Batelco Q3 profit at BD32.5m
Manama : Batelco Group has managed to maintain stable revenues and a robust EBITDA margin despite competitive pressure.
For the nine-month period ended September 2016, the Group’s gross revenues are down marginally by 2 per cent YoY to BD273 million mainly due to competitive pressures in key markets. Gross revenues declined by 4pc in Q3 2016 compared to the same quarter in 2015 and 2pc since Q2 2016.
EBITDA for the period was BD105.2m, a 2pc decline year over year. EBITDA decreased by 8pc in the third quarter of 2016 compared to Q3 2015 and 6pc since Q2 2016. Throughout the period, the Group continued its successful cost containment programmes resulting in a 3pc YTD reduction in expenditure compared to the same period last year. The Group continues to sustain its robust EBITDA margin of 39pc.
Results from operating activities for the period were BD52.8m, reflecting a 7pc decrease YoY and 21pc decrease QoQ compared to Q3 2015. This decline is attributed to increased depreciation charges for higher capex as a result of significant network expansion throughout the Group.
The Group ended the third quarter of 2016 with a net profit of BD32.5m, a 21pc decline compared to the corresponding period in 2015. Q3 2016 net profit reported a decrease of 27pc over Q3 2015. The reduced net profits for the period are impacted by increased finance costs due to borrowings in the Group’s operation in Jordan, one-off items recorded in 2015 and share of loss of the Group’s investments.
The Group’s balance sheet remains strong; as of September 30, 2016 net assets were valued at BD548.1m with cash balances of BD163.9m. This includes the impact of the interim dividend (10 fils per share) announced and paid during the quarter. Earnings per share for the period stood at 19.5 fils.
The Q3 financial results were announced following a meeting of the Board of Directors at Batelco Group Headquarters yesterday.
The Board noted that the Group’s efforts are focused on transforming operations to achieve a competitive edge and long-term operational excellence. The communications world is shifting due to a thirst for more content and digital transformation; Batelco is paving the way to be positioned as a leading digital solutions and services provider.
Increase in broadband subscribers
The Batelco Group’s operational performance during the first nine months of 2016 reflects the intense competition faced across the Group, which operates in very diverse markets each with their unique needs. Accordingly, efforts are continuing to undertake significant investments depending on the various needs of the individual operations, for the benefit of the Group as a whole.
Across the Group, the overall subscriber numbers are down by 6pc YoY, mainly as a result of decreases in Batelco Bahrain and Sabafon mobile subscribers due to market pressure. However, broadband subscriber numbers have increased by 16pc YoY with particularly strong input from the home market of Bahrain, which has seen a 29pc year-on-year increase in subscribers. This growth is mainly attributable to the take up of fibre services, which are now widely available across Bahrain.
During the period, a number of overseas markets delivered positive results due to the rollout of new and enhanced solutions to exceed their customers’ expectations. Overall, Batelco’s key overseas operations performed well and at the end of the nine-month period, 59pc of revenues and 55pc of EBITDA were attributable to operations outside Bahrain.
MoUs to develop 5G, IoT
At Batelco Bahrain it was a very busy period marked by a number of key announcements and the signing of new agreements, including during GITEX, the major technology exhibition that took place recently in Dubai.
At the GITEX Bahrain Pavilion Batelco was supported by a number of key partners including Ericsson and Sophos. During the week, Batelco signed an MoU with Ericsson to collaborate on the development of 5G and Internet of Things (IoT) use cases. The MoU will help drive innovation and early IoT applications on 5G mobile network technology based on the market requirements in the Kingdom.
Batelco also announced a platinum partnership agreement with Sophos, a key IT security and data protection company. The signing with Sophos is in line with Batelco’s efforts to provide relevant security solutions for Bahrain’s enterprise sector. Additionally, in collaboration with Ericsson and Net4Things, a leading company enabling end-to-end IoT solutions, a variety of Cloud and Sustainability Smart Solutions were demonstrated at the Batelco stand.
Meanwhile, as part of Batelco’s network expansion plans to deliver super-fast Internet services all over the Kingdom, fibre services were launched during the quarter for Durrat Al Bahrain.
While the mobile subscriber base has decreased in Bahrain, this has been off-set by growing broadband numbers as customers continue to graduate to internet-based services in line with global trends and as a result of the strong delivery of in-demand products and services.
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