Batelco Group Announces 2018 Half-Year Financial Results

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Batelco, the regional telecommunications group with operations across 14 countries, today announced its financial results for the second quarter of 2018, the three month period ended 30 June 2018 (Q2) and for the first six months of 2018 (H1). Following on from the promising start to the year reported in Q1 2018, the results for the second quarter show strong improvement compared to Q2 of 2017.

  • Q2 Net Profit attributable to equity holders of the company of BD15.7M, up 45% from BD10.8M in 2017 and H1 Net Profit attributable to equity holders of the company of BD28.8M, an increase of 51% over BD19.0M in 2017.
  • Q2 Operating Profit of BD20.2M, up by 29% from BD15.7M in 2017 and H1 Operating Profit of BD40.5M, an increase of 35% from BD29.9M in 2017.
  • Q2 EBITDA of BD36.4M, up by 15% from BD31.7M in 2017 and H1 EBITDA of BD73.0M, an increase of 14% from BD64.0M in 2017.
  • Q2 Revenues of BD100.5M, growth of 10% from BD91.4M in 2017 and H1 Revenues of BD200.0M, an increase of 10% from BD181.1M in 2017.
  • Q2 EPS of 9.4 fils compared to 6.5 fils in Q2 2017, an increase of 45% and H1 EPS of 17.3 fils compared to 11.4 fils in 2017, a 51% increase.
  • The Board of Directors approved an interim cash dividend of 10 fils per share or 10% of paid up capital.

Group Financial Review

Batelco announced net profits attributable to equity holders of the company for the first six months of 2018 of BD28.8M (US$76.4M) up from BD19.0M (US$50.4M) for the corresponding period in 2017, an increase of 51%. Similarly, net profit attributable to equity holders of the company for Q2 2018 was reported at BD15.7M (US$41.6M), a 45% increase from BD10.8M (US$28.6M) for the corresponding period of 2017.

Operating profit for the quarter is up by 29% to BD20.2 (US$53.6M) from BD15.7 (US$41.6M) in Q2 2017; while year-on-year operating profits increased by 35% from BD29.9M (US$79.3M) in H1 2017 to BD40.5M (US$107.4M) in H1 2018.

For the six-month period, EBITDA increased 14% over the corresponding period of 2017 from BD64.0M (US$169.8M) to BD73.0M (US$193.6M) and EBITDA margin of 36%. EBITDA for the second quarter of 2018 stands at BD36.4M (US$96.6M) compared to BD31.7M (US$84.1M) in Q2 2017, representing an increase of 15%.

In line with the first quarter of 2018, revenues for the second quarter have increased by 10% over Q2 2017 from BD91.4M (US$242.4M) to BD100.5M (US$266.6M). Revenues for the first six months of 2018 were BD200.0M (US$530.5M) an increase of 10% when compared to BD181.1M (US$480.4M) revenues for the first six months of 2017. Revenues have been positively bolstered by strong performance at Batelco Bahrain and Umniah Jordan. In Bahrain, revenues were boosted by improvements in mobile and broadband services and in Umniah revenues were up in all revenue streams with notable growth in digital services and fixed broadband (Fixed LTE).

The Group’s balance sheet continues to be strong with total assets of BD913.2M (US$2,422.3M) as of 30 June 2018 compared to BD932.5M (US$2,473.5M) as of 31 December 2017. Net assets as of 30 June 2018 stand at BD501.1M (US$1,329.2M) compared to BD502.5M (US$1,332.9M) as of 31 December 2017. The Group’s cash and bank balances are a substantial BD152.6M (US$404.8M). Total Equity attributable to equity holders of the company is BD460.7M (US$1,222.0M) compared to BD461.9M (US$1,225.2M) as of 31 December 2017.

Earnings per share (EPS) are 9.4 fils for the second quarter compared to 6.5 fils in Q2 2017 resulting in half year EPS of 17.3 fils compared to 11.4 fils for half year 2017. The Board of Directors approved an interim cash dividend for shareholders of 10 fils per share or 10% of paid up capital for the six month period.

Batelco Chairman, Shaikh Abdulla bin Khalifa Al Khalifa, who announced the Half Year 2018 financial results following the meeting of the Board of Directors on July 19th at Batelco’s Hamala Headquarters, said that he was very pleased to report the pleasing set of financial results.

“We got off to very good start to the year and similar to the first quarter there has been double digit improvement year-on-year. Across our group of operations, our strategic plans are having a positive impact and our teams continue to work diligently to ensure that the needs of each location, with their specific requirements, are met.”

Financial and Operational Highlights

  H1 2018 H1 2017 Growth Q2 2018 Q2 2017 Growth
  BDM US$M BDM US$M % BDM US$M BDM US$M %
Gross Revenues 200.0 530.5 181.1 480.4 +10 100.5 266.6 91.4 242.4 +10
EBITDA 73.0 193.6 64.0 169.8 +14 36.4 96.6 31.7 84.1 +15
Operating Profit 40.5 107.4 29.9 79.3 +35 20.2 53.6 15.7 41.6 +29
Net Profit attributable to equity holders of the company 28.8 76.4 19.0 50.4 +51 15.7 41.6 10.8 28.6 +45
Subscriber Base 9.2 million 9.5 million -3      
Contribution to Revenues by International Operations 60% 59% +2      
Contribution to EDITDA by International Operations 51% 52% -2      

 

Group Operational Review

Batelco Group CEO Ihab Hinnawi said that he was very pleased to note that the momentum established in the first quarter of the year has continued with a second quarter of strong performances from a number of the Group’s operations, particularly Batelco Bahrain, Umniah in Jordan and Dhiraagu in the Maldives.

“Key priorities for the quarter have been ongoing improvement to the quality of mobile and fixed networks, combined with delivering a superior customer experience. Our efforts in this regard and our investment in new and upgraded infrastructure and customer centric initiatives have been rewarded by growing revenues and customer numbers for key services.”

The Group’s investment in fixed networks, particularly in Fibre across all OPCOs and Fixed broadband in selected markets is starting to pay back as evidenced by our revenue growth,” noted Mr. Hinnawi.

“In line with growing revenues, the Group’s total fixed broadband customer base has grown by 10% year on year, supported by a 21% increase in subscriber numbers in Bahrain, while in Jordan subscriber numbers are up by 76% and in the Maldives the customer base for Broadband is up by 63%.”

“We are continuing to strengthen our digital capabilities as part of our transformation strategy and strive to be innovative and responsive in everything we do to support our strategic imperatives,” Mr. Hinnawi added.

Batelco Bahrain Highlights

Batelco Bahrain CEO Mohamed Bubashait said that Batelco’s efforts in delivering key in-demand solutions for its customers was reflected in growing customer numbers for the first half of the year. Customer numbers for fixed line services have increased by 6% and fixed broadband subscriber numbers are up by 21%, year-over-year.

Among achievements during the second quarter, Batelco launched a fully integrated cloud-based digital education solution, which will empower educational establishments with innovative scalable technology.

“The new solution is in line with Batelco’s digitisation strategy and supports the Kingdom’s vision to empower digital transformation in the educational sector,” said Mr. Bubashait.

“Furthermore, in line with our commitment to nurture the development of digitisation and innovation within the communications sphere, Batelco Bahrain in partnership with Brinc MENA, a hands-on Internet of Things (IoT) hardware accelerator, officially launched Brinc-Batelco the region’s first technology hardware accelerator.

“Technology, which evolves at relentless speed, is hugely important in shaping all industry sectors and Batelco, as a leader in driving the development and implementation of digital solutions for Bahrain, continues to take a central role.”

International Highlights

At the end of the six-month period, 60% of Revenues and 51% of EBITDA were attributable to operations outside of Bahrain, compared with 59% of Revenues and 52% of EBITDA in the first half of 2017. Across the Group, a number of operations reported revenue growth and improved customer numbers.

  • Jordan (Umniah): Umniah continues to embrace the digital age, setting new milestones in customer experience and broadening its lineup of products and services to deliver true added value. Recently the Company was named the “Best Managed Security Services Provider” Partner of the Year by Fortinet, a global leader in cybersecurity solutions. Umniah achieved revenue growth of 19% year-over-year and broadband subscribers have increased by 76% over Q2 2017 and 9% over Q1 2018.
  • Maldives (Dhiraagu): Dhiraagu had a strong second quarter reporting a 10% growth in revenue compared to the same period in 2017, mainly driven by growth in mobile data, fixed broadband and enterprise. The company made substantial progress on its two major projects, FTTH and 4G expansion. FTTH was extended to 41 islands covering 68% of the population and DhiraaguTV service was extended to 26 islands. Dhiraagu completed its major goal of extending 4G coverage to 100% of the population. Year-over-year fixed broadband subscribers have increased by 63% and by 7% since the first quarter of 2018.
  • Channel Islands, Isle of Man, South Atlantic & Diego Garcia (Sure Group): Q2 2018 has seen sustained growth in revenues for the Sure Group as customers continue to be attracted to market leading mobile and fixed networks combined with high customer satisfaction and a growing portfolio of services for Enterprise customers, despite increasing operating and economic challenges in the South Atlantic. Accelerating growth in the Isle of Man is driven by an expanding local team of Enterprise professionals, with the continued expansion of the business fibre network and the take up of next generation voice services. This approach has resulted in a 5% increase in mobile subscribers compared to Q2 2017, a 3% increase in broadband subscribers and growing Enterprise revenue and customers. In the South Atlantic Sure’s roll out of the new 4G mobile network continues in the Falkland Islands with a full commercial launch expected in Q3, whilst in Diego Garcia the license renewal process continues with a result expected later in the year.
  • Kuwait (Quality Net): Qualitynet remains market leader in the Fixed Data Communication and Internet Services and ICT industry in the State of Kuwait. During the quarter, the company gained two large lucrative customer contracts and won several awards, notably the “Best Telecommunications Provider in Kuwait”, awarded by Arabian Business for the second time in a row.

Looking Forward

Before concluding the meeting, Batelco Chairman Shaikh Abdulla took the opportunity to extend appreciation to his predecessor Shaikh Mohamed bin Khalifa Al Khalifa and to senior management throughout the Group.

“On behalf of the Board of Directors and senior management I would like to offer thanks to Shaikh Mohamed for his efforts in supporting the implementation of strategic plans for the Batelco Group of companies during his tenure. Additionally, I am thankful to senior management in Bahrain and throughout the Group for their warm welcome and words of support,” said Shaikh Abdulla.

“I have already noted that Batelco has great strengths based on human resources and superior infrastructure which positions us very well to address competitive challenges and avail of opportunities.”

“Based on our achievements so far this year, we are motivated and confident that we have the correct strategies in place to build on our success. Key amongst our aims is to continue to play our part in driving the growth of digital solutions and deliver an enriched digital experience for our customers across the Group and to achieve attractive returns to our shareholders,” Shaikh Abdulla concluded.

This press release, along with the full set of financial statements, is available on the Bahrain Bourse website and on Batelco Group website, www.batelcogroup.com