Batelco’s revenues climb 10%, subscribers up 24%, following Islands consolidation

31 Jul 2013

Bahrain’s Batelco Group has issued its financial results for the six months ended 30 June 2013 for operations across 16 countries including its newly acquired Island Units (Dhiraagu, Channel Islands & Isle of Man, South Atlantic and Diego Garcia – covering a total of ten markets) bought from Cable & Wireless Communications (CWC) on 3 April. The group reported consolidated net profit of BHD27.0 million (USD71.6 million) versus BHD34.6 million for the corresponding period of 2012, a decrease of 22% year-on-year; profits for the six-month period were impacted by a number of one-off expenses associated with the Island acquisition and related financing. Consolidated EBITDA for H1 2013 was BHD56.6 million, up 1% from BHD55.8 million a year earlier. Gross revenue for the period rose 10% to BHD170.7 million, up from BHD155.3 million in 1H12, while 6M operating profit declined by 13% y-o-y to BHD33.5 million. The group saw increased contributions from overseas markets both existing and through the ten new markets added. At the end of June 2013 50% of revenues and 48% of EBITDA was attributable to operations outside of Bahrain, compared with 39% of revenues and 35% of EBITDA at the end of the first half of 2012, and 42% of revenues and 39% of EBITDA in the first quarter of 2013.

The group’s consolidated subscriber base grew to 8.6 million customers at 30 June 2013, a rise of 24% year-on-year and 13% since the end of March 2013, reflecting recent gains in a number of existing markets including Bahrain, Jordan, Yemen and Kuwait as well as the addition of approximately 573,000 acquired Islands mobile, broadband and fixed line subscribers. Broken down by segment, mobile subscriber numbers grew 24% year-over-year and 12% quarter-on-quarter at end-June; broadband customers increased by 23% y-o-y and 19% q-o-q; fixed line subscribers rose by 39% y-o-y and 44% q-o-q as a result of the addition of Island fixed line users.

Jordanian subsidiary Umniah’s mobile subscriber base grew to 2.5 million, an increase of 8% year-over-year and 5% since last quarter, while fixed broadband customers increased 36% increase year-over-year and 5% quarter-on-quarter. Kuwaiti subsidiary Qualitynet served around 42,000 broadband/data users at end-June, a y-o-y gain of 5%.

At the Channel Islands & Isle of Man unit, a complete rebrand to Sure was completed on 3 July 2013. Mobile subscriber growth was 6% and the broadband segment achieved double-digit subscriber growth supported by IPTV services and mobile bundling.

In the South Atlantic & Diego Garcia division, the first half of 2013 witnessed growth mainly driven by enterprise business such as the construction of secure GPS hosting facilities for the European Space Agency (ESA) on the Falklands and Ascension Island. Batelco added that ‘broadband demand continues to be strong across the businesses and improved offers have been launched as part of the rebranding of Cable & Wireless in the South Atlantic to ‘Sure’. In addition, St Helena launched a new digital TV service and a UK government funded airport project offered new opportunities for the business. Mobile performance was stable in the Falklands with demand expected to increase in the next six months with the ramp-up of oil related activity.’

Maldives operator Dhivehi Raajjeyge Gulhun (Dhiraagu) grew its mobile customer base by 4.1% despite high penetration ‘of 147% in a saturated market’. New parent Batelco noted that ‘upon successful completion of migration to a new billing system, many segment specific offers were launched in the period, which included pre-paid youth tariff, free twitter promotions, new mobile data bundles and new loyalty schemes (for both post-paid and pre-paid). The deployment of HSPA+ to greater Male and seven regional islands was also completed in the most recent quarter.’

Sabafon (Yemen), in which Batelco has a minority shareholding, ended the six-month period with 4.3 million users reflecting growth of 22% y-o-y and 4% q-o-q, while Atheeb (Saudi Arabia), in which Batelco holds a 15% stake, reported a decline of 4% y-o-y in its broadband subscriber base (although ‘largely stable’ in the second quarter).

In its domestic division, Batelco’s Bahraini mobile subscribers increased by 21% year-on-year at 30 June 2013, and by 17% since the previous quarter, a third consecutive quarter of mobile growth in Bahrain. Having become the first operator in Bahrain to offer commercial 4G LTE in February 2013, Batelco rolled out a number of new related packages and services, which it claimed help attract and maintain customers during the first-half. Bahraini fixed broadband subscribers remained ‘stable’ in line with a growing shift toward mobile broadband usage. Similarly, and as in previous periods, demand for fixed line services in Bahrain also continued to decline in favour of mobile.

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