Manama, Bahrain: Batelco Chairman Shaikh Hamad Bin Abdulla Al Khalifa announced full year results for the period ending 31 Dec 2010 following a Batelco Group Board Meeting held at Hamala Headquarters on Wednesday 26th January 2011. Gross revenues were steady at BD340.3 million ($902.7 million) and net profit of BD86.8 million ($230.2 million), a 17.4% decline over 2009.
The Batelco Chairman said that while the Batelco Group ended 2010 with an impressive customer base of 9.2 million subscribers across its seven operating markets, the Group's annual financial results were affected by the decline of market share in Bahrain and by its share of expected losses for its start-up operation S Tel (India), which has just completed its first full year of operation.
Shaikh Hamad said that the Board of Directors would recommend to the General Assembly of Shareholders a full year cash dividend of BD64.8 million ($171.9 million). This represents the equivalent of 45% of the paid-up capital - at a value of 45 fils per share, of which 20 fils per share was announced and paid in July 2010.
"The remaining 25 fils will be paid after the Annual General Assembly scheduled to take place in February.
"In spite of tremendous growth in customer numbers group-wide and strong results from our subsidiary Umniah, we continue to be impacted in Bahrain by increasing competition and regulatory decisions which limited Batelco's growth in a heavily saturated market," Shaikh Hamad stated.
"The competitive environment in the Kingdom due to the entry of the third mobile operator in early 2010 and ongoing tough regulation has created a highly competitive market place. In contrast to other markets Batelco operates in, Bahrain was the only market where Batelco experienced a reduction of customers for mobile and fixed broadband services in 2010 over 2009. The decreasing numbers of customers and TRA's non approval of innovative pricing in broadband services limiting Batelco's ability to effectively compete, contributed to reduced revenues and operating profits," Shaikh Hamad noted.
Batelco Group Chief Executive Officer Peter Kaliaropoulos said that the end-of-year results were in line with forecasted expectations and market guidance as previously communicated throughout 2010.
"In February 2010 we offered market guidance that we anticipated a decline in net profits for the full year due to our share of losses for S Tel and due to the market conditions in the highly penetrated, ex-growth market in Bahrain."
Batelco Group consolidates in its financial accounts the results of its operations from Bahrain, Jordan and Kuwait.
"Our Operating Profit for 2010 of BD106.5 million ($282.5 million) declined by 4.7% compared to the previous year. Whilst Batelco Bahrain's operating profit was lower, stronger year-on-year results from Umniah reduced the overall decline in operating profit. Batelco's overseas operations contributed 34% of gross revenues and 25% of EBITDA. Group Free Cashflow of BD109 million ($289 million), representing a 75% EBITDA conversion rate, exceeded guidance," Mr. Kaliaropoulos stated.
"At a Group level, factors which further impacted our net profit included our share of S Tel's first year losses and the end of Sabafon's investment tax exemption in Yemen, a total of BD13 million adverse impact," Mr. Kaliaropoulos explained.
Mr. Kaliaropoulos continued by saying that growing customer numbers across the Group was a strategic priority for Batelco.
"We are extremely pleased to announce that the total number of customers across all our operations grew by 67.1% over 2009, with numbers now in excess of 9.2 million.
"Batelco Bahrain's customer base on 31 December 2010 stood at 770,000 mobile customers (6.3% lower than 2009), 88,500 Broadband customers (4.5% growth) and 185,000 fixed lines, a decline of 7.4% compared to 2009," he said.
"Whilst our overall mobile base in Bahrain is lower than 2009, our number of Blackberry customers has doubled and the increase in our wireless Broadband numbers has been buoyed by the success of O-net for which the customer base has also doubled," Mr. Kaliaropoulos added.
Batelco also invested BD22 million ($58 million) in new wireless and fixed infrastructure in Bahrain in 2010.
Batelco Group's total mobile base now stands at over 8.8 million with just under 250,000 Broadband customers.
Umniah, Batelco's 96% owned subsidiary in Jordan, continues to demonstrate its strength and popularity in the Jordanian market with a mobile customer base of 2.1 million and 19,000 Broadband customers, increases of 31.5% and 5.1% YoY respectively.
Sabafon, in which the Group holds a 26.94% equity investment, has continued to impress and ended the year with over 3.6 million customers, an impressive 40.2% increase over the past year.
In spite of a difficult regulatory environment in Saudi Arabia, Etihad Atheeb, in which Batelco holds 15% equity, has managed to grow its Broadband customer base by a staggering 100% to 104,000 thanks to the commitment of a strong team and the reliability and popularity of its GO brand.
Customer numbers at S Tel India, in which Batelco holds 42.7% equity, have also significantly increased. S Tel now operates in Bihar, Odisha, Himachal Pradesh, Assam and North East and boasts a network of 3,500 base stations. During the first full year of operation the customer base has grown to over 2.3 million, representing quarter of the Group's customer base. S Tel is now in the process of rolling out services in its final circle Jammu & Kashmir.
The Batelco Group CEO said that acquisitions remain high on the Company's agenda for 2011.
"We had hoped to increase our footprint in 2010 but the right opportunity did not materialise. To realise further growth and diversify our revenues, we need to increase our scale and invest in companies that are already established but still offer growth in their markets or in new start ups ready to launch. Looking to acquire now licences is not an option that we are considering."
First for Customer Care
Batelco's strategy in delivering a full range of communication services, world leading products and unmatched customer care are the drivers for maintaining Batelco's leading position in the Kingdom of Bahrain.
"Batelco's focus will continue to be on delivering quality and innovative services and, offering better value to customers. Such strategy led to a substantial rise in numbers for our Blackberry and O-net services in 2010," Mr. Kaliaropoulos said.
"Batelco was the first in the Kingdom to offer a prepaid Blackberry package which has been very popular. That offering, coupled with very competitive deals for Blackberry post-paid services, has seen our Blackberry customer base double. We anticipate further success with our Blackberry services as in today's digital networked economy people find it necessary to be constantly connected to their workplace."
"Similarly, our O-net Mobile Broadband, which provisions for internet 'on the go', continues to win new customers and numbers have doubled over the course of the year."
In 2010 Batelco's range of postpaid packages was extended to include new packages including Super 10, Super 30 and Supersmart which all feature free voice & video minutes and free SMS's and the Supersmart even included a free iPhone 4 and 600MB Data bundle, which created rapid uptake by customers.
"For our Broadband customers, we recently introduced Batelco Inet Security Suite, a product that can be installed on PCs or Laptops to protect the systems from threats such as viruses, Trojans, internet phishing attacks and also spam. At only BD9 and available to download direct from our e-Services site on batelco.com this is something that we can recommend to all our Broadband customers," said Mr. Kaliaropoulos.
"For our business customers we aim to be unbeatable in the Kingdom with our range of end-to-end solutions and services which includes structured cabling, LAN's (Local Area Networks), WAN's (Wide Area Networks) and unified communications designed with business customers in mind."
"We have some exciting new products and services currently in development as well as price reductions and upgrade plans awaiting TRA approval, so we look forward to delivering some very beneficial offerings for our customers in 2011," added Mr. Kaliaropoulos.
Batelco was awarded the Telecoms Company of the Year awardacross the Middle East Region at the annual Arabian Business Achievements Awards 2010 ceremony, for the 2nd consecutive year.
This rounded out 2010 on a high note and followed a number of other achievements throughout the year. The Company's successes included being voted as Bahrain's Leading Quoted Company for Investor Relations (IR) at the Middle East Investor Relations (ME-IR) Awards ceremony held in Beirut, Lebanon. Batelco was also the most successful organisation at the 2010 GEMAS Effie MENA Awards, taking home 5 awards.
Furthermore, Batelco's E-Services, the Company's online customer services portal, was awarded ISO 27001 Certification - the International Standard for Information Security Management, following a rigorous auditing process conducted by Bureau Veritas Certification. Batelco is the first telecommunications company in the Kingdom of Bahrain to have its online e-Services certified with ISO 27001.
"Such recognition reflects the collective efforts of all our people, across all operations and their dedication to our customers and our company. We operate today in an ever more competitive marketplace and we believe that it is our people that give us the edge and ensure our continued success," Mr. Kaliaropoulos stated.
Part of the Kingdom's Community
Batelco Chairman Shaikh Hamad bin Abdulla Al Khalifa said that in committing over BD3 million in 2010 to a diverse range of worthwhile causes, Batelco was upholding its ongoing responsibility to the people of the Kingdom of Bahrain.
"Our Corporate Social Responsibility (CSR) aims to support as many health, education, sports and cultural programmes for the community as possible."
Among the recipients in Batelco's well established CSR programme in 2010 were the Shaikh Mohammed Bin Khalifa Bin Salman Al Khalifa Cardiac Centre with a donation of BD600,000 to purchase specialised equipment and Al Manar Centre and Muharraq Social Welfare Centre with contributions of BD10,000 each, to support elderly members of the community.
Additionally, Batelco delivered 25,000 Ramadan baskets to the Kingdom's charitable organisations during the holy month of Ramadan 2010 for distribution to needy families.
The Batelco Chairman Shaikh Hamad concluded his statements by offering a vote of thanks to all Batelco's employees in Bahrain and overseas for their efforts in carrying out the Company's aims in 2010.
Shaikh Hamad added that he and his colleagues on the Board looked forward to working alongside the new Bahrain CE Rashid Abdulla and wished him every success as he tackles a tough challenge in taking Batelco Bahrain forward, in the face of ongoing competition and stringent regulation.
Batelco Group Chief Executive Mr. Kaliaropoulos concluded by welcoming Rashid Abdulla to the role of CEO of Batelco's Operations in Bahrain and extending a special appreciation to all employees and managers.
"We anticipate that the future will be tougher as a high level of penetration is now the reality in many of the markets we operate in. However, ongoing innovation, and 'focus on the basics - innovation, value, customer care and people', will continue to deliver strong operating profit and cashflow in 2011," concluded Mr. Kaliaropoulos.Back