The group reported net profit of BD13.4million against BD16.1milion for the corresponding period in 2012, a decrease of 17% year over year. EBITDA for the period was BD21.9million, representing a 31% margin, versus EBITDA of BD28.3million, for the corresponding period in 2012.
Batelco said the decrease in profitability was mainly attributable to competitive pressures continuing in Bahrain.
“With ongoing efforts to diversify revenues and maximise investments, the Group saw a greater contribution from overseas markets. At the end of the period, 42% of revenues and 39% of EBITDA were generated from operations outside of Bahrain. This will be bolstered in upcoming periods following the successful conclusion of Batelco’s acquisition of a number of Cable & Wireless Communications’ (CWC) companies on 3rd April 2013. The transaction, a milestone for the Group, has seen the addition of 10 new markets which will serve to further diversify the revenue base and contributions to the bottom line during the remainder of 2013 and beyond,” Batelco in a statement said.
The Group’s balance sheet remained strong. As of 31 March 2013, there were significant net cash balances totaling BD75.9million despite the dividend payment during the period.
“Results for the period reflect the intensity of the competitive situation in our home market and the need to accelerate the restructuring programme to reduce our operating costs. Our overseas operations delivered steady performance and sound results. In line with guidance, and despite robust competition in all MENA markets, we delivered reasonable profits although revenues recorded a decline. Also impacting performance were costs relating to our ongoing efforts to enhance competitiveness across the Group. We are focused on preserving margins and strengthening cash flows and the bottom line,” Batelco Chairman, Shaikh Hamad bin Abdulla Al Khalifa, said.
“In line with the growth strategy, the Group acquired 10 operations from CWC, a transformative event for the Group on a number of levels. First, it sees Batelco emerge from being a regional telecommunications provider into a regional operator of international reference. Importantly, it also supports our strategy of adding robust, new revenue streams to our business. As announced, the transaction is accretive and the benefits and contributions from the addition of these cash generative businesses will be reflected in the Group’s financial performance starting in the second quarter with the expected result of enhancing profitability and shareholder value, a main priority. In support of this transaction, the Group has also recently completed a major fundraising exercise successfully launching a US$650 million 7-year bond offering, our first of this kind. We are especially pleased that in less than one week, the offering priced at an attractive spread and generated a US$4.8 billion orderbook from investors across the Middle East, Asia and Europe. The bond also received an Investment Grade rating from Standard & Poor’s and Fitch, reflecting the right confidence in Batelco and its strategy.
“We are also extremely happy to have concluded the acquisition of the CWC companies at the beginning of April for which we were awarded Deal of the Year at the TMT Finance 2013 Middle East & North Africa Conference & Awards in Dubai We are confident that our expanded network and presence will strengthen our competitiveness and our ability to innovate and continually raise the bar, in terms of the quality and level of service we provide. It also ensures a sound platform to further build upon the strong presence that we and our newly acquired companies have established in each of our markets of operation.”