Batelco Delivers Solid Growth and Steady Profits

Published July 24th, 2008 - 06:37 GMT

Batelco Chairman Shaikh Hamad Bin Abdulla Al Khalifa stated that the Company continues to grow at home and overseas despite the full impact of deregulation and competition in all the markets in which it participates. Shaikh Hamad was speaking at Batelco’s Board Meeting, which took place on 23rd July during which the Company’s half year financial results were announced.
Batelco, Bahrain’s leading telecommunications company, announced a half year growth in gross revenues to BD160.5 million ($425.7m), a 17.7% increase over the same period of 2007 and slightly lower net profit of BD50.8 million ($134.7m) a 2.8% decrease compared to 2007, equivalent to earnings per share of 35.3 fils. The Board of Directors approved an interim cash dividend of 20 fils per share.
“There are now 69 licensed operators in Bahrain and Batelco continues to review its operating strategies in order to retain its market share in the Kingdom,” said Shaikh Hamad.
“Our customers are constantly demanding quicker, smarter and better value services and we must continue to respond to those demands. Putting our customers as our number one priority has never been more crucial,” he added.
Batelco’s Chief Executive Officer, Peter Kaliaropoulos, said that the Batelco Group continued to deliver very strong double digit revenue growth ending the half year at $425.7m. Growth was driven mainly by overseas operations which now represent 33% of Batelco’s revenues. The Group’s 96% owned subsidiary in Jordan Umniah, has delivered significant year on year revenue growth of 59% buoyed by a 61% increase in the number of mobile subscribers, with a customer base now standing at 1,314,000. Sabafon, in which the Group holds a 26.94% equity investment, has delivered a 30% year, on year growth in revenue with the mobile subscribers base increasing by 16%, for a total customer base of 1,889,000.
“Strong revenue performance has also impacted the Group’s cost base, particularly in network operating expenses. Out-payments to other telecom operators increased as a result of significant growth in international traffic minutes, particularly wholesale. Furthermore, our half year results have been impacted by a number of one-off adjustments which had a negative net impact of BD1.2m.  During the same period in 2007, one-off adjustments had a net positive impact of BD4.7m.”
“Whilst profit from our operations increased year-on-year, the one off adjustments contributed to the 2.8% decline in net profits,” Mr. Kaliaropoulos explained.
“Ongoing restructuring of the operations; retrospective charges by the TRC (Telecommunications Regulatory Commission) in Jordan for interconnect traffic and retrospective custom duty and tax expenses; adjustments to depreciation schedules; Bad Debt policy; fines imposed by the TRA (Telecommunication Regulatory Authority) Bahrain and expected legal costs; and employee redundancy compensation provisions combined with competitive pressures for lower prices, have contributed to higher costs in 2008.
Mr. Kaliaropoulos stated that whilst Batelco is implementing a cost leadership programme in the second half of the year and expects double digit revenue growth for 2008, the priority remains one of winning market share in all overseas markets, whilst maintaining market leadership in Bahrain.
Batelco’s customers continue to benefit from product and service offerings that compare favourably with much bigger international markets.
“We continue to deliver a greater variety of mobile, internet and voice offerings in spite of the combined forces of accelerated regulation and stronger competition,” said Mr. Kaliaropoulos.
Batelco customers are currently benefiting from a fantastic line up of seasonal promotions and huge discounts for international calls, special offers for prepaid starter packs, 3G services and fixed Broadband.
Business Customers also welcomed the introduction of additional benefits to Batelco’s web hosting service which is considered as one of the prime online marketing channels for companies. New Web hosting packages offer customers more allocated space with better service features and most importantly, very competitive prices.
Batelco’s mobile customer base in Bahrain, Jordan and Yemen has reached 3.8 million. In Bahrain there are 70,000 customers registered to Batelco’s broadband services and the total number of telephone lines has steadied at 202,000.
Mr. Kaliaropoulos said that a strong performance in the Bahrain market remains a critical factor to Batelco’s strategic expansion.
“Batelco has been investing overseas for the last 3 years and now has operations in six Middle East countries reaching some 60 million people. Such expansion is driven by the commercial realities of the Bahrain market and regulatory policy. As a market leader and incumbent operator in Bahrain, it is a natural imperative to seek sizeable acquisitions overseas.
As part of the Etihad Atheeb consortium Batelco staff based in Saudi Arabia are currently making final preparations to ensure the delivery of wireless broadband, data solutions and voice services by the end of Q4 this year.
“Major contracts worth over $300 million have been signed by the consortium with industry leading companies and plans are in place for further substantial investments over the next five years, to deliver the relevant technologies necessary for the success of the venture,” said Mr. Kaliaropoulos.
‘Furthermore, the Consortium is currently awaiting the approval of the Capital Market Authority in Saudi Arabia to go ahead with an IPO,” he added.
Responsible Member of the Community
Batelco Chairman Shaikh Hamad spoke about how important it is for companies to be responsible and contributing members of the communities in which they operate.
“Batelco has an enviable track record when it comes to living up to its social responsibilities and so far this year over BD2 million has been committed through donations and sponsorships,” he said.
The Company’s recent contributions include the donation of specialised equipment valued at BD200,000 to Shaikh Mohammed Bin Khalifa Bin Salman Al Khalifa Cardiac Centre and also financial support for Hope Institute for Special Education which is celebrating the completion of 30 years serving the needs of the community.
“Additionally, we recognise that we have a responsibility to the environment and recently sponsored the regional gathering of key influential figures to mark the annual United Nations Environment Programme (UNEP) World Environment Day, which took place under the patronage of H.H. Shaikh Abdulla bin Hamad Al Khalifa, Governor of the Southern Governorate and Head of The Public Commission for the Protection of Marine Resources, Environment & Wildlife.”
Furthermore, Batelco as a Company, and two individual staff members received awards for participating in InJaz, a non-profit organisation which aims to educate Bahraini students about the fundamental concepts of business operations.
CEO Peter Kaliaropoulos said that in the second half of 2008 Batelco will continue to deliver on its strategy and strive to develop and offer further innovative services and content for fixed and wireless broadband.
“We are proud of our contribution to the growth and development of the Kingdom by delivering advanced communications technologies which support the Government’s ambitious strategy to have more than 90% of Government Ministry transactions carried out online by 2010.”
“It is also vital that the regulatory environment enables us to make the necessary investments in the next generation of the Kingdom’s communications infrastructure to fully support such major infrastructure initiatives which will lure overseas investors to make Bahrain their first and friendlier choice for business in the Middle East,” Mr. Kaliaropoulos concluded.
About Batelco
Bahrain Telecommunications Company (Batelco) is the leading integrated communications’ provider in the Kingdom of Bahrain and a significant force among the regions key telecommunications players.
Batelco serves both the corporate and consumer markets in the most liberalised and competitive environment in the Middle East, and remains committed to delivering cutting-edge telecommunications to its customers in Bahrain and the MENA region. The Company’s management and staff are driven by an enthusiasm for delivering the best customer experience based on innovation, affordability and reliability of products and services.
Batelco offers complete, end-to-end telecommunications solutions for its residential, business and government customers. The comprehensive solutions portfolio covers mobile services, international roaming, Broadband Internet, satellite services, WiFi, and MPLS IP-VPN based network services utilising our Next Generation all IP Network providing Datacoms services over fixed and wireless platforms in addition to managed services including systems integration and management.
Batelco has invested US$1.4 billion in Bahrain’s telecom infrastructure since 1981, including significant investment in NGN (Next Generation Networks) infrastructure which has reinforced the Kingdom’s position as a leading communications hub. The Company’s shares are listed on the Bahrain Stock Exchange with a total capitalisation of approx US$ 3.1 billion as of June 2008.
With an ongoing strategy to grow overseas, the Batelco Group incorporates joint venture operations in Jordan, Kuwait, Yemen, Saudi Arabia and Egypt.

 


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