Batelco BH Delivers Record Performance and Continues to Invest in the Kingdom’s Infrastructure and Services

Batelco Group Chairman Shaikh Hamad bin Abdulla Al Khalifa said that Batelco's strategy in delivering the most comprehensive range of quality mobile and broadband products and services at competitive prices in Bahrain, contributed to the Company’s most impressive overall performance and record breaking financial results which were announced at a Board meeting held at Batelco’s Hamala Headquarters, January 21st.

Batelco Group delivered its highest ever net profit of $276.4 million (BD104.2m) an increase of 2.7% compared to last year’s earnings, even though the Company booked an impairment provision of $3.5m (BD1.3m) relating to non-operating investments.

Year-on-year gross revenues grew by 9% to $846.4million (BD 319.1m) and net revenues grew by 10% to $666.8 million (BD251.4m). Earnings per share rose to 72.4 fils from 70.5 fils in 2007.

This improvement was achieved by continued top-line growth from new products and services, competitive offers and promotions and, strong focus on cost containment and productivity improvement across all operations including Bahrain. Year on year growth in Group expenditure reduced from 30% reported during the first half of 2008 to 11% by year end.

"We have maintained our market leadership in Bahrain and continued to grow across the Middle East region despite the highest competitive intensity in every market we operate," said Shaikh Hamad.

"Our Board of Directors will recommend to the General Assembly of Shareholders a cash dividend of $191 million (BD72m) representing the equivalent of 50% of the paid-up capital – at a value of 50 fils per share, of which 20 fils per share was announced and paid in July 2008. The remaining 30 fils will be paid after the Annual General Assembly in February."

Chief Executive Peter Kaliaropoulos said that while Batelco’s strategy includes growth and diversification in new overseas markets, the operation in Bahrain is most critical to Batelco's success for the future.

"Bahrain's residents and businesses are already benefiting from the most significant competitive environment in the region. There has been an unprecedented range of brands, choices and services in the market with the widest range for domestic and international calls, mobility services and broadband since the industry deregulated in 2002. Bahrain has possibly the most advanced infrastructure in the region based on New Generation IP technology, 3.5G mobility, Wimax, satellite and diverse international cable systems. The customers are in a great position to select their trusted brand of choice," Mr. Kaliaropoulos said.

Batelco continued to focus on delivering value to its Bahrain customers in 2008.

"Throughout the past year our customers in Bahrain benefited from numerous promotions offering better value for mobile, broadband and IDD services without any compromise on quality."

“We were the first telecommunications company in the GCC to launch the new O-net Mobile Broadband device, the smallest, sleekest, lightest and most technologically advanced Mobile Broadband USB modem in the world. The device delivers wireless broadband mobility with superior speeds of 7.2 Mpbs - the fastest available in the Kingdom – and boosts Batelco’s extensive variety of world-class products and services,” Mr. Kaliaropoulos explained.

“For our frequently travelling customers we introduced Batelco World Freedom, the service that enables customers to receive calls and SMS free of charge while roaming in 21 countries.”

“We have successfully completed our NGN (Next Generation Network) project which gives Bahrain the honour of being the first country in the world with complete countrywide broadband and delivers our promise to make internet access readily available to all residents of the Kingdom,” Mr. Kaliaropoulos continued.

“Batelco's strategy is to continue investing in new infrastructure and innovative technology for Bahrain and ensure the Kingdom remains the most desirable IT and Communications hub across the region. In 2008, $108.5 million (BD 40.9m) was committed for capital expenditure in Bahrain.

Batelco's customer base continues to grow in the Kingdom. Batelco’s customers now include 767,000 mobile users, 205,000 fixed line customers and 82,000 Broadband customers.

Award Winning Performance

Batelco's efforts have not gone unnoticed in the past year. Batelco won the award for Best Customer Care in the Middle East at the 2nd annual Telecoms World Awards held in Dubai in November. Batelco also won two awards for the introduction and implementation of new technologies at the inaugural SAMENA Regional Awards 2008 which took place in Jordan in November. Additionally, Batelco was placed 1st in the Middle East and 2nd in the World for their new telephone bills layout, at the 2008 Printing Innovation with Xerox Imaging (PIXI) Awards, held in Chicago, USA.

Mr. Kaliaropoulos said that the importance of such awards is that they highlight the efforts and commitment of Batelco employees who strive for excellence at all times.

'We are delighted with the innovation and passion for transformation contributed from our employees in Bahrain. Talent and determination contributed to Batelco’s recognition across the region and overseas and we are very proud of the calibre of people,' he added.

A Visionary Strategy to Expand

As per its expansion strategy, Batelco's continued growth in 2008 is also the result of a strong performance by its operations beyond the shores of Bahrain. The Company’s expansion strategy has resulted in over 4.3 million mobile customers from its operations in Bahrain, Jordan and Yemen representing a 22.8% year on year increase.

Furthermore, Batelco announced this week its latest overseas acquisition with the purchase of a 49% shareholding in S Tel Limited (S Tel) in India.

Batelco's overseas operations contributed 33% of gross revenues and 19% of EBITDA. All overseas operations are profitable, each delivering double digit net profit growth for 2008.

Our people

"We provided ongoing development opportunities for our staff through training and development programmes implemented by our in-house training team at Batelco's Knowledge Hub, which has had its busiest year to date," stated Batelco Group Human Resources General Manager Shaikh Ahmed Al Khalifa.

"Blended e-Learning and instructor led courses, at an investment of $3.3 million (BD1.24m) in 2008, provided a balanced choice of learning and re-skilling opportunities."

“We delivered 596 training activities for 1300 staff, representing 82% of employees. Our eLearning programme continues to thrive and during 2008, 259 employees completed 502 eLearning courses."

"A Next Generation Network training laboratory was officially inaugurated at the Knowledge Hub in November. Established in cooperation with Huawei, the Laboratory is being used to train Batelco’s engineers in order to enhance their knowledge and ensure our technical and network engineers are amongst the best in the region," added Shaikh Ahmed.

Batelco Chairman Shaikh Hamad said that Batelco had touched the lives of many of Bahrain’s less fortunate residents through the Company's annual sponsorship and donations programme.

"During 2008, we committed over $10.6 million (BD4m) towards a diverse range of worthwhile initiatives. Recipients included Al Hekma Society for the Retired, King Hamad Schools of the Future project, BDF Cardiac Centre and the Crown Prince Scholarship Fund. We also launched an ambitious project under the theme Batelco Live to provide fully equipped computer labs and free internet in villages throughout the Kingdom."

"On behalf of the Board of Directors I extend thanks to all Batelco employees in Bahrain and abroad for their collective contribution to continued growth of our business, ongoing innovation and above all for ensuring we always place the needs of our customers first. Their efforts assisted in delivering a sound performance in 2008 across all our businesses and had a direct impact on our results. The Board and Management are grateful," Shaikh Hamad concluded.

 

January 21,2009