Batelco 9-month profit down 25pc
Manama, October 23, 2012
Bahrain-based Batelco Group, a leading regional telecommunications company, said it registered a net profit of BD43 million ($114 million) for the first nine months of the year, compared to BD57 million during the same period last year, a decline of 25 per cent.
The company said the decline was due to "strong competitive conditions across the region.'
Announcing the results on Tuesday, the telecom group said its gross revenue for the period stood at BD228 million compared to BD245 million during the same period last year.
The operating profit for the nine-months too fell from BD65 million to BD47 million for the corresponding period last year.
In line with ongoing efforts to diversify revenues and maximise investments, the Group continued to see an increasing contribution from overseas markets, said a statement from Batelco.
At the end of the period, 40 per cent of revenues and 38 per cent of EBDITA was attributable to the Group’s operations outside of Bahrain, it added.
The group’s balance sheet remained strong. As of 30 September 2012, there was low debt at BD27 million and substantial cash and bank balances of BD87 million, said the statement.
This includes the impact of the interim dividend (15 fils per share) announced and paid during the quarter as well as significant investments made in overseas operations at the start of the year. Earnings per share for the period stood at 29.6 fils, it added.
Commenting on the results, Batelco chairman Shaikh Hamad Bin Abdulla Al Khalifa, said, "The first nine months continued to be marked by consistently strong cash generation and growing customer numbers across the Group. A number of one-off adjustments resulted in more pronounced decreases than would otherwise have been the case."
"Still, margins are healthy and these one-off charges help position the Group in executing its strategy of revenue enhancement, cost optimisation and achieving scale, the official stated.
Shaikh Hamad said, "The first nine months of the year continued to be marked by consistently strong cash generation and growing customer numbers across the Group. A number of one-off adjustments resulted in more pronounced decreases than would otherwise have been the case."
"Still, margins are healthy and these one-off charges help position the Group in executing its strategy of revenue enhancement, cost optimisation and achieving scale, he added.
The Group, he stated, continues to generate strong cash flows and underlying profits, well in line with the industry, and shareholder returns, which remain among the strongest in the region despite substantial competitive pressures in Bahrain and across the Mena markets.”
Shaikh Hamad said: "Throughout the period, we remain focused on further building the business and our customer base. We’ve made great progress in this regard and are pleased to announce three consecutive quarters of overall subscriber growth, following the announcement of the sale of our stake in India."
We’ve seen a 5 per cent increase since last quarter and an impressive 12 per cent gain in the Group’s subscriber base, when normalised for STel, since Q4 2011. This brings us to 7.4 million users today and growing,” he added.
Group CEO, Shaikh Mohamed bin Isa Al Khalifa said for the nine-month period, the Group’s operating performance remained steady.
“Across the Group, our focus has been on enhancing competitiveness in our home market, Bahrain, and at our subsidiary companies. This has meant both ensuring we remained as innovative as possible in our approach to serving our customers as well as in the manner in which we manage our operations,” said Shaikh Mohamed.
"For us, one strong measure of success has been the growth we have achieved in our subscriber base since the start of the year," the company chief said.
According to him, Batelco Group has witnessed a 12 per cent growth in customer numbers for the nine month period, bringing the telco giant to 7.4 million users across the Group.
"We are especially pleased to have achieved growth during the summer months and Ramadan period, where subscriber renewal and activity has historically been lower," he added.
“In Bahrain, where competition is robust, we have maintained our leadership. Overseas, advancements have also been made," said the top official.
"In Jordan, customer response to the launch of Umniah’s 3.75G services in late June has exceeded expectations. Similarly, Yemen has turned a corner with normalizing conditions in the country and the resulting resumption of growth at the company.”
He said the mobile subscriber numbers grew 4 per cent on a quarter-over-quarter basis but recorded a decline of 5 per cent year over year.
This decrease when compared to the corresponding period in 2011 was largely due to tough and ongoing competition in Bahrain and the rationalization of the customer base in Yemen, which took place in the first quarter of 2012.
However, gains made over the last three quarters reflect positive upward trends in Jordan and Yemen, which are expected to continue, as well as success in Bahrain in protecting market share, including in the high value segment.
Broadband customers too rose 21 per cent quarter over quarter and showed a healthy 31 per cent increase on year-over-year basis and 28 per cent since the start of 2012.
At the end of the third quarter, Batelco maintained a strong 42per cent share of the mobile market. Whilst this reflected a decrease of 9 per cent when compared to the previous year period, the operation witnessed 64per cent year-on-year growth in mobile broadband subscribers, said Shaikh Mohamed.
The growth in mobile broadband subscribers was consistent with previous trends and supported by ongoing services upgrades which continue to make the company’s service faster and more reliable, he added.-TradeArabia News Service