March 21, 2018 / 7:29 AM / a year ago

Bezeq Israel Telecom warns on 2017 profit

JERUSALEM, March 21 (Reuters) - Bezeq Israel Telecom on Wednesday lowered its profit estimate for 2017, citing a lower valuation for its satellite TV business.

Bezeq, Israel’s largest telecoms group, said it expects 2017 net profit of about 1.2 billion shekels ($345.2 million), down from a prior estimate of 1.4 billion and flat compared with 2016’s level.

It also reduced its 2017 EBITDA (earnings before interest, tax, depreciation and amortisation) forecast to 3.8 billion shekels from 4.0 billion and raised its estimate for free cash flow to 2.1 billion shekels from 2.0 billion.

Bezeq is set to issue fourth-quarter and 2017 financial results next week.

An external audit found that the value of satellite television business YES was lower than the company’s books, Bezeq said.

The profit warning comes two days after CEO Stella Handler said she would resign on July 1 amid a police investigation.

Handler was arrested last month in connection with an investigation into allegations that included fraud, bribery and securities offences. She was released from police custody but a court ordered her to stay away from Bezeq for 30 days.

Along with Handler, Bezeq’s controlling shareholder and former chairman Shaul Elovitch and a number of other officials connected to Bezeq were arrested. They all deny any wrongdoing.

Elovitch, a family friend of Prime Minister Benjamin Netanyahu, controls Bezeq through the indebted Eurocom holding group, which is expected to be sold.

$1 = 3.4762 shekels Reporting by Steven Scheer, editing by Louise Heavens

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