Fitch credit rating boost for Batelco
Manama, November 27, 2012
Bahrain's leading telecoms operator Batelco Group has welcomed Fitch's affirmation of company's investment grade credit rating in line with the underlying strength of its strategy, financial position and operating performance.
"We're pleased to announce that Fitch Ratings has affirmed Batelco Group's investment grade credit rating," group chief executive Shaikh Mohamed bin Isa Al Khalifa said.
"Our strong credit quality reflects our ongoing success in maintaining market leadership in Bahrain across all segments, despite strong competitive pressures, as well as the progress we continue to make in our overseas markets, which are steadily growing and enhancing their contributions to the group's top and bottom line.
"The affirmation of our credit quality also underscores the group's strong financial management and the policies we have put in place to achieve cost leadership and to maximise results.
"After another full review of the group's operations and performance, we are pleased with Fitch's assessment of the overall health of our financial position and the strength of our balance sheet," he said.
"Quarter after quarter, we continue to show our ability to maintain sound levels of profitability and to generate significant cash flows.
"As a result, we remain well placed to deliver on our commitments to shareholders and to continue to invest in the expansion of our network and the further diversification of our business in growth markets as we go forth," he added.
The group's long-term foreign currency Issuer Default Rating remains 'BBB-' with a stable outlook.
According to Fitch, the ratings reflect Batelco's market leading position in Bahrain and sound performance across its overseas markets of operations.
This is despite significant competitive pressures at home and other challenges, which have impacted the Middle East and North Africa markets.
These ratings are also indicative of the group's healthy financial position and strong liquidity profile.
Specifically Fitch highlights the group's robust free cash flow (FCF) and pre-dividend FCF generation levels, which put Batelco amongst the strongest of its peers in the Middle East.
Fitch's report also affirms the strength of the group's strategy both in terms of its ability to manage and derive value from its current operations as well as its stated strategy for further building its network and achieving growth in its mobile and broadband operations in complementary overseas markets.
In addition to Fitch's affirmation of the group's credit rating, Standard & Poor's Rating Services similarly affirmed the group's investment grade credit rating in July with a "BBB-" long-term rating and an "A-3" short-term foreign and local currency corporate credit rating.
For the nine-month period ending September 30, the Batelco Group had low debt and substantial cash and bank balance of BD87 million ($231 million).-TradeArabia News Service