(Adds details, comments of CFO / Chairman / Analyst)
By Steven Shire
Bezeq Israel Telecom missed forecasts with a 27% drop in profit in the third quarter, which was hurt by a drop in the net profit of cellular and Internet services, and said it would move ahead with a restructuring plan.
Net profit fell to NIS 234 million ($ 32 million) from $ 322 million a year earlier, according to Reuters.
Revenues fell 4.7% to NIS 2.3 billion, not far from analysts' expectations.
"The results of the quarter reflect the impact of the increasingly competitive environment," said Yale Rutenberg, Chief Financial Officer.
The company reiterated its 2018 forecast for a net profit of NIS 1.0 billion.
Bezeq is being investigated for suspected securities offenses and is in the midst of an organizational disruption.
In August, he said he plans to merge some of its businesses to cut costs. According to the proposal, which still needs regulatory approval, Bezeq will combine the cellular phone, satellite television and Internet services business – Pelephone, YES and Bezeq International. Its business lines, which control the telephone and Internet infrastructures in Israel, will remain separate.
Bezeq said it had not received an answer from the Ministry of Communications about its plan.
The company's chairman, Shlomo Rodav, said that Bezeq had initiated negotiations with trade unions on reducing work on Pele-Phone, Bezeq International and YES.
"We continue to believe that there is significant value to opening up in Bezeq and we believe that the launch of the upcoming strategic plan will help build investor confidence and pave the way for the continued trend of stocks," said Barclays analyst Tibi Rosner. .
Bezeq shares have risen 16.5% since announcing its plan on August 23.
According to Rodav, the company is ready to launch its fiber optic network, but it is discussing with the regulator how to proceed. Bezeq seeks assurances on wholesale pricing and other issues to ensure the profitability of the project.
Pelephone's net profit, the third largest cellular operator in Israel, fell 75% to NIS 6 million, while subscriber base fell to 2,855 million from 2,475 million years ago.
Bezeq, the former Israeli media monopoly, began to face strong competition in 2015 after the government opened the market to smaller rivals offering cheaper but more limited services.
$ 1 = 3.7032 NIS
Reported by Stephen Scheer; Edited by Tova Cohen and Jason