Batelco announces Q3 2008 financial results

Batelco, Bahrain's leading telecommunications company, announced a year to date net profit of BD78.3m ($207.7m), on a turnover of BD245.4m ($650.9m), equivalent to earnings per share of 54.4 fils.

Growth in Gross Revenue year to date was up 15.1% over the same period last year and operating profit year to date was BD72.3m ($191.8m), marginally up 1% year on year, resulting primarily from overseas operations.

Shaikh Hamad said:

"Batelco's Gross Revenue results at the end of the third quarter of 2008 surpassed all similar previous achievements, with year on year revenue growth continuing in the double digits. The company delivered a net profit of BD78.3m ($207.7m), equivalent to a 32% profit margin, reversing the 2.8% year on year decrease that had been reported during half year results. This improvement was delivered through continued double digit top-line growth and strong focus on cost containment and productivity improvement especially in the Bahrain operation."

"Our business is growing despite the fiercely competitive market conditions. In spite of price reductions for products and services arising from the highly competitive nature of our markets, regulatory intervention, and migration of customers to new broadband, telephony and mobile services, Batelco continues to maintain its market leadership position in the Kingdom while growing in strength across the Middle East," he added.

Batelco Chief Executive Officer Peter Kaliaropoulos noted that Batelco Group delivered a record quarterly result for Gross Revenues (BD84.8m), EBITDA (BD38.8m) and Operating Profit (BD27.8m).

"Bahrain continued to deliver steady results and growth was driven mainly by overseas operations which now represent 36% of Batelco's revenues. The Group's 96% owned subsidiary in Jordan, Umniah, has delivered significant year on year revenue growth of 37% buoyed by a 31% increase in the number of mobile subscribers, with a customer base now standing at 1,369k," he added.

Sabafon, in which the Group holds a 26.94% equity investment, has delivered a 18% year on year growth in Gross revenue with the mobile subscribers base increasing by 41%, for a total customer base of 1,942k.

The combined Group active mobile subscribers now exceeds 4 million as Bahrain active mobile subscribers increased by 20% year on year, for a total customer base of 735k.

"Strong revenue performance continues to impact the Group's cost base, with the Group's expenses including network operating expenses, out payments to other operators, staff costs and depreciation increasing 22% year on year. This result however represents a significant reduction from the 30% year on year increase reported during half-year results," he said.

"We are also very pleased with the strong cost containment focus by management but our costs are adversely impacted due to additional provisions for employee redundancy costs," he added.

Delivering to our Customers:

"We continue to deliver a greater variety of mobile, internet and voice offerings for our customers in Bahrain in spite of the combined forces of accelerated regulation and stronger competition," said Mr. Kaliaropoulos.

Significant permanent new offers from Batelco include the introduction of '122' VoIP (Voice over Internet Protocol) calls to International destinations from Batelco's fixed and mobile services.

Mr. Kaliaropoulos said, "This means that our customers can now enjoy IDD (International Direct Dial) calls to worldwide destinations with up to 91% reduction on IDD charges to most countries in the world by just dialling 122 and the international number."

"We also recently introduced 'Batelco World Freedom', a fantastic promotion which makes Batelco the first and only operator in Bahrain to provide incoming calls from anywhere in the world free of charge for its customers, while they roam in 21 selected countries," he added.

"Furthermore, the 3888 range of new mobile numbers was recently launched, giving all Batelco postpaid customers the opportunity to choose a new number through Batelco's website, free of charge," added Mr. Kaliaropoulos.

He concluded, "We will be launching a new range of numbers beginning with 388 for our prepaid customers in the near future."

Batelco now operates 20 shops and kiosks in Bahrain with the most recent addition at Bahrain City Centre Mall. Batelco has provided a complete 2G/3G indoor coverage solution throughout the new mall and in addition provided the complex with a mobile broadband solution capable of throughputs up to 14.4Mbit/s, making it the first site in Bahrain to have such superior capability.

"Thanks to this advanced and innovative technology, Batelco's customers are able to make and receive calls in any part of the complex including the car park, a service not available to the customers of other providers," Mr. Kaliaropoulos said.

"Our major ongoing project - the migration of our legacy fixed networks to a Next Generation Network, will be complete by the end of this year. Following its completion, we will be in a position to roll out advanced products and services that will change the face of telecommunications in Bahrain and further serve to enhance the Kingdom's development," he said.

A Visionary Strategy to Expand:

Batelco's regional plans continue to evolve and gather momentum explained Mr. Kaliaropoulos.

"Our predictions for robust growth and cost and revenue synergies for the Group, due to our overseas investments, are beginning to be realised. Our Expand 2010 strategy aspires to transform Batelco into a regional mobile, broadband and ICT company across 10 countries serving more than 10 million customers by the end of 2010 with 80% of our revenues coming from our overseas operations," he said.

"Longer term Batelco looks forward to being a key member of a regional and global strategic alliance with other telecommunications companies, known for innovation and service excellence and building on its 'World Freedom' initiative," he added.

Reaching Out to the Community:

Batelco, as a proud employer with a 92% Bahraini staff ratio, has also focused on its social and humanitarian obligations. Batelco's Chairman Shaikh Hamad reiterated 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 BD2.5m has been committed through donations and sponsorships," he said.

"In one of the most ambitious projects we have undertaken to date, Batelco is currently in the process of providing fully equipped computer labs and free internet in several villages throughout Bahrain," he added.

"Our contributions this year also include BD200,000 plus specialised equipment valued at a further BD200,000, to the Shaikh Mohammed Bin Khalifa Bin Salman Cardiac Centre, to enhance the medical care and services for cardiac patients," he added.

We also continue to financially support Kind Hamad's Schools of the Future project and the Crown Prince International Scholarship Fund which both aspire to develop Bahrain's future business and community leaders.

Additionally, Batelco, in co-ordination with local charitable societies, distributed 20,000 Ramadan baskets with essential foodstuffs, to needy families across the Kingdom during the Holy Month of Ramadan. This year, a group of Batelco staff volunteered to help with distribution.

Partnering the Kingdom's Economical Success:

The Chief Executive Officer stated that Batelco's strategic priorities will continue to focus on Bahrain as the hub of the Group with ongoing investment in the Kingdom's infrastructure and continuous self-reappraisals, leading to enhancements in service offerings to customers.

He said, "Telecommunications provide the backbone for the growth of any economy and in Bahrain we have witnessed massive growth and development in recent years. Batelco continues to be the builder of national and international digital highways and knowledge hubs linking Bahrain to our global village."

He added, "We take this responsibility seriously and with pride - we have built and managed significant fixed and wireless advanced infrastructure allowing Bahrain to showcase global events such as the annual Formula One and linking Bahrain, the financial capital of the Middle East to the global banking, insurance and financial hubs."

"Batelco's excellent infrastructure is currently also underpinning the Kingdom's 'Business Friendly' drive. We have already convinced many corporate and global companies to place their IT hubs, data centres and call centres in Bahrain. Companies such as Citibank, BNP, DHL and Cisco would not take the risk if Bahrain didn't offer world best class infrastructure," he added.

"We are proud to be in a position of strength with the Batelco Group continuing to grow. The Group's fundamentals are strong and we believe we have the right strategies in place at home and in the region to continue to grow the business. We thank our customers and all our employees for helping us grow," concluded Mr. Kaliaropoulos.