Batelco Group Announces 2018 Third Quarter Financial Results

November 1, 2018

Batelco Announces Profit of BD46.0M for First Nine Months of 2018

Batelco (Ticker: BATELCO), the regional telecommunications group with operations across 14 countries, today announced its financial results for the third quarter of 2018, the three month period ended 30 September 2018 (Q3) and for the first nine months of 2018. In line with the promising figures announced for the first six months of the year reported in the H1 2018, the results for the third quarter show strong improvement compared to Q3 of 2017.

Financial Highlights

  • Q3 Net Profit attributable to equity holders of the company of BD17.3M, up 179% from BD6.2M in 2017 and Net Profit for the nine-month period attributable to equity holders of the company of BD46.0M, an increase of 83% over BD25.2M in 2017.
  • Q3 Operating Profit of BD20.0M, up by 78% from BD11.3M in 2017 and nine-month period Operating Profit of BD60.5M, an increase of 47% from BD41.2M in 2017.
  • Q3 EBITDA of BD36.3M, up by 33% from BD27.2M in 2017 and nine-month period EBITDA of BD109.2M, an increase of 20% from BD91.2M in 2017.
  • Q3 Revenues of BD101.5M, growth of 5% from BD96.5M in 2017 and Revenues for the nine-month period of BD301.5M, an increase of 9% from BD277.6M in 2017.
  • Q3 EPS of 10.4 fils compared to 3.7 fils in Q3 2017, an increase of 179% and EPS for the nine-month period of 27.7 fils compared to 15.2 fils in 2017, a 83% increase.

Group Financial Review

Batelco announced net profits attributable to equity holders of the company for the first nine months of 2018 of BD46.0M (US$122.0M) up from BD25.2M (US$66.8M) for the corresponding period in 2017, an increase of 83%.  Similarly, net profit attributable to equity holders of the company for Q3 2018 was reported at BD17.3M (US$45.9M), a 179% increase from BD6.2M (US$16.4M) for the corresponding period of 2017.

Operating profit for the quarter is up by 78% to BD20.0M (US$53.1M) from BD11.3M (US$30.0M) in Q3 2017; while year-on-year operating profits increased by 47% from BD41.2M (US$109.3M) in 2017 to BD60.5M (US$160.5M).

For the nine-month period, EBITDA increased 20% over the corresponding period of 2017 from BD91.2M (US$241.9M) to BD109.2M (US$289.7M) and EBITDA margin of 36%.  EBITDA for the third quarter of 2018 stands at BD36.3M (US$96.3M) compared to BD27.2M (US$72.1M) in Q3 2017, representing an increase of 33%.

In line with the first two quarters of 2018, revenues for the third quarter have increased by 5% over Q3 2017 from BD96.5M (US$256.0M) to BD101.5M (US$269.2M).   Revenues for the first nine months of 2018 are BD301.5M (US$799.7M) an increase of 9% when compared to BD277.6M (US$736.3M) revenues for the first nine months of 2017. Revenues have been positively bolstered by continued strong performance at Batelco Bahrain, Umniah in Jordan and Dhiraagu the Group’s operation in the Maldives. Revenues were mainly boosted by improvements in broadband and adjacent services, with growing broadband subscriber bases in all three locations.

The Group’s balance sheet continues to be strong with total assets of BD909.0M (US$2,411.1M) as of 30 September 2018 compared to BD932.5M (US$2,473.5M) as of 31 December 2017. Net assets as of 30 September 2018 stand at BD497.8M (US$1,320.4M) compared to BD502.5M (US$1,332.9M) as of 31 December 2017. The Group’s cash and bank balances are a substantial BD151.2M (US$401.1M). This includes the impact of the interim dividend of 10 fils per share announced and paid during the quarter.

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 10.4 fils for the third quarter of 2018 compared to 3.7 fils in Q3 2017 resulting in EPS of 27.7 fils for the nine-month period compared to 15.2 fils for the corresponding period of 2017.

Batelco Chairman, Shaikh Abdulla bin Khalifa Al Khalifa, announced the Third Quarter 2018 financial results following the meeting of the Board of Directors on November 1st  at Batelco’s Hamala Headquarters.

“The Board of Directors is pleased with Batelco’s performance for the first nine months of this year. The Group has witnessed a positive performance reflecting Batelco Group’s overall strategic plans, and will continue to work at the same pace in all locations, in order to achieve the desired results for the full year.

“Achieving shareholder returns and increasing future benefits is a priority for the Board of Directors as well as sustaining the long-term success of the company. Accomplishing these results for the first nine months of 2018 is a positive indicator of the effectiveness of our strategic plans and serves as a catalyst for continued growth.”

Financial and Operational Highlights  

  Nine Month Period Ended 30.09.2018 Nine Month Period Ended 30.09.2017 Growth Q3 2018 Q3 2017 Growth
Gross Revenues 301.5 799.7 277.6 736.3 +9 101.5 269.2 96.5 256.0 +5
EBITDA 109.2 289.7 91.2 241.9 +20 36.3 96.3 27.2 72.1 +33
Operating Profit 60.5 160.5 41.2 109.3 +47 20.0 53.1 11.3 30.0 +78
Net Profit attributable to equity holders of the company 46.0 122.0 25.2 66.8 +83 17.3 45.9 6.2 16.4 +179
Total comprehensive income attributable to equity holders of the company 38.8 102.9 34.2 90.7 +13 16.4 43.5 9.3 24.7 +75
Subscriber Base 8.7 million 9.6 million -10      
Contribution to Revenues by International Operations 59% 59%      
Contribution to EDITDA by International Operations 52% 56% -7      


Group Operational Review

Batelco Group CEO Ihab Hinnawi said that the successful implementation of the Group’s transformational strategy and investment in Fixed LTE, Fibre and Digital solutions across all operations has resulted in strong revenue and EBITDA growth.

“We continue to reap the fruit of our efforts and have sustained the momentum established in the first half of this year with strong performances in the third quarter, particularly at Batelco Bahrain, Umniah in Jordan and Dhiraagu in the Maldives.”

“Increased customer numbers for Broadband services have contributed significantly to the growing revenues with year-on-year growth of 9% in the total Broadband base. Year-on-year, fixed Broadband customer numbers are up by 16% in Bahrain, while in Jordan subscriber numbers are up by 49% and in the Maldives up by 42%.”

“Our key priorities include maintaining a sharp focus on enhancing our digital services and continuing to grow and evolve our adjacent services, while striving to make great improvements to the experience we deliver to our customers,” said Mr. Hinnawi.

As we near the end of another year, we will continue to build on our strategic imperatives, aligning all areas of our business across the whole Group to build on the Group’s synergy,” he added.

Batelco Bahrain Highlights

Commenting on the Group’s performance in Bahrain, Batelco Bahrain Chief Executive Officer Mohamed Bubashait said, “The results achieved by Batelco Bahrain came as a result of the strategy set by the company at the beginning of the year focussing on customer experience, innovation, diversification of income sources, strategic partnerships, and enhanced corporate identity.”

“Efforts have been made to create a work environment that develops talent and enables creativity. This improvement has led to the delivery of innovative solutions, such as bwallet, the leading electronic portfolio in the Kingdom of Bahrain.”

“Investment in the digital infrastructure and cloud-computing environment, which is the future of the telecommunications sector in the region and the world, has also been targeted. A new data centre, which will be opened before the end of the year, has been completed and an agreement has been signed to build another data centre at the company’s headquarters.”

“This strategic move comes as a result of the company’s work to strengthen relations with its key partners and work together to achieve common strategic objectives.” “Focusing on the company’s customers and providing them with an exceptional experience is a key focus of the company’s activities, including business, social responsibility and corporate identity,” Mr. Bubashait added.

International Highlights

At the end of the nine-month period, 59% of Revenues and 52% of EBITDA were attributable to operations outside of Bahrain, compared with 59% of Revenues and 56% of EBITDA in the first nine months of 2017.  Across the Group, a number of operations reported revenue growth and improved customer numbers.

  • Jordan (Umniah): Umniah continues to set new milestones in the Jordanian telecommunications market through its support of the education sector. The company recently worked with the Ministry of Education on preparing and developing the first online pilot electronic exam in the Kingdom as part of the General Certificate of Education for high school students that is expected to cater to approximately 27,000 students.  Umniah achieved revenue growth of 16% year-over-year and broadband subscribers have increased by 49% over Q3 2017 and 6% over Q2 2018.
  • Maldives (Dhiraagu): Dhiraagu is proud to be celebrating 30 years in connecting the Maldives through telecommunication. During the third quarter, the company extended its fibre broadband service to 70% of households and expanded Dhiraagu TV to new islands.  Dhiraagu also delivered “Digital Schools”, a key ICT project for the Ministry of Education that provided connectivity to all government schools in the country.  The company was recognized by Rebrand 100® Global Awards 2018 as one of the most effective 100 brand transformations of 2017 and received the “Social Responsibility & Environment Awareness Award” at the Maldives Business and Customer Experience Awards 2018.  Year-over-year fixed broadband subscribers have increased by 42% and by 8% since the second quarter of 2018.
  • Channel Islands, Isle of Man, South Atlantic & Diego Garcia (Sure Group): Strong mobile market share growth continued in the Isle of Man during 2018. In the Channel Islands Sure received the accolade, from the local regulator, of having the most satisfied customers of any network operator.  In the South Atlantic Falklands Sure launched 4G LTE services completing a major infrastructure investment and upgrade.  In Diego Garcia Sure was granted a new 11 year operating license which will provide Sure with exclusivity over commercial communication services including broadband, mobile, leased lines, international voice, data communication and public Wifi.  Q3 2018 saw Sure’s mobile and broadband subscribers increase by 7% and 3% respectively over the same period last year.
  • Kuwait (Quality Net): Qualitynet continues to diversify its product offering and deliver new solutions to the market. This quarter the company cemented its position as a unified communication provider through the successful implementation of various contact center projects for several large financial institutions in the country.

Looking Forward

Before concluding the meeting, Batelco Chairman Shaikh Abdulla said that it is important for the Group’s operations to strengthen their positions in their respective markets and continue to play a central role in growing strong digital economies, through investment in delivering the latest technologies.

“It is crucial to remain focussed on improving the experience of our customers; meeting their needs and staying ahead of competitors by delivering the latest products and services is always top of our priorities.”

“On behalf of my colleagues on the Board, I extend appreciation to all teams across our operations for their efforts that have contributed to the strong set of financial results, and encourage all to continue to build on this strong platform to complete the year 2018 on a high note,” Shaikh Abdulla concluded.