HOT: Profit Jump Before Mobile Sale Is an Illusion

HOT's Israeli operations are showing an interesting quarter. According to reports from the parent company, Altice International, controlled by Patrick Drahi, adjusted EBITDA in Israel rose in the first half of 2026 to 166.2 million euros, compared to 156 million euros in the same period last year — an increase of about 6.5% just ahead of the HOT Mobile sale. However, behind this jump hides a significant caveat: in local currency terms, profitability in Israel actually fell by 3.9%.

This gap stems from the strengthening of the shekel. On a year-to-date basis, the average exchange rate of the shekel strengthened by 9.8% against the euro. When translating shekel revenues and profits into euros — Altice's reporting currency — the numbers swell even when activity on the ground is stagnant or shrinking.

Exactly the same dynamic applies to revenues. In Israel, they amounted to 551.3 million euros for the half-year, compared to 518 million euros last year — but in local currency, this represents a decrease of 4%.

Within the Israeli operations, trends are contradictory. Fixed-line services — the core of HOT's activity — grew by 2.2% in local currency, mainly thanks to energy products (electricity supply), while price competition in the fixed-line core itself remains strong.

Private mobile revenues, on the other hand, plummeted by 13.2% in local currency — a decline attributed mainly to the separation from connectivity revenues. Business services fell by 10.1% in local currency, mainly due to a drop in revenues from construction works — the same unusual growth engine of fiber projects against IBC, which has weakened since the sale of IBC in 2025.

In other words, real growth comes from selling electricity, a business with relatively low profitability. This activity increases revenues but erodes margins, and therefore it does not really cure the core erosion.

Although operating EBITDA was eroded in local currency, the operating free cash flow of the activity in Israel improved dramatically: from a deficit of 16.8 million euros in the first half of 2025 to a slight positive flow of 1.5 million euros this year.

The explanation lies in investments. Capex in Israel fell by 14.1% in local currency, mainly due to a reduction in investment in the acquisition of rights of use (IRU) in the IBC fiber network and fewer installation and infrastructure works.

That is, even when operating profit is sluggish, HOT generates more free cash simply because it invests less.

Above all stands the deal to sell all of HOT Mobile to a consortium of Delek Israel, Keystone, and Leumi Partners for 1.22 billion shekels in cash. On August 5, approval from the Competition Authority was received, and mainly approval from the Ministry of Communications remains.

Classifying the activity as "held for sale" required Altice to record a one-time accounting write-down of 88 million euros — a record that weighs on the profit line but does not reflect current operational deterioration.

What does this mean for the Israeli reader? If and when the mobile deal is completed — and the market is already talking about a possible sale of the television activity as well — what will remain of HOT will be reduced mainly to the fiber network and internet packages.

For mobile customers, this may change the competition map. For those who follow the market, this is a case study of how the debt pressures of the Altice group — whose net financial debt stood at about 8.9 billion euros at the end of June — are reshaping a key Israeli communication asset.