DUBAI, Aug 4 (Reuters) - Bahrain Telecommunications Co (Batelco) posted a 1.7 percent decline in second-quarter profit on Thursday, as it recorded losses from its share in Yemen's Sabafon.

Batelco made a net profit of 13.08 million dinars ($34.8 million) in the three months to June 30, it said in a statement.

That compares with a profit of 13.31 million dinars a year earlier, and a forecast for quarterly profit from SICO Bahrain of 12.39 million dinars.

Net profit for the first half of 2016 was 22.7 million dinars, compared with 27.5 million dinars in the corresponding period last year, the statement said.

Both first-half and second-quarter earnings were weighed by one-off items including a 0.9 million dinar provision it booked against its investment in Yemeni operator Sabafon.

Subscriber numbers in the war-torn country fell 16 percent year-on-year, although it said it continued to provide services to its customers despite the political challenges.

Second-quarter revenue, at 92 million dinars, was flat to the corresponding three months of last year.

In Bahrain, Batelco competes with units of Kuwait's Zain and Saudi Telecom Coas well as numerous Internet providers.

Competition at home prompted the state-backed operator to expand abroad. It bought most of the islands division of Cable & Wireless in April 2013.

Batelco scrapped plans to sell Jordanian telecom operator Umniah in February, while it also owns stakes in companies in Kuwait and Saudi Arabia.

($1 = 0.3770 Bahraini dinars)

(Reporting by Hadeel Al Sayegh; Editing by Adrian Croft) ((Hadeel.AlSayegh@thomsonreuters.com; +971566883310;))