Bahrain's top telecoms firm Batelco Group has posted a 26 per cent drop in its fourth quarter profit, blaming the slump on aggressive competitive conditions in the Kingdom, restructuring costs for 2012 and 2013 and a number of one-off adjustments.
The regional telecommunications operator of reference with operations across six countries said its quarterly net profit fell to BD60.3 million ($160 million) from BD80 million for 2011.
Batelco said its subscriber base surged to 7.8 million, registering an increase of 18 per cent YoY, when normalized. This includes 17 per cent growth in mobile customers and 52 per cent growth of the broadband subscriber base.
The growth was marked by sound financial results and operating performance at its subsidiaries across the Mena region.
The ebitda for the year stood at BD101.8 million, representing 33 per cent margin, versus BD126 million the year before. The adjusted Ebitda normalised for one-offs was BD123 million at 40 per cent.
The Batelco Group’s gross revenues stood at BD304.7 million for the year compared to BD327 million in the previous year. In line with the Group’s continued diversification, 41 per cent of revenues and 39 per cent of Ebitda are now generated from markets outside of Bahrain where the Group continues to focus on strengthening its performance and reach.
The Group ended the year with a strong balance sheet and financial position. As of December 31, 2012, its net assets stood at BD520.2 million with net debt of BD18.4 million and cash and bank balances of BD95 million.
The soundness of the Group’s financial health and performance were further underscored by the affirmation of its Investment Grade Credit Rating by leading global ratings agencies Fitch and Standard & Poor’s Ratings Services in November and December of 2012, respectively.
This effectively positions Batelco to continue to pursue and support its growth and strategy for further diversification including its recently announced plans for the strategic acquisition of Cable & Wireless Communications’ (CWC) Monaco and Islands Division, which was approved by the shareholders of both companies in early January 2013, and which remains on track to close during the first quarter of the 2013.
Batelco Group chairman Shaikh Hamad Bin Abdulla Al Khalifa said the group continued to deliver sound financial results in line with the guidance provided and expectations for 2012.
He was speaking after a meeting of the board of directors at the Group’s Bahrain Headquarters.
"As was noted in previous quarters, beyond aggressive competition in the Bahrain market and elsewhere in the region, our results for 2012 were also impacted by a number of one off charges including expenses associated with an extensive restructuring and cost rationalization programme at our Bahrain operations, the benefits of which include BD20 million in annual savings starting 2014, which will help us to further strengthen our performance and financial results as we go forward."
"That said despite the decline in revenue and income year over year, our profits remained healthy as did our ability to deliver adequate returns to shareholders," he stated.
Batelco's board, he said, has recommended to the Annual General Assembly of shareholders a full year cash dividend of BD36 million at a value of 25 fils per share, of which 15 fils per share was already paid during the third quarter of 2012 with the remaining 10 fils to be paid in cash following the AGM in February.
In addition, the board will also recommend a 10 per cent bonus share issue, awarding one extra share for every 10 shares currently held by the Company’s shareholders, he added.
Shaikh Hamad said, "The actions we’ve taken over the past year, both in streamlining our operations and planning for further growth will also ensure this continues well into the future. Towards this end, we were delighted to have announced in December 2012 our intention to make a transformative acquisition."
"With the addition of CWC’s Monaco and Islands Businesses, Batelco Group is poised to emerge as a regional company of international reference with an innovative portfolio of services and a more diversified revenue stream," he stated.
Shaikh Hamad said Batelco's growth strategy and the further development of the group were a reflection of the strong leadership by its executive teams, supported by tremendous efforts by employees across all markets to retain customers’ loyalties and improve the way the company develops and delivers services.
"We are confident that combined with our continued organic growth, this acquisition, which will be accretive from the outset, will help to even further bolster profitability and our ability to deliver value for shareholders," he added.
Group CEO, Shaikh Mohamed Bin Isa Al Khalifa, said: “We are extremely pleased with the strides we have made during 2012 and the foundations we have set for further building our operations, subscriber base and presence in both existing and new growth markets."
"We ended the year on a strong note throughout our operations. Our total subscriber base grew to more than 7.8 million across six markets (excluding results from Indian operations) representing 18 per cent growth year on year with especially strong results from Jordan and Yemen during the year and fourth quarter in particular. We are working hard to support organic growth whilst continuing to identify opportunities to acquire new cash generative businesses with a strong and growing base of customers.
“Despite ongoing challenges in the Mena markets and difficult market conditions worldwide, we successfully identified and announced a major acquisition which will see the size, scale and reach of the Group expand significantly," Shaikh Mohamed pointed out.
"Through the synergies Batelco hopes to achieve by the pooling of resources, technologies and expertise, we will also further enhance our competitiveness and the strong presence we have already built and progressed in 2012 across our existing markets of operation," he stated.
"This includes reinforcing our market position in Bahrain, where we remain the leaders across a significant spectrum of communications services, as well as the strengthening of our operations in overseas markets, where we are continuing to grow and build market share," he added.
Batelco said its mobile subscriber numbers grew 17 per cent year over year and 5 per cent quarter on quarter. This increase was supported by strong performance in Jordan and Yemen as well as success in Bahrain in maintaining market share, despite aggressive competition.
Commenting on the year ahead, Shaikh Mohamed said, “We have entered 2013 in a strong financial position, continuing to focus on customers and innovation. We remain committed to identifying new avenues for growth in order to leverage our strengths and allow for the expansion of our mobile and broadband subscriber base and enterprise solutions.” -TradeArabia News Service