing twelve months) ratio of the Bezeq Group as of March 31, 2017, was 2.320, contrast to 2.040 as of March 31, 2016.

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