Batelco Group Profits: Batelco Group Third Quarter 2012 Profits

Manama, Bahrain: Batelco Group (Ticker: BATELCO), the leading telecom in the Middle East of reference with operations across six countries, today announced its results for the nine-month period ended 30 September 2012 (“the Period”), which was marked by strong competitive conditions in the telecom sector of Bahrain and the Kingdom of Bahrain itself and progress in overseas MENA markets.

Financial and Subscriber Highlights
– Gross Revenues of BD 228M (US$ 605M) for the period;
– EBITDA of BD 73M (US$ 194M) representing a 32% margin; Adjusted EBITDA normalized for one-offs was BD 84M (US$ 223M) at 36%;
– Consolidated Net Profit of BD 43M (US$ 114M); Adjusted Net Profit normalised for one-offs was BD 54M (US $143M);
– Group’s total customer base increases to 7.4 million, an increase of 5% QoQ;
– Continued strong uptake of 3G services by Umniah, the Group’s Jordanian subsidiary since launch in June;
– Ongoing diversification of Group revenues with 40% of revenues and 38% of EBITDA now sourced from markets outside Bahrain; and
– Low debt and substantial cash and bank balance of BD 87M (US$ 231M).

For the nine-month period, Batelco Group reported Net Profit of BD 43M (US$ 114M) versus BD 57M (US$ 151M) for the corresponding period in 2011, a decrease of 25%. Reported EBITDA for the period was BD 73M (US$ 194M), representing a 32% margin, compared to EBITDA of BD 93M (US$ 247M) for the previous year. The decline was attributed to aggressive competitive conditions in Bahrain, good leadership of our restructuring programme and a number of one-off adjustments. Specifically, we experienced a 12% drop in gross revenues versus the previous year in our home market due to increased competition and lower tariffs. Redundancy payments for a higher number of employees and an adjustment of mobile data revenues contributed to the low Quarter 3 profit result. Normalised for the above items, the adjusted EBITDA was BD 84M (US$ 223M) with an EBITDA margin of 36%, commensurate with prior periods.

Batelco Group’s Gross Revenue for the period stood at BD 228M (US$ 605M) versus BD 245M (US$ 650M) year over year. Operating Profit of Batelco for the nine-months of 2012 was BD 47M (US$ 125M) versus BD 65M (US$ 172M) for the corresponding period in 2011. In line with ongoing efforts to diversify revenues and maximise investments, Batelco Group continued to see an increasing contribution from overseas markets. At the end of the period, 40% of revenues and 38% of EBITDA was attributable to the Group’s operations outside of Bahrain.

The Group’s balance sheet remained strong. As of 30 September 2012, there was low debt at BD 27M (US$ 72M) and substantial cash and bank balances of BD 87M (US$ 231M). This includes the impact of the interim dividend (15 fils per share) announced and paid during the quarter as well as significant investments made in overseas operations at the start of the year. Earnings per share for the period stood at 29.6 fils.

Batelco Chairman, Shaikh Hamad Bin Abdulla Al Khalifa, announced the results following a meeting of the Board of Directors at Batelco Group Headquarters, stating:
“The first nine months of the year continued to be marked by consistently strong cash generation and growing customer numbers across the Group. A number of one-off adjustments resulted in more pronounced decreases than would otherwise have been the case. Still, margins are healthy and these one-off charges help position the Group in executing its Batelco strategy of revenue enhancement, cost optimisation and achieving scale. The Group continues to generate strong cash flows and underlying profits, well in line with the industry, and shareholder returns, which remain among the strongest in the region despite substantial competitive pressures in Bahrain and across the MENA markets.”

Shaikh Hamad added: “Throughout the period, we remain focused on further building the business and our customer base. We’ve made great progress in this regard and are pleased to announce three consecutive quarters of overall subscriber growth, following the announcement of the sale of our stake in India. We’ve seen a 5% increase since last quarter and an impressive 12% gain in the Group’s subscriber base, when normalised for STel, since Q4 2011. This brings us to 7.4 million users today and growing.”

This press release has been issued by Batelco Corporate Affairs department. For further information, please contact Batelco Public Relations Office at Public.Relations@btc.com.bh / Fax +973 17611898.