OREANDA-NEWS. Batelco Group (Ticker: BATELCO), the regional Telecommunications Group with operations across 14 countries, today announced its results for the twelve-months ended 31 December 2015 (“the year”). Despite competitive pressure, the Group remained resilient and ended 2015 with net profits in line with the previous year.


Financial and Operational Highlights

 Gross Revenues of BD372.4M (US$987.8M) for the year, a decrease of 4% YoY;
 EBITDA of BD137.9M (US$365.8M), a decrease of 5% YoY and a margin of 37%;
 Consolidated Net Profit of BD49.5M (US$131.3M) in line with the previous year;
 Markets outside of Bahrain contribute 59% of revenues and 55% of EBITDA;
 Subscriber base of over 9 million, a decrease of 5% YoY;
 Substantial cash and bank balances of BD160.0M (US$424.4M); and
 EPS of 29.8 fils and recommended dividends of BD41.58M (US$110.29M) for the full year, equivalent to 25 fils per share, marking the Group’s ongoing ability to deliver strong value and returns to shareholders.

For the full year 2015, Batelco Group reported Net Profits of BD49.5M (US$131.3M) from BD49.3M (US$130.8M) for 2014, in line with the previous year. Net profit in the fourth quarter of the year was 2% higher than the correspondent quarter in 2014.

EBITDA for the year was BD137.9M (US$365.8M) versus EBITDA of BD144.7M (US$383.8M) for 2014, a 5% decrease YoY and 7% since Q4 2014. Although EBITDA was negatively impacted by reduced operating results, the Group was able to continue its cost containment discipline with a 6% favourable variance in operating expenditure in 2015 versus the previous year.

The Group’s Gross Revenues stood at BD372.4M (US$987.8M) for the year versus BD389.7M (US$1,033.7M) in the previous year, a decrease of 4% year over year. Q4 2015 Gross Revenues were 5% lower than the fourth quarter of 2014 due to competitive pressure in a number of markets and the resultant falling subscriber numbers.

Operating Profits decreased by 10% YoY from BD77.7M (US$206.1M) in 2014 to BD70.2M (US$186.2M) in 2015. Similarly, and following the same trend as EBITDA, Q4 2015 operating profits were down by 14% compared to the fourth quarter of 2014.

Nonetheless, the Group ended the year with a strong balance sheet and financial position. As of 31 December 2015, net assets were BD573.1M (US$1,520.2M) with substantial cash and bank balances of BD160.0M (US$424.4M). Earnings per share for the full year in 2015 stood at 29.8 fils, compared with 29.7 fils reported in 2014.

The Group also reported that the Board of Directors would recommend to the Annual General Assembly of Shareholders a full year cash dividend of BD41.58M (US$110.29M), at a value of 25 fils per share, of which 10 fils per share was already paid during the third quarter of 2015 with the remaining 15 fils to be paid in cash following the AGM in March.

Batelco Group Chairman, Shaikh Hamad Bin Abdulla Al Khalifa, announcing the 2015 financial results following a meeting of the Board of Directors on 15th February at the Group’s Bahrain Headquarters, said: “We continue to face demanding market conditions across a number of our Group’s operations with the impact reflected in reduced subscriber numbers and negative revenue trends. While some of our operations ended the year on a positive note, the overall picture remains challenging. Nonetheless, we are optimistic that our cost transformation activities, investment in new networks including fibre and efforts to develop and strengthen our digital solutions portfolio, will ultimately boost subscriber numbers and the bottom line.”

“Our strategy and on-going efforts to achieve operational excellence continues and our goal is to deliver sustainable, profitable revenue growth to deliver value for our stakeholders,” Shaikh Hamad added. 

Operational Review

Batelco Group CEO Ihab Hinnawi stated that across the Group customers’ needs continue to evolve with the demand for mobility and data growing in line with global trends towards a digital world with smart homes and smart cities.

“The Group is witnessing significant changes in the usage behaviour of its customers as they become more active members of the emerging digital society. Accordingly, the Group is in a phase of transformation with our sights set on an era of digitalisation; we understand that the future for communications lies in the digital society and across our operations we are making strides to implement and introduce relevant digital solutions for our business customers and consumers,” Mr. Hinnawi said.

“Competitive pressure and the conversion of growing demands into enhanced revenues combine to create formidable challenges which are faced by the communications industry as a whole.”

“Despite the changing communications landscape and competitive challenges, Batelco Group was able to grow its mobile subscriber base in a number of operations, including Bahrain, Umniah in Jordan and Dhiraagu in the Maldives. Overall, the Group’s total subscriber numbers are 5% down year on year with the decrease mainly attributable to declining customer numbers for Sabafon due to the ongoing unrest in Yemen and a difficult operating environment.”

“Our operational strategy continues to focus on pooling of group resources, technology and expertise in order to enhance competitiveness and performance. While each market has its own unique needs, there are many areas where we can consolidate our efforts and we are optimistic that these group-wide exercises will pay dividends going forward,” Mr. Hinnawi added.

JV Highlights

For the year, contributions from operations outside of Bahrain increased both as a percentage of revenues and EBITDA. At year-end 2015, 59% of revenues and 55% of EBITDA were sourced from overseas markets compared to 58% of revenues and 53% of EBITDA in 2014. Overall performance across the Group was particularly enhanced by favourable results in Dhiraagu in the Maldives.

Jordan – Umniah: Umniah continues to demonstrate a significant presence in the Jordanian telecom market due to its strategy of offering high quality services, with the best value, while keeping abreast with sector developments and customers’ various needs and expectations. During the fourth quarter of 2015, Umniah’s mobile subscribers totalled 3.2 million, a 15% YoY increase and 9% increase since last quarter.

Kuwait - Quality Net: Batelco Group holds a 90% shareholding in Qualitynet, which remains the clear market leader in the fixed Data Communications and Internet Services industry in Kuwait. In 2015, the company maintained its broadband market share despite tough competition from fixed and wireless service providers. In the fourth quarter, Qualitynet upgraded its state of the art datacentre, offering customers’ world class services such as a pay as you go model, managed services, end to end connectivity and disaster recovery.

Maldives - Dhiraagu: Dhiraagu delivered strong results for the year based on growth from mobile and enterprise segments. Notable developments during 2015 include the successful completion of the nationwide mobile broadband project to all inhabited islands in the Maldives, the launch of 4G services and the introduction of fibre broadband services (FTTH) providing the fastest speeds in the country. Both mobile and broadband subscribers witnessed a 4% and 16% increase year over year respectively.

Channel Islands & Isle of Man – SURE: During the year Sure CIIM launched full LTE and wholesale line rental services to consumers and businesses across all markets. Strong consumer performance resulted in YOY subscriber numbers up 1% in mobile and 9% in broadband.

South Atlantic & Diego Garcia – SURE: The year’s positive operating performance continued through the fourth quarter in both South Atlantic and Diego Garcia. The mobile base is now growing following the launch of services in Saint Helena and Ascension Island and the Falklands and Diego Garcia continue to report strong overall growth.

Yemen – Sabafon: Sabafon, in which the Group has a 26.94% shareholding, experienced a reduction in subscriber numbers during the fourth quarter of 2015 which resulted in a 21% YoY decline. Despite the drop in subscriber numbers and the difficulties operating in an environment with increased political challenges, the company continued to provide telecommunication services to its customers.

Saudi Arabia - Atheeb: Atheeb, in which Batelco holds a 15% stake, reported a decline of 13% yearover-year in subscriber numbers and 1% since the last quarter due to intense competition in broadband services.

Batelco Bahrain – Investing to Deliver Superior Solutions

Batelco Group CEO Ihab Hinnawi continued by stating that Batelco Bahrain is committed to the local economy and its emerging needs as the country develops into a digitally enabled and diversified economy.

“Batelco’s transformation to be the leading integrated digital services provider in the Kingdom of Bahrain is already in progress as we invest in new technologies in order to remain viable in this new digital world and contribute to this new digital economy. In line with this, Batelco was the first in the Kingdom to launch a series of Cloud-based services to empower businesses to digitise their processes and improve their operational efficiencies.”

“Batelco has invested millions in infrastructure and will continue to invest in building the right platform to enable the future digital services and elevate communication standards. We understand that the availability of full digital services will enable a superior customer experience and offer a new set of customised and innovative services and solutions which will especially support the business sector,” he said.

“Our investment in new networks continued during 2015 to deliver the most reliable cutting edge technology including 300Mbps Broadband, to ensure superior customer experience. The service over our new fibre networks, which we continue to take into new locations, features the highest dedicated, superfast download speed in Bahrain.”

“During 2016 we will continue to focus on delivering top quality products and services throughout the year for both the business and consumer sectors, with all our products and services intended to improve people’s lives in welcome, relevant and affordable ways,” Mr. Hinnawi added.

A Year of Achievement

Batelco’s customer centric strategy is gaining recognition not just locally but within the region as was demonstrated in Batelco being presented with the Best Customer Experience Management Brand award at the 4th CEM in Telecoms: Middle East Summit awards in 2015.

The importance that Batelco places in its Business Continuity programme was also recognised by the world’s leading institute for Business Continuity, the BCI (Business continuity Institute). The BCI presented Batelco with the Award for Best Continuity and Resilience Team 2015, for their achievements in Business Continuity leadership, team operation across all disciplines, major challenges faced by the team and their handling of such challenges.

During 2015 Batelco became Palo Alto Networks first partner in Bahrain to achieve Gold Status in the organisation’s NextWave Partner Programme. Additionally Batelco gained four Advanced Specialisation certificates from Cisco for Enterprise Networks Architecture, Security Architecture, Data Centre Architecture and Collaboration Architecture.

Batelco’s subsidiary Umniah also gained certification from Cisco during the year. As part of the Channel Partner Programme, Umniah added the Cloud and Managed Services Programme (CMSP) Advanced certification to its lineup of achievements.

Outside of the Middle East region, Batelco’s operations have also been successful in winning honours including SURE, Batelco’s subsidiary in the Channel Islands which became the first communications company in the Channel Islands to be accredited with the International standard for Information Security Management.

Furthermore, Batelco’s commitment in upholding sound corporate governance principles was recognised by World Finance who announced Batelco as the winner of the Best Corporate Governance award for Bahrain for 2015.

About Batelco

Batelco Group is headquartered in the Kingdom of Bahrain and listed on the Bahrain Bourse. Batelco has played a pivotal role in the country's development as a major communications hub and today is the leading integrated communications’ provider, continuing to lead and shape the local consumer market and the enterprise ICT market. Batelco has been growing overseas via investing in other market-leading fixed and wireless operators.

Batelco Group has evolved from being a regional Middle Eastern operation to become a major communications company with direct and indirect investments across 14 geographies, namely Bahrain, Jordan, Kuwait, Saudi Arabia, Yemen, Egypt, Guernsey, Jersey, Isle of Man, Maldives, Diego Garcia, St. Helena, Ascension Island and the Falkland Islands.