Batelco reports 9M results; revenues down 7%

24 Oct 2012

Bahraini telecoms group Batelco has announced its results for the nine-month period ended 30 September 2012, reporting net profit of BHD43 million (USD114 million), down by 25% from BHD57 million for the corresponding period in 2011. Nine-month EBITDA was BHD73 million, representing a 32% margin, a decline from BHD93 million in 9M11 largely attributed to aggressive competitive conditions in Bahrain, although falling profitability is being addressed with a restructuring and efficiency programme. The company experienced a 12% drop in gross revenues versus the previous year in its home market due to increased competition and lower tariffs, while redundancy payments for a higher number of employees and an adjustment of mobile data revenues contributed to the lower Q3 bottom line. Consolidated total revenue for January-September 2012 stood at BHD228 million, down by 7% from BHD245 million year-on-year, while operating profit (EBIT) was BHD47 million (versus BHD65 million).

Batelco’s consolidated group mobile subscriber base grew by 4% on a quarter-over-quarter basis but recorded a decline of 5% year-on-year, largely due to tough and ongoing competition in Bahrain and the removal of non-active subscribers in Yemen, which took place in the first quarter of 2012. However, gains made over the third quarter reflect positive upward trends in Jordan and Yemen, which are expected to continue, as well as recent success in Bahrain in protecting market share, including in the high value segment. Total customers across the group reached 7.4 million at 30 September 2012.

In highlights from the group’s foreign operations, Batelco indicated that 67,000 sign-ups to the new 3.5G service launched by Umniah in Jordan helped to drive the unit’s subscriber base to nearly 2.4 million customers, up by around 2% since the end of the second quarter. A higher rate of q-o-q growth was recorded at Sabafon (Yemen), with subscriber numbers reaching more than 3.8 million users, up by 7% since end-June (although down 8% y-o-y as a result of the subscriber base clean-up). Ongoing diversification led to 40% of the group’s revenues and 38% of its EBITDA being accounted for by operations outside Bahrain in 3Q12.

At the end of the third quarter, Batelco’s Bahrain unit reported 64% year-on-year growth in mobile broadband subscribers, while demand for fixed services continued to decrease during the quarter, with fixed broadband and fixed line subscriber numbers falling by 12% and 6%, respectively, year-on-year, although remaining relatively stable since Q2.