Friday, Jul 27, 2012

(Recasts lede, adds details, background throughout.)

DUBAI (Zawya Dow Jones)--Bahrain Telecommunications Co. (BATELCO.BH), or Batelco, the country's biggest telecom operator, Friday posted a fall of 11% on the year in its first-half net profit as domestic pressure weighed on earnings, and said it will focus on overseas growth in the second half of the year.

The company made 34.6 million Bahraini dinars ($91.8 million) in the first half of the year, according to an emailed statement. While the statement didn't provide a net profit number for the second quarter, according to Zawya Dow Jones calculations, the company made BHD18.5 million in the second quarter.

The quarterly result fell short of the BHD19 million effort that analysts at Bahrain-based Sico had penciled in.

"In our home market, Bahrain, we continue to face significant competition from other operators coupled with lack of any significant growth," Shaikh Hamad Bin Abdulla Al Khalifa, Batelco's Chairman, said in the statement. "As a priority, we are implementing various initiatives to improve efficiencies, lower our operating cost structure and be more responsive to our customers with a full service portfolio."

The telco's revenue fell 5% to BHD155.3 million in the first half of the year. Overseas markets contributed 39% to the top line, Batelco said.

"We ended the period with seven million customers across six markets. We are working to build on this. Further organic growth is expected in our overseas operations during the second half of 2012," Shaikh Mohamed bin Isa Al Khalifa, Batelco Group CEO, said in the statement.

Meanwhile, earnings per share were 24 fils for the first half of the year and the board of directors approved an interim cash dividend for shareholders of 15 fils per share for the six-month period.

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 in May said it has dropped plans to sell its towers as various sale-and-lease-back proposals did not create sufficient long-term economic value, and instead said it will focus on sharing infrastructure with other telecom operators in a bid to cut costs.

The company's shares closed flat at BHD0.470 on July 24.

-By Shereen El Gazzar, Dow Jones Newswires; +971 444 61684; Shereen.elgazzar@dowjones.com

(END) Dow Jones Newswires

27-07-12 0905GMT