Bahrain's Batelco sees Q3 profit drop by 25%

Overseas markets now account for 40% of Batelco Group's revenues
Sheikh Hamad Bin Abdulla Al Khalifa said customer numbers grew across Batelco Group.
Sheikh Hamad Bin Abdulla Al Khalifa said customer numbers grew across Batelco Group.

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Bahrain Telecommunications Co (Batelco) said on Tuesday that nine-month net profit fell to BD43m ($114m) from BD57m for the year-earlier period, a 25% drop.

The telco saw gross revenues of BD228m for the period, it said in a statement.

Batelco's total customer base increased to 7.4 million, an increase of 5% on the previous quarter, it added.

The statement said 40% of Group revenues were now sourced from markets outside Bahrain.

The decline in net profit was attributed to "aggressive competitive conditions in Bahrain and a number of one-off adjustments".

The company said it experienced a 12% drop in gross revenues versus the previous year in its home market due to increased competition and lower tariffs.

"Redundancy payments for a higher number of employees and an adjustment of mobile data revenues contributed to the low Q3 profit result," the statement said.

Batelco chairman, Sheikh Hamad Bin Abdulla Al Khalifa, said: "The first nine months of the year continued to be marked by consistently strong cash generation and growing customer numbers across the Group.

"A number of one-off adjustments resulted in more pronounced decreases than would otherwise have been the case. Still, margins are healthy and these one-off charges help position the Group in executing its strategy of revenue enhancement, cost optimisation and achieving scale."

He added: "We continue to look at ways to further build our position in the MENA region and other regional markets.

"We have a strong balance sheet and cash position which we are working actively to put to use... While seeking both organic growth and acquisitions, we are also implementing initiatives aimed at maximising synergies across our existing businesses."

Batelco said it has launched a restructuring programme that will generate BD20m of cost savings annually from 2014 onwards, particularly in Bahrain where ever increasing competition has been seen in what has become a mature mobile market.

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