Batelco Group: Half Year 2012 Profits of US$ 91.8 Million

Manama, Bahrain: Batelco Group (Ticker: BATELCO), the leading telecom in the Middle East of reference with operations across six countries including Bahrain, today (July 27, 2012) announced its results for the six-month period ended 30 June 2012 (“the Period”), which were marked by the continued leadership in the Kingdom of Bahrain and strength in overseas MENA markets.

FINANCIAL AND SUBSCRIBER HIGHLIGHTS
Gross Revenues of BD 155.3M (US$ 411.9M) for the period;
EBITDA of BD 55.8M (US$ 148.0M) representing a 36% margin;
Consolidated Net Income of BD 34.6M (US$ 91.8M);
Group subscriber base of 7M across the MENA region;
Launch of 3G services by Umniah, the Group’s Jordanian subsidiary;
Continued diversification of Group revenues with 39% of revenues and 33% of operating profit now sourced from markets outside Bahrain;
Low debt and substantial cash and bank balance of BD 87.4M (US$ 231.8M); and
Earnings per share of 24 fils and an approved interim cash dividend of 15 fils per share.

For the first six months of the year, the Group reported Net Profit of BD 34.6.M (US$ 91.8M) versus BD 38.8M (US$ 102.9M) for the corresponding period in 2011, a decrease of 11%. EBITDA for the period was BD 55.8M (US$ 148.0M), representing a healthy 36% margin, compared to EBITDA of BD 64.7M (US$ 171.6M) for the corresponding period in 2011. The Group’s Gross Revenue for the period, which stood at BD 155.3M (US$ 411.9M), was steady quarter over quarter and down 5% from BD 163.2M (US$ 432.9M) year over year. Operating Profit for the period was BD 38.5M (US$ 102.1M) versus BD 46.0M (US$ 122.0M) for the corresponding period in 2011. In line with ongoing efforts to diversify revenues and maximise investments, the Group continued to see an increasing contribution from overseas markets. For the first six months of 2012, 39% of revenues and 33% of Operating Profit was attributable to the Group’s operations outside of Bahrain.

The Group’s balance sheet remained very strong. As of 30 June 2012, there was low debt at BD 27.5M (US$ 72.9M) and substantial cash and bank balances of BD 87.4M (US$ 231.8M). Earnings per share were 24 fils and the Board of Directors approved an interim cash dividend for shareholders of 15 fils per share for the six month period.

Batelco Chairman, Shaikh Hamad Bin Abdulla Al Khalifa, announced the results following a meeting of the Board of Directors at Batelco Group Headquarters, stating:
“We are pleased to report another period of good financial results and operating performance. Throughout the first six months of 2012, the Group has been successful in implementing its strategy aimed at maintaining market leadership at home whilst building on our investments in overseas markets. Despite the impact of ongoing and intense competition in Bahrain and across the MENA region overall, the Group continued to generate steady cash flows, maintain a very strong balance sheet and, importantly, retain our ability to deliver value to both our customers and our shareholders. We are delighted once again to announce a healthy interim dividend for the first half of 2012 of 15 fils per share.”

Shaikh Hamad added: “We also continue with efforts to build efficient business operations focused on customers and innovation by further expanding the scope of our services and our subscriber base. In all the existing markets we operate in we remain focused on growth and capturing greater synergies.
In our home market, Bahrain, we continue to face significant competition from other operators coupled with lack of any significant growth. As a priority, we are implementing various initiatives to improve efficiencies, lower our operating cost structure and be more responsive to our customers with a full service portfolio.”

Batelco Vision and Focus for Second Half of 2012

Concluding, Shaikh Mohamed noted: “As set out at the outset of this year, our primary focus for the remainder of 2012 is remaining competitive and achieving growth. We are looking at all possible avenues to enhance performance across the Group. Efficiency is essential to our growth and our ability to perform operationally and financially. We have launched a significant cost leadership initiative to better align our competitive cost structure to face our competition. We are also focused on expanding our network and are pursuing all available avenues to build customer numbers and grow our subscriber base to a larger critical mass. Following our strategy and with the support of a solid financial and operational base, we have every confidence in our ability to build and deliver value in the months ahead.”