**Profits up by 13% to BD49.3 Million**

–       Subscriber Base Grows by 6% year on year to over 9.5 Million

–       Overseas Operations Boost Revenues and EBITDA

Manama, Bahrain:Batelco Group (Ticker: BATELCO), the regional Telecommunications Group with operations across 14 countries, today announced its results for the twelve-months ended 31 December 2014 (“the year”). Revenues and EBITDA were positively boosted by the Group’s Island Portfolio with its results consolidated for a full year in 2014 compared with only 9 months in 2013.

Financial and Operational Highlights 

• Gross Revenues of BD389.7M (US1,033.7M) for the year, an increase of 5% YoY;
• EBITDA of BD144.7M (US$383.8M) representing a 37% margin for the full year, an increase of 20% YoY;
• Consolidated Net Profit of BD49.3M (US$130.8M), an increase of 13% YoY;
• Markets outside of Bahrain contribute 58% of revenues and 55% of EBITDA;
• Subscriber base of over 9.5 million, an increase of 6% YoY mainly impacted by increased mobile and broadband customer numbers across the Group;
• Recommended dividends of BD41.58M (US$110.29M) for the full year, equivalent to 25 fils per share, marking the Group’s ongoing ability to deliver strong value and returns to shareholders; and
• Substantial cash and bank balances of BD150.2M (US$398.4M)

For the full year 2014, Batelco Group reported Net Profits of BD49.3M (US$130.8M) from BD43.6M (US$115.6M) for 2013, an increase of 13% year over year. Profits for the year were boosted by the inclusion of consolidated full year reporting for Batelco’s Islands’ Portfolio, as well as increased subscriber numbers in the home market and a number of the Group’s operations. Cost reduction programmes across the Group, with substantial savings realised in Bahrain, also contributed to the double digit increase.

Net profits for the fourth quarter of 2014 increased by 23% compared to Q4 2013. However, there was a 47% reduction in quarterly profits in Q4 versus Q3 2014. Quarterly profits have declined mainly due to one off provisions.

EBITDA for the year was BD144.7M (US$383.8M), representing a healthy margin of 37%, versus EBITDA of BD120.7M (US$320.2M) and a margin of 33% for 2013. The increase in EBITDA was attributed to the positive impact of Batelco Group’s overseas operations and improved performance in the home market due to cost containment initiatives. In line with net profits, EBITDA was down by 16% on the previous quarter, but up 3% from Q4 of last year.

The Group’s Gross Revenues stood at BD389.7M (US$1,033.7M) for the year versus BD370.6M (US$983.0M) in the previous year, an increase of 5% year over year. Q4 2014 Gross Revenues were 2% lower over Q4, 2013 while reflecting no change since the last quarter. The Group’s revenues continue to be affected by fierce competition across the Group, mainly in voice services.

Operating Profits increased by 24% YoY from BD62.8M (US$166.6M) in 2013 to BD77.7M (US$206.1M) in 2014. Q4 2014 operating profits were down by 30% on the last quarter but remained stable versus Q4 2013.

The Group ended the year with a strong balance sheet and financial position. As of 31 December 2014, net assets were BD579.1M (US$1,536.1M) with substantial cash and bank balances of BD150.2M (US$398.4M) and net debt of BD26.3M (US$69.8M).

The Group also reported that the Board of Directors would recommend to the Annual General Assembly of Shareholders a full year cash dividend of BD41.58M (US$110.29M), at a value of 25 fils per share, of which 10 fils per share was already paid during the third quarter of 2014 with the remaining 15 fils to be paid in cash following the AGM in March.

Batelco Group Chairman, Shaikh Hamad Bin Abdulla Al Khalifa, announcing the 2014 financial results following a meeting of the Board of Directors on 16^th February at the Group’s Bahrain Headquarters, said:

“We are very pleased to announce this sound set of financial results for 2014 ending the year on a strong note with revenues, EBITDA and net profit up on last year’s figures. 2014 was marked by strong cash generation and growing customer numbers across the Group, particularly in the home market of Bahrain and also at Umniah, Jordan and SURE CIIM (Channel Islands, Isle of Man). Our overseas operations, which become increasingly more central to our strategy, continue to deliver in line with our expectations.”

“We are also pleased to note that there has been an increase in net profit YoY in our home market of Bahrain where the Group continues to focus on strengthening its performance.”

“Our strategy and on-going efforts to achieve operational excellence and growth ensures the Group provides shareholders with excellent dividend yields, among the best in our industry region wide. We will continue during 2015 to deliver the best value for shareholders,” Shaikh Hamad added.

Growth of Mobile Customer Base 

Batelco Group CEO Alan Whelan stated, “Operationally Batelco Group is pleased with its ongoing ability to make progress in some very tough competitive markets resulting in good financial results and growth in customer numbers. The total subscriber base has grown to over 9.5 million across the 14 geographies of operation, representing 6% growth year on year. The growth in numbers is mainly attributable to the take up of mobile and broadband services due to the ongoing and increasing demand for data solutions that can be today considered a necessity by many. ”

“We have been working closely across all our operations on pooling Group resources, technology and expertise in order to enhance competitiveness and performance, and we are very pleased with the progress made.”

“We will continue to focus on executing the strategy outlined to our shareholders at last year’s AGM, investing in both strengthening our existing networks, rolling out our Fibre network and growing our subscriber base through the delivery of world class solutions,” Mr. Whelan added.

Overseas Operations Highlights

 For the year, contributions from operations outside of Bahrain increased both as a percentage of revenues and EBITDA. At year-end 2014, 58% of revenues and 55% of EBITDA were sourced from overseas markets with overall performance particularly enhanced by good performances at the companies under the SURE umbrella and Dhiraagu in the Maldives.

Jordan: Umniah continues to demonstrate a significant presence in the Jordanian telecom market due to its strong strategy by offering high quality integrated services, with the best value, while keeping abreast with sector developments and customers’ various needs and expectations. During 2014, Umniah’s mobile subscribers increased marginally to over 2.7 million. Its broadband subscribers witnessed an 18% growth YoY and 4% since Q3 2014, due to Umniah’s upgraded infrastructure and expansion of its coverage across Jordan.

Kuwait:Batelco Group holds a 90% shareholding in Qualitynet, which remains the leading Data Communications and Internet Services provider and total ICT solutions provider in Kuwait. In 2014, the company maintained market share and position delivering steady results and ending the period with more than 40,000 customers. Qualitynet successfully entered the regional ICT market in 2014.

Channel Islands and Isle of Man:  During Q4 2014 Sure CIIM commenced preparations for the rollout of its new 2, 3 and 4G network across the three islands with a completion date for Guernsey and Jersey by the end of March 2015. The company has now successfully integrated the recently acquired Foreshore data center business with the Sure Jersey operations. Positive trading in retail boosted subscriber numbers to end the year 3% up YOY in mobile and 15% up YOY in Broadband. In Enterprise services, Sure continued its good momentum closing and installing several large contracts.

South Atlantic & Diego Garcia:  Sure S&D finished 2014 strongly and as planned across all of its operations. Investments in Wi-Fi and mobile coverage and international bandwidth made earlier in the year contributed as expected to the final quarter’s performance as did the continued support, development and sale of a product in conjunction with Sure CIIM.

Maldives:Dhiraagu closed the year delivering improved trading performance in comparison to the third quarter, mainly attributed to higher seasonal roaming and strong enterprise and data revenues. The launch of 4G LTE services in Greater Male’ and various inhabited islands, and the subsequent growth in mobile customer numbers driven by the superior speeds, provides the widest reach covering 44% of the population. Several marketing initiatives including new data add-ons, revamp of mobile packages and targeted promotional offers were launched to offer an enhanced service to its customers.

Other JVs:Sabafon (Yemen), in which the Group has a 26.942% shareholding, maintained steady results in 2014 despite increased political challenges in Yemen and ended the year with more than 4.8 million users, an increase of 11% since 2013. Atheeb (Saudi Arabia), in which Batelco holds a 15% stake, reported a decline of 28% year-over-year in subscriber numbers and 12% since the last quarter due to intense competition in broadband services.

Batelco Bahrain – Investing to Deliver Superior Communication Solutions

Batelco Group’s CEO Mr. Whelan continued by saying, “On the home front, we have sharpened our focus to ensure our customers’ needs are met across both the consumer and business segments, and this has been fruitful as reflected in increased customer numbers and the retention of our position as Bahrain’s leading integrated solutions provider.”

“Our significant investment in new and upgraded networks continues. Our major 4G Network enhancement project in collaboration with Ericsson, which began during 2014, is ongoing and will lead to the provision of faster mobile Broadband connections and superior voice quality, plus a set of new services and offers.”

“Similarly, our Fibre Network expansion programme is making excellent progress and services are now available in a wide number of areas with new locations coming on line continuously. The service features the highest dedicated, stable superfast download in Bahrain with speeds up to 150Mb.”

“Our efforts have resulted in growing customer numbers, with mobile subscribers up by 4% year-over-year, to reach over 900,000 and Broadband subscribers up by 15% YoY. Fixed line customer numbers remained steady with a marginal increase of 1% since 2013. This is in line with a growing shift toward wireless and mobile technologies. We will continue to invest in our networks and anticipate further growth in our overall subscriber numbers going forward as customers demand more sophisticated services,” Mr. Whelan elaborated

“The positive financial and operational results also reflect a focus on delivering top quality products and services throughout the year for both the business and consumer sectors, with best value, great offers and prize winning promotions. Bahrain’s residents have shown a love for innovation and design and a passion for new and emerging technology. Therefore we are determined to increase the breadth and depth of the solutions we offer our customers and remain committed to delivering further efficiencies during 2015 to enhance our competitive advantage,” he added.

Achievements and Commitment to Local Communities

Batelco’s customer centric approach is gaining recognition locally and regionally as was demonstrated by Batelco being named as the Customer Service Provider of the Year at the annual CommsMEA Awards in Dubai in December 2014. The Company also won the Best Contact Centre Award at the Customer Experience Management (CEM) in Telecoms: Middle East Summit Awards, in recognition of new mechanisms and systems developed by Batelco which have raised customer satisfaction levels significantly. During 2014, Batelco also took home the eEconomy Award at the Bahrain International eGovernment Forum and was presented with the ICT Company of the Year Award at MEET ICT 2014 due to Batelco’s extensive ICT solutions portfolio which provides a one-stop-shop solution for all information, communication and technology needs in the Bahrain business market.

Additionally, Batelco was also recognised by a number of its key partners, including Cisco which awarded Batelco with Gold Certified Partner Status and Avaya which named Batelco as a Gold Avaya Connect Channel Partner in Bahrain.

Furthermore, Batelco’s commitment to Corporate Social Responsibility continued to make a difference throughout 2014. More than BD2M was committed to benefit sports, social, health and education related initiatives and charitable organisations in the Kingdom.

Moving Forward with Enthusiasm

Before concluding the meeting, Batelco Chairman Shaikh Hamad stated that the Board of Directors and executive team were very pleased with the progress made during 2014 and the solid foundations laid for moving forward and growing the Group’s operations, subscriber base and presence in all markets.

“Our achievements and ongoing success are a reflection of the strong leadership by our executive teams, supported by tremendous efforts by our employees across all markets to retain our customers’ loyalties and improve the way we develop and deliver services.

“Our management teams across our 14 geographies, supported by tremendous efforts by our employees across all markets, have been working solidly throughout the year to drive growth and diversification in their respective markets. This has put us in a strong position and gives us a stable platform to work from. The continuous focus by all our people on improving the way we serve our customers coupled with financial discipline, will enable us to meet our long term objectives,” he said.

“We remain focussed on our customers at home and overseas to ensure our services exceed their expectations. Furthermore, we also remain focussed on strengthening our performance to better serve all Batelco Group stakeholders,” concluded Shaikh Hamad.