BATELCO Q1 PROFIT DROPS TO BD14.2M

Telecommunication service provider Batelco Group yesterday posted a 2 per cent decline in its first quarter net profit, as its revenues dropped 4pc year-over-year hurt by tough competition and unfavourable movements in foreign exchange rates, notwithstanding increases in customer base.

The company made a net profit of BD14.2 million (US$37.7m) and gross revenues of BD93.7m (US$248.5m) in the first three months of 2015. Earnings per share for the first quarter are 8.6 fils.

The declines in revenue was despite Batelco, which has operation in 14 countries, recording an increase in subscriber numbers by 9pc year-on-year-to 9.9 million.

EBITDA for the period was BD35.7m (US$94.7m), representing a margin of 38pc, a 6pc decline from the corresponding period in 2014. The group, however, said it was able to continue its cost containment programmes with expenditure down 2pc from the same period last year.

Net assets were BD564.6m (US$1,497.6m) with substantial cash and bank balances of BD148.7m (US$394.4m).  Net debt continues to remain at BD28.5m (US$75.6m).

“We are pleased with our first quarter results that delivered profits in line with 2014, despite the intensity of the competitive situation in our home market and also throughout the Group,” said, Batelco Group Chairman, Shaikh Hamad Bin Abdulla Al Khalifa.

“It is also important that we continue to focus on improving the solutions we provide to our customers  in all of our markets of operation, to ensure we are the customers’ first choice in all markets,” added Shaikh Hamad.

Operational performance

Commenting on the operational performance, Batelco Group A/CEO Ihab Hinnawi said: “For the period, we grew our subscriber base to 9.9 million across our 14 markets of operation, a rise of

9% year-on-year and 4% since the start of 2015.”

“However, while customer numbers continue to grow, the intensity of competition in the Consumer Market is impacting ARPU as the industry has created an expectation of providing more product and service for less. Bundled deals deliver devices with services, which is great news for customers, but negatively impacts the bottom line,” he said.

“For the period, mobile subscribers in Bahrain increased by 15pc, over the previous quarter and also by 15pc year-on-year. The Broadband subscriber growth remained impressive with year-over-year growth of 22pc and a 6pc increase quarter-on-quarter.  As in previous periods, and reflecting a global shift to mobile services, demand for fixed line services declined with only a marginal 1pc growth since Q1, 2014.”

Forecast 

Looking Forward, Batelco Chairman Shaikh Hamad said, “Our grand plans for 2015 include the roll out of an LTE enabled network to meet customer demands for mobile services in the South Atlantic, specifically for St. Helena and Ascension Island.  This investment is part of Batelco Group’s ongoing strategy to build and enhance mobile networks across all of its operations.”