Bahrain’s Batelco Q2 net profit slips on competition, one-off costs
The telecoms company posted a 22.4 percent drop in its second-quarter profit
Bahrain Telecommunications Co (Batelco) posted a 22.4 percent drop in second-quarter profit on Sunday, according to Reuters calculations, hurt by continued intense competition in core markets and one-off adjustments.
The former monopoly made a net profit of 10.4 million dinars ($27.6 million) in the three months to June 30, down from 13.4 million dinars in the year-earlier period.
Batelco didn't provide a quarterly breakdown so Reuters based its calculations on its first-half financial statement.
The firm also has not provided details of the one-time cost it incurred beyond referencing it in the first-half statement, while heavy competition has been impacting its earnings for a number of years - this was the 17th quarter in the last 20 in which it has reported declining profit.
In Bahrain, its core market, Batelco competes with units of Kuwait's Zain and Saudi Telecom Co as well as about 10 internet providers.
Seeking to offset declining domestic profit and revenue, in April 2013 Batelco completed the $570 million purchase of Cable & Wireless Communications' Monaco and Islands Division, although some of this deal subsequently fell foul of regulators.
Batelco also owns Jordanian telecoms operator Umniah, 27 percent of Yemeni mobile operator Sabafon, minority stakes in internet providers in Kuwait and Saudi Arabia and is also active in Egypt.
In total, the firm earned 57 percent of its revenues outside of Bahrain in the first half of 2014, a figure which helped the firm offset "the impact of ongoing and aggressive competition at home." according to Shaikh Hamad bin Abdulla al-Khalifa, chairman of Batelco.
Batelco's revenue in the first six months of 2014 was 194.6 million dinars, up 14 percent year-on-year, the statement said, while its subscriber base stood at 9 million customers on June 30, up 4 percent on the same point of 2013.
The operator said its board was proposing to pay a cash dividend of 0.01 dinar per share for the period. This is in line with the amount paid in the corresponding period last year, according to Thomson Reuters data.
In April, Batelco hired Alan Whelan as chief executive, nearly 11 months after former CEO Sheikh Mohamed bin Isa al-Khalifa quit.