Batelco Q1 profit edges down over forex effects

Batelco Q1 profit edges down over forex effects
Batelco Q1 profit edges down over forex effectsTradeArabia

Batelco Group , the Bahrain-based telecommunications group with operations across 14 countries, posted a 2 per cent fall in first-quarter profit after revenue was dented by tougher competition and adverse foreign exchange movements. Batelco made net profit of BD14.2 million ($37.66 million) in three months to March 31, it said in a statement. The profit

Batelco Group , the Bahrain-based telecommunications group with operations across 14 countries, posted a 2 per cent fall in first-quarter profit after revenue was dented by tougher competition and adverse foreign exchange movements.

Batelco made net profit of BD14.2 million ($37.66 million) in three months to March 31, it said in a statement.

The profit was, however, up by 68 per cent in comparison to the previous quarter (Q4, 2014).

Subscriber numbers across the group continued to grow with the total customer base reaching just short of 10 million, the company said.

The group reported gross revenues of BD93.7 million ($248.5 million), a 4 per cent decrease year-on-year and 4 per cent decline over the previous quarter. The decline in revenues is partly due to movements in foreign exchange rates and competitive pressures in a number of the group’s operations, it said.

Overseas operations of the group contributed 59 per cent of revenues and 54 per cent of EBITDA.

EBITDA for the period was BD35.7 million ($94.7 million), representing a margin of 38 per cent, a 6 per cent decline from the corresponding period in 2014 but 7 per cent up from the previous quarter.  Despite the reduction in EBITDA compared to the same period last year, the group was able to continue its cost containment programmes with expenditure down 2 per cent from the same period last year. The group continues to sustain a robust EBITDA margin, a statement said.

The group’s balance sheet remained strong and as of March 31, 2015, net assets were BD564.6 million ($1,497.6 million) with substantial cash and bank balances of BD148.7 million ($394.4 million).  Net debt continues to remain low at BD28.5 million ($75.6 million). Earnings per share for the first quarter are 8.6 fils.

Batelco Group chairman Shaikh Hamad Bin Abdulla Al Khalifa, who announced the results following the meeting of the Board of Directors today, said: “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. By continuing to pool group resources, technologies and expertise, Batelco Group aims to enhance competitiveness and performance in all markets of operation. We need to continue with our restructuring programmes to reduce our operating costs,” Shaikh Hamad said.

“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 Review & Highlights

Commenting on the operational performance for the period, Batelco Group acting CEO Ihab Hinnawi said: “It is pleasing to note that our customer numbers across the group continue to grow with excellent gains in mobile and broadband figures in our home market and a number of our overseas markets.”

“For the period, we grew our subscriber base to 9.9 million across our 14 markets of operation, a rise of 9 per cent year-on-year and 4 per cent since the start of 2015. This is encouraging as it demonstrates that our products and services are being very well received by the Group’s customers.

“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.

Hinnawi said despite aggressive competition in Bahrain, Batelco maintained a strong presence in the mobile market supported by its retention of high value post-paid residential and business customers.

“For the period, mobile subscribers in Bahrain increased by 15 per cent, over the previous quarter and also by 15 per cent year-on-year. The Broadband subscriber growth remained impressive with year-over-year growth of 22 per cent and a 6 per cent 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 1 per cent growth since Q1, 2014.”

He said the company’s fibre network expansion programme is making excellent progress and services are now available in a wide number of areas with new locations coming on line continuously. “The service features the highest dedicated, stable superfast download in Bahrain and we have recently launched our latest superfast Broadband package with speeds up to 300Mb,” he said. – TradeArabia News Service

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