Batelco termed the year with sound financial results and operating performance across its markets of operation in the MENA region and India.
The Group said it would continue on diversification of its revenues with 37% of revenues and 30% of operating profit now sourced from markets outside Bahrain.
The Group ended the year with a strong balance sheet. As of 31 December 2011 Batelco Group was free of debt and had significant cash and bank balances of $286.2million an increase of 24% year on year.
The Group also reported that the board of directors would recommend a full year cash dividend of $152.8 million to the general assembly of shareholders, which represents a 72% payout at a value of 40 fils per share of which 20 fils per share was already paid during the third quarter of the year.
Supporting the Group’s sound financial results was continued growth of its subscriber base. At year end 2011, the Group reported a record 11 million customers, an increase of 20% year on year, underscoring the success of ongoing efforts to add scale to its operations and maximise performance across its regional network.
Batelco Group Chairman, Shaikh Hamad Bin Abdulla Al Khalifa, announcing the 2011 financial results following a meeting of the Board of Directors at the Group’s Bahrain Headquarters, said
“Throughout 2011 Batelco Group had successfully managed our operations balancing its performance in mature markets such as Bahrain, where we have effectively maintained market leadership despite strong competitive pressures, with opportunities to pursue and achieve further growth across our regional markets of operation. Whilst our financial results showed expected declines for the year in line with market guidance, we are nevertheless pleased to have ended the year on a strong note with the fourth quarter accounting for the highest EBITDA reported in 2011. We are also proud of our ongoing ability to deliver value to shareholders. In recommending to the General Assembly a substantial dividend of $152.8 million for the full year, equivalent to 40 fils per share, we see the Group continue to top the ranks of regional telecommunications companies in terms of dividend yields and comparative shareholder returns. Operationally, we are also pleased with our ongoing ability to make progress in building scale, a cornerstone of our growth strategy. In 2011, we successfully expanded our customer base by 20%, bringing our subscriber numbers to a record 11 million users. We will continue to focus on executing the strategy we outlined to our shareholders during last year’s AGM, investing in both strengthening our existing network and further expanding our operations and subscriber base for the benefit of customers and shareholders alike.”
“Our strategic imperatives are supported by the Group’s solid financial position, which we have maintained through strong cash flow generation in 2011, exceeding guidance, and strengthening our balance sheet. Further growth will also be supported by the Group’s Investment Grade Credit Ratings received during the fourth quarter of the year from leading global credit ratings agencies Fitch and Standard & Poor’s Ratings Services. These were the first public credit ratings issued to the Group and affirm our strong operating and financial results and prospects as well as the Group’s overall positive credit quality.”
Commenting on the Group’s operational performance across the network, Group CEO, Shaikh Mohamed Bin Isa Al Khalifa, noted the continued focus on market leadership at home and abroad.
“While 2011 was a challenging year for the MENA markets and, in particular, a number of countries in which the Group is active, we are pleased to have effectively executed our strategy and made progress in growing our network and customer base. In Bahrain, despite intense competition, we worked diligently to remain the leading telecommunications provider in the Kingdom across the full spectrum of services whilst also working hard to drive performance in our overseas operations and key operating segments where we see significant potential. “
The year saw strong growth in the Group’s mobile and broadband customer base, two segments which figure prominently in its growth strategy. By year-end 2011, the Group had successfully grown its total mobile customer base by 21% whilst broadband subscriber figures across the network increased by 8%. The Group continues to focus efforts on further bolstering growth in these segments through innovation, excellence and added value both in Bahrain where it remains the market leader in mobile and broadband and across its subsidiaries where it is witnessing solid growth and continues to see room for even higher levels of penetration.
In 2011, the Group saw the further growth and diversification of its operations geographically, which remains a critical part of its strategy and ability to deliver sound financial results. By year end 2011, the Group reported growth in its overseas operations both in terms of customer numbers as well as levels of contribution to revenues and the bottom line. For the year, 37% of revenues and 30% of operating profit were sourced from markets outside Bahrain. Year on year, this accounts for a 6% and 9% increase in revenues and operating profits, respectively, from operations in Jordan and Kuwait, where growth helped to partially offset some of the effects of intense competition in Bahrain.
In 2011, Batelco retained its market leading position in Bahrain across the full spectrum of telecommunications services. In spite of a 4% decline in its mobile customer base for the year, an expected result of aggressive competition, the dynamics of an already highly penetrated market and the first full year of operations for the third mobile operator, the Group still maintained a strong approximate 44% share of the mobile market including retention of the higher value post-paid individual and business subscribers.
And while Batelco only reported a nominal 1% increase in its broadband customer base for 2011, importantly, it registered more than 50% growth in its wireless broadband subscriber numbers, a cornerstone of its strategy in this segment. In terms of fixed line customers, in line with global market trends and expected losses, subscriber numbers in this segment declined by 8% for 2011 as more customers continue to migrate to mobile services.
“While market conditions in Bahrain have been challenging over the past year and our results impacted by the significant competitive pressures that continue to define the Kingdom’s telecommunications industry, we are pleased with our ability to maintain our market leadership in mobile and broadband and to retain the high value customers we have focused on keeping loyal to the Batelco brand though the ongoing introduction of new and exciting value added products and services that have been brought to market in 2011,” Shaikh Mohamed, said.
Similarly, innovations also continued in broadband, where Batelco aims to ensure that Bahrain residents and businesses are the best connected in the region. During the year, the company offered enhanced service and packages with higher speeds and higher usage thresholds at no additional price increase. It has also successfully tested 100Mbps fixed broadband speeds as part of the roll out of its Fiber Network, which it intends to make available to residents in fiber covered areas in 2012. Batelco also continued to develop complementary broadband services throughout the year such as CCTV and IPTV, among others.
“Our success in maintaining market leadership is wholly routed in initiatives such as these and our ongoing drive to remain competitive. This applies to our approach to the quality and level of choice, price and service we deliver day in and day out to customers as well as our continuous efforts to strengthen and streamline the way we operate our business and manage our costs both on a Group level as well as across each of our individual operations with Bahrain being our largest and most significant,” Shaikh Mohamed, added.
Batelco Group CEO Shaikh Mohamed commented that the Group was firmly focused on effectively deploying its resources so as to further diversify, grow and build value across its operations both in the Kingdom of Bahrain and across overseas growth markets in 2012. This includes those markets in which the Group is currently active as well as others where significant opportunities may exist.
“We continue to look for ways to build scale across our operations and achieve profitable growth. As we go forward in 2012, we will continue to evaluate opportunities to enhance our position in the mobile and broadband markets and achieve greater synergies for the benefit of our customers and shareholders. With the right strategy and management team and having ended the year in a strong financial position, we are confident we are well placed to make further gains and progress and build our market leadership in the year ahead.”