Saturday, Apr 28, 2012

(This story was originally published on Thursday)

--1Q net profit -8% on year at BHD16.1 million, misses most forecasts

--Revenues for the quarter fell 4% to BHD78 million

--Mobile subscribers down 9% on quarter, excluding India operations

By Nikhil Lohade

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Bahrain Telecommunications Co., or Batelco, said Thursday it will focus on growing its customer base and scale in the Middle East and North Africa region, after the Gulf Arab state's biggest telco posted an 8% drop in first quarter net profit that missed most expectations as mobile subscribers fell.

The company made a net profit of 16.1 million Bahraini dinars ($42.7 million) during the first three months of the year, down from BHD17.5 million a year earlier, Batelco said in a statement posted on the Bahraini bourse website.

The quarterly result fell short of the BHD20 million effort that analysts at Bahrain-based Sico had penciled in, while Kuwait's Global Investment House had expected it at BHD19.3 million.

The telco's revenues fell 4% to BHD78 million in the quarter, from BHD80.8 million a year earlier. The overseas markets contributed 38% to the top line as the company works to diversify its revenues, Batelco said.

The company reported a 40% decline in mobile subscribers, compared with the previous quarter, largely due to an adjustment for the exclusion of its India operations, which Batelco in February said it has agreed to sell.

But the telco also lost subscribers after normalising for the exclusion of its India unit, down 9% from the previous quarter due to competitive pressures in its home market and across the region.

Batelco said the group's adjusted subscriber base now stands at some 6.9 million users across the six markets it operates in.

Looking ahead, Batelco said its top priority in 2012 is to build scale and further value across the group.

"We continue to be in a strong position to deploy our resources towards further strengthening our existing operations and making investments in the growth and expansion of the group, which is a key priority in 2012," Sheikh Hamad Bin Abdulla Al Khalifa, the company's chairman, said in the statement.

Batelco in February said it has signed an agreement to sell its 42.7% stake in India's STel to Sky City Foundation for BHD65.8 million, exiting its investment in the South Asian country following a supreme court order cancelling its telecom licenses as part of a wider order scrapping 122 permits for second-generation telephone services issued in 2008.

STel's six permits are among those which face cancellation. The sale is expected to be completed by the fourth quarter of this year, Batelco said at the time.

Batelco shares closed flat at BHD0.46 Thursday.

-By Nikhil Lohade and Shereen El Gazzar, Dow Jones Newswires; +9714 446-1694; nikhil.lohade@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

28-04-12 0629GMT