Over $152m cash windfall for Batelco shareholders

Batelco Group CEO, Shaikh Mohamed bin Isa Al Khalifa, conducting a presentation during the AGM
The overwhelming majority of 83% of Batelco Group shareholders on Wednesday approved a full year cash dividend of BD57.6million ($152.8million), which represents a 72% payout at a value of 40 fils per share.

The Group had already paid 20 fils per share during the third quarter of 2011 with the payment of the remaining 20 fils per share expected on March 6, 2012.

The Group’s 31st AGM, which was held at its Hamala headquarters, was attend by 83% of the total shareholding of the Group, company directors, senior management, staff and was presided over by the Chairman of the Board, Shaikh Hamad bin Abdulla Al Khalifa and Group CEO, Shaikh Mohamed bin Isa Al Khalifa.

“2011 marked another year of solid financial and operating performance for Batelco. Throughout the year we successfully executed our strategy and delivered results in line with the guidance and expectations set for our shareholders early in 2011. We are especially pleased, however, that our solid financial performance enabled us once again to deliver a substantial dividend to our shareholders, totalling BD57.6million ($152.8million), as recommended by the Board of Directors and approved by our shareholders here today. This represents a 72% payout and continues to see the Group rank among the top regional telecommunications companies in terms of dividend yields and comparative shareholder returns,” Shaikh Hamad Bin Abdulla Al Khalifa, Group Chairman, said.

The Group reported net profits of BD80 million ($212.2million) versus BD86.8 million ($230.2million) for 2010, representing a decline of 8%. EBITDA for the year was BD126 million ($334.2million), representing a 39% margin, versus EBITDA of BD146.2million ($387.8million) for 2010. The Group’s Gross Revenues stood at BD327million ($ 867.4million) for the year, down 4% from BD340.3million ($902.7million) in the previous year.

“We were also pleased with the strength of our balance sheet at year end. As of 31 December 2011, Batelco Group was free of debt and had significant cash and bank balances of BD107.9million ($286.2million) an increase of 24% year on year. Our ability to continue to pay substantial dividends and even further grow our cash and bank balances is the result of the effective management of our operations and strong cash flow generation, which in 2011 exceeded the guidance we had provided earlier in the year. The overall financial and operational health of the Group was also underscored in 2011 by our having received Investment Grade Credit Ratings during the fourth quarter from Fitch and Standard & Poor’s Ratings Services, two of the world’s leading credit ratings agencies. These were the first public credit ratings issued to the Group, which further enhance our position and ability to pursue even greater profitable growth in the years ahead.”

Shaikh Mohamed bin Isa Al Khalifa, Group CEO, presented highlights of the Group’s financial and operating performance for the year to the General Assembly, emphasizing the Group’s success in effectively balancing efforts to maintain market leadership at home whilst building its operations and scale in key growth markets overseas.

“Operationally we are proud of the performance of the Group companies across the MENA region and India during 2011. In line with a key pillar of our growth strategy, we continued to add scale to our operations growing our subscriber base by 20% for the year to a record 11 million customers. We are especially pleased with this result in light of challenging market conditions which impacted the entire MENA region during 2011 and in particular a number of key markets of operation for the Group. With a continued focus on remaining innovative and competitive we maintained market leadership in Bahrain whilst also achieving growth in overseas markets where we have invested and from which we are now deriving even great gains and value,” Shaikh Mohamed, said.

Additional key operation highlights for 2011 included growth of the total Group mobile customer base by 21% whilst broadband subscriber figures across the network increased by 8%. 2011 also saw the Group achieve record contributions from overseas operations resulting from ongoing effective diversification of its operations geographically. For the year, 37% of revenues and 30% of operating profit were sourced from markets outside Bahrain. Year on year, this accounted for a 6% and 9% increase in revenues and operating profits, respectively, from operations at the Group’s 96% owned subsidiary Umniah in Jordan and Qualitynet in Kuwait, where growth helped to partially offset some of the effects of intense competition in Bahrain. Further growth and progress was also seen in other Group joint ventures during 2011 with solid customer and revenue growth similarly delivered by Sabafon in Yemen, Atheeb in Saudi Arabia and STel in India.

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