The overwhelming majority of 81.94 per cent of the shareholders of Bahrain Telecommunication Company (Batelco) approved the payment of cash dividend of $171.9 million for the year 2010, representing 45% of the paid-up capital.
The Company, which reported a 17.4% decline in its net profits for 2010 over the previous year, had paid 20 fils per share as the interim dividend in July 2010 and the remaining 25 fils per share will be paid in March 2011.
During the annual general assembly held at Batelco’s Headquarters in Hamala and chaired by Chairman Shaikh Hamad Bin Abdulla Al Khalifa, the Company’s leadership assured the shareholders that it would sustain the steady year-on-year gross revenues and record customer base from Group’s market leadership in Bahrain and abroad.
The Batelco Group delivered steady year-on-year gross revenues for 2010 of $902.7 million and net profit of $230.2 million, a decline of 17.4% over 2009.
Batelco Chairman Shaikh Hamad Bin Abdulla Al Khalifa said that Batelco’s steady revenues were delivered in spite of the continuing impact of declining market share in Bahrain caused by increased competition and regulatory decisions which have limited Batelco’s growth in a heavily saturated market.
“In addition to the reduced market share, Batelco Group’s annual financial results were affected by its share of expected losses for its start-up operation S Tel (India), which completed its first full year of operation in 2010,” he said.
“Our strategy to grow and diversify the group through our expansion programme continues to be successful and resulted in a 67% increase in Batelco’s customer base, which reached an impressive 9.2 million across the Group’s seven operating markets by the end of 2010,” Shaikh Hamad added.
Batelco Group Chief Executive Peter Kaliaropoulos said that Batelco’s solid financial and operating results were delivered in undoubtedly the most challenging year for Batelco in the last decade.
“In spite of the challenges, we further diversified during 2010 and grew our business to over 9.2 million customers by the end of the year. We retained market leadership in Bahrain, Kuwait and Yemen. In Jordan we achieved almost equal second spot in the mobile market share whilst in India and Saudi Arabia, we achieved above expectations results after the first full 12 months of operations in the most competitive of market places.”
Batelco’s operating profit for 2010 of $282.5 million declined by 4.7% compared to the previous year.
“Whilst Batelco Bahrain’s operating profit was lower, stronger year-on-year results from Umniah reduced the overall decline in operating profit. Batelco’s overseas operations contributed 34% of gross revenues and 25% of EBITDA. Group Free cash flow of $289 million, representing a 75% EBITDA conversion rate, exceeded expectations.
“Our net profit of $230.2 million, a 17.4% decline versus 2009, included our share of S Tel’s first year losses and the end of Sabafon’s investment tax exemption in Yemen, a total of BD13 million adverse impacts,” he said.
Kaliaropoulos added that growing the Group’s operations overseas and also growing customer numbers continued to be strategic priorities for Batelco.
“Retaining our leadership in the Bahrain market is also of key importance. We are committed to delivering a full range of communication services, world-leading products and unmatched customer care and in 2010 invested $58 million in new wireless and fixed infrastructure in Bahrain. ”
“In order to operate more efficiently and reduce our input costs we are leveraging our resources further to ‘deliver more with less’ through process re-engineering and innovation. To that end we will continue to make our back office systems and processes ‘smarter’ across the Group and continue to implement cost reduction programmes and restructure our operations driven by market conditions. Additionally, by reviewing procurement arrangements with our largest suppliers on a group-wide basis, we are striving to improve supply terms and service delivery,” Kaliaropoulos explained.