Thursday 13 December 2018

Shaikh Mohammed and Ihab Hinnawi

Batelco Group H1 net profit tops $50m

MANAMA, July 20, 2017

Bahrain-based Batelco Group, a global telecom company with operations across 14 countries, has posted a net profit of BD19 million ($50.4 million) for the first half (H1) of the year.

The net profit was a 16 per cent decline compared to the corresponding period in 2016 and a quarter on quarter decline of 17 per cent over Q2 2016.

However, the net profit is up by 32 per cent compared to Q1 2017 as Q1 results were impacted by the share of loss from the group’s investment in Sabafon, Yemen, due to the continued instability in the region caused by political unrest.

The group’s gross revenues of BD181.1 million ($480.4 million) have remained steady year-on year (YoY) with a slight 1 per cent decline compared to the same period in 2016. The gross revenues for the second quarter of 2017 show a 1 per cent decrease compared to Q2 2016 but an increase of 2 per cent compared to Q1 2017.

EBITDA for the period was BD64.0 million ($169.8 million), a 10 per cent decline year over year, and quarter on quarter decline of 12 per cent compared to Q2 2016. EBITDA for Q2 2017 was in line with that of the previous quarter with only a 2 per cent marginal decline.

The YoY drop in EBITDA is a partly due to increased operating expenses compared to 2016, mainly higher network and IT costs as a result of network enhancements and additional sites across the Group.  Despite the reduction in EBITDA, the Group continues to sustain its robust EBITDA margin of 35 per cent.

The group’s balance sheet remained strong; as of June 30 net assets were BD532.9 million ($1.413 billion) with substantial cash and bank balances of BD157.4 million ($417.5 million). Earnings per share were 11.4 fils and the Board of Directors approved an interim cash dividend for shareholders of 10 fils per share for the six month period.

Batelco chairman Shaikh Mohamed bin Khalifa Al Khalifa said that Batelco Group continues to be immersed in a lengthy period of harsh competitive pressure and the impact of this is reflected in the Group’s financial results.

“This operating environment is due to circumstances in the telecom industry, not just in Bahrain, but across the geographies in which we operate. However, our strategy is evolving so that we are prepared to meet the ongoing changes in the industry. We are investing in restructuring and training to ensure we have the right mix of skills and expertise across our management and general staff teams,” he said.

“Another key area where we are continuously evolving is on strengthening the relationship we have with our customers by focusing on the overall customer experience rather than just customer services. We are client and customer focused across all sectors from the general public to government, medical, banking and beyond.”

“Additionally, our combined Group-wide efforts to pool resources is making good progress and helping to support our efforts to reduce costs,” Shaikh Mohamed added.

Batelco Group chief executive Ihab Hinnawi said that throughout the Group, in order to remain viable in the current digital era and to cater for the continuous digital demand from customers, Batelco’s affiliates and subsidiaries are in the process of transforming their operations by digitizing all their touch points and internal processes in addition to introducing new digital services that will enhance the life of customers as part of the group digital strategy.

“The provision of full digital services will enable a superior customer experience which is always among our key priorities,” said Hinnawi.

“All our operations place great importance on the quality of their networks and the quality of their customer services while working to implement new solutions  to elevate our standards,   and the success of their efforts has been reflected by increasing customer numbers.

“We are very pleased to announce that overall subscriber numbers are up 4 per cent YoY and 3 per cent since Q1 2017. At the end of the six month period, 59 per cent of Revenues and 52 per cent of EBITDA were attributable to operations outside of Bahrain. This is compared with 59 per cent of Revenues and 57 per cent of EBITDA in the first half of 2016.

“Across the Group a number of locations showed significant growth in their customer numbers with Dhiraagu mobile and Broadband subscribers up by 16 per cent YoY. Sure Group has also made impressive gains with their fixed line customer base up by 11 per cent YoY and Broadband subscribers up by 6 per cent. We are particularly pleased to note that Broadband customers at Batelco in Bahrain are up by 34 per cent over the first six months of 2016 and up by 8 per cent over Q1 of this year,” he added.

Batelco Bahrain CEO Muna Al Hashemi said that ongoing investment to modernise Batelco Bahrain’s systems and to implement innovative new solutions were key on the home operation’s agenda.

“Among our key focus points currently is the modernization of our IT systems, which is well underway. Our efforts are designed to deliver a number of key benefits to our customers including enabling them to interact with us in an increasing digital and online way.

“Additionally the upgrade will significantly increase the speed and sophistication of our service delivery for our customers while also supporting our commitment to introduce new generation products and services on a more regular basis.

“Furthermore, and very important in this age of cyber threats, having the most up to date IT systems in place will meet the ever growing need for data protection solutions,” added Al Hashemi.

Hinnawi added: “Mobile subscriber numbers in Bahrain were up by 10 per cent over the previous quarter but showed a decline year-on-year of 11 per cent. However, both the fixed line and Broadband customer base has grown with an increase of 2 per cent and 8 per cent respectively over Q1 2017. Fixed line subscriber numbers are up by 6 per cent YoY while Broadband numbers are up by a very impressive 34 per cent. We are very pleased with this progress which reflects the strong uptake for our value-added-services and also the growing uptake of Batelco’s fibre offers.”

Looking ahead

“We’re a profitable company with some very strong businesses and we’re generating strong cash flow. We are confident that through our restructuring and cost transformation activities along with our efforts to provide the best customer experience, that we can support profitable growth and create further value for our shareholders,” Shaikh Mohammed continued.

“Our confidence in our ability to strengthen our financial and operational performance throughout the rest of 2017 has been boosted by a number of improvements made during the second quarter and we look forward to adding to our achievement during the second half of the year,” Shaikh Mohammed concluded. – TradeArabia News Service

Tags: Bahrain | Mobile | Batelco | subscribers | 2017 profit |

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