Batelco Group 9-month profit plunges 14pc
Manama, October 30, 2013
Bahrain's leading telecom services operator Batelco said its net profit for the nine-month period fell 14 per cent to BD36.7 million ($97.3 million) compared to BD42.6 million last year.
Announcing the results on Wednesday (October 30), Batelco said the profits for the period were impacted by a number of one off expenses including those associated with the Islands Portfolio acquisition.
Meanwhile, Reuters said that as per its calculations, Batelco had made a net profit of BD11.45 million in the third quarter, up from BD8 million in the year-earlier period.
One of their analysts had forecast Batelco's quarterly profit would be BD14.9 million.
In line with ongoing efforts to diversify revenues and maximise investments, Batelco Group said there had been an increased contribution from overseas markets thanks to the positive impact from the newly-acquired Island Portfolio from CWC.
Ebitda for the period was BD88.1 million, representing a healthy margin of 32 per cent, compared to Ebitda of BD73.4 million and a 32 per cent margin for the corresponding period in 2012.
The group’s gross revenue for the period rose to BD271.2 million from BD227.6 million year over year. The operating profit for the period was BD46.5 million compared to BD46.6 million for the corresponding period last year.
At the end of the nine-month period, Batelco said that 53 per cent of the revenues and 52 per cent of Ebitda was attributable to the group’s operations outside of Bahrain.
The Batelco group pointed out that its balance sheet remained strong. As of September 30, 2013, there was substantial cash and bank balances of BD156.1 million. This includes the impact of the interim dividend (10 fils per share) announced and paid during the quarter. Earnings per share for the period stood at 23.2 fils, it added.
Commenting on the results, Batelco chairman Shaikh Hamad Bin Abdulla Al Khalifa, said: "The first nine months of the year continued to be marked by consistently strong cash generation and growing customer numbers across the Group thanks largely to the addition of the Island Portfolio businesses, included for the first time in Batelco Group’s half year 2013 figures."
"This business crucial transaction has enabled us to strengthen our financial performance to emerge as a more profitable and cash generative communications Group," he stated.
"Diversification has been a key strategy for Batelco Group for some years already and we are delighted that the fruits of our M&A investments are beginning to make a significant positive impact on the bottom line," remarked Shaikh Hamad.
"When we embarked on our overseas expansion strategy in order to offset the decline of our business in the home market, our target was to see half of our revenues coming from our overseas investments. We have not only attained that goal but exceeded it with over half our revenues and profits now generated from outside our home market,” Shaikh Hamad stated.
“With the ongoing integration of our new overseas businesses, we expect to benefit from greater contribution from them as we go forward. This, in combination with the progress we are making in improving our competitiveness across all existing operations, will enable us to deliver on our commitment to our shareholders, which remains a key priority, by delivering stronger results,” he added.
Shaikh Hamad said across the Group, Batelco had retained its focus on enhancing competitiveness in its home market as well as at the group’s existing operations and the newly-added subsidiaries.
This has meant remaining innovative in the approach to serving customers as well as in the manner in which all the operations are managed, he added.
Shaikh Hamad pointed out that one measure for the group's success has been the tremendous growth in the subscriber base which rose to 8.8 million, an increase of 22 per cent since 2012 and a three per cent increase over the last quarter.
“This reflects gains made in a number of our existing markets, namely Bahrain, Jordan, Yemen and Kuwait in addition to steady customer numbers at our new overseas markets, included for the first time in Batelco’s H1 2013 results,” he added
Across the Group, mobile subscriber numbers grew to 8.3 million, an increase of 22 per cent year-over-year and 3 per cent since last quarter.
Solid results were also reported for broadband, with customer numbers up by 3 per cent since last quarter. Fixed line subscribers rose by 39 per cent year over year and remained steady quarter on quarter. All subscriber numbers have been boosted by the addition of the Island Portfolio, said the top official.
Contributing to overall Group subscriber and financial growth was healthy performance throughout the period from key subsidiaries that continue to deliver favourable returns with overall performance enhanced by the Island Portfolio, he noted.
Shaikh Hamad said 2013 had been a significant year so far for the Batelco Group as the company has become a major communications force internationally due to its addition of the Island Portfolio.
“Our growth this year positions us as one of the most important organisations in the Kingdom of Bahrain and the country’s largest shareholding company. We are buoyed by this success which has swelled our customer base and diversified our revenues stream. Furthermore, we are in a strong position to build on this platform in order to strengthen our performance at home and abroad and better serve both our customers and shareholders,” he added.
Batelco also owns Jordanian telecoms operator Umniah, 27 per cent of Yemeni mobile operator Sabafonn as well as minority stakes in Internet providers in Kuwait and Saudi Arabia.
Umniah continued to deliver strong results throughout the first nine months of the year despite recent tax increases by the government. Its mobile subscriber base grew to 2.7 million, up 12 per cent year-over-year and six per cent since last quarter, said the company in its statement.
In Kuwait, its subsidiary Qualitynet, which delivers total ICT solutions, remains the market leader in Kuwait’s Data Communications and Internet Services industry.
At its home base too, mobile subscribers increased by 29 per cent year-over-year and by 4 per cent since last quarter, to hit 875,000. The increase marks the 4th consecutive quarter of mobile growth in Bahrain, with these positive results reflecting a focus on delivering top quality products and services, best value, great offers and prize winning promotions, said the company statement.
In line with a commitment to continually enhance its networks Batelco upgraded its 4G LTE speed from 100 Mbps to 150 Mbps, with this initiative being very well received by customers. Batelco also extended its 4G LTE mobile internet to prepaid customers, becoming the first Bahrain-based telco to offer the service for prepaid customers.
Thousands of customers also joined its recent SMS Challenge which offered cash prizes worth $162,000 with daily winners throughout the summer long promotion and the top winner receiving a fantastic $50,000 in cash.
Such ongoing initiatives enable Batelco in Bahrain to retain customers and attract new customers, and support the Company’s strategies in responding to the ongoing challenge presented by competitors, it stated.
Fixed broadband subscribers remained steady in line with a growing shift toward mobile broadband usage. Similar to previous periods, demand for fixed line services in Bahrain continued to decline in favour of mobile.
This decline is in line with industry trends, particularly in the region where users continue to migrate from fixed broadband and telephony to wireless and mobile technologies.
Meanwhile, Batelco has announced the appointment of its new Group and Bahrain chief financial officers. Faisal Qamhiyah who has held the position as chief financial officer for Batelco Bahrain operations since January 2013 has been appointed to the role of Group CFO.
Prior to joining the Batelco Bahrain team Qamhiyah held the position of CFO of Batelco’s Jordan subsidiary, Umniah. Faisal had previously served with distinction as advisor to the board of directors, CEO, CFO, COO and as marketable secuties fund manager in various companies.
On the home front, Sameer Altaf, has been appointed to the position of CFO Bahrain operations. Altaf, joined Batelco in 2008 to lead the financial control function for Batelco Group and Bahrain and has held a number of key roles within the financial division including most recently, the post of Group financial controller.
According to Batelco, the executive search for a new Group CEO is ongoing with the process well underway and proceeding according to plan.
The supervisory committee of the board of directors, consisting of deputy chairman Murad Ali Murad, executive committee chairman Abdul Razak Al Qassim and director Waleed Ahmed AlKhaja, continues to assume the role of the Group CEO on a temporary basis until such time as the new CEO is appointed.-TradeArabia News Service
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