DUBAI: Bahrain Telecomm-unications Co reported a 10th profit drop in 11 quarters yesterday as domestic competition and one-off charges from a cost-cutting programme hurt the bottom line.
The former monopoly, commonly known as Batelco, made a net profit of 17.75m dinars ($47.1m) in the three months to December 31, down from 23.5m dinars in the year-earlier period, according to Reuters calculations. Two analysts polled by Reuters forecast Batelco would make a quarterly profit of 38.05m dinars.
These estimates included an expected gain from the agreed sale of Batelco’s 43 percent stake in Indian affiliate S Tel to its Indian partner, which the Bahraini firm had expected to be completed in the fourth quarter.
Prior to the results announcement, Nishit Lakhotia, a telecoms analyst Securities & Investment Co in Bahrain, estimated this gain would be 19.3m dinars based on the difference between the agreed sale price — $175m — and the book value of S Tel on Batelco’s accounts as of September 30.
Batelco is now suing its India partner for non-payment. Accounting rules would allow the firm to book the sale gain in the fourth quarter as a receivable item. However, the company declined to comment on whether it had done this. S Tel was one of eight Indian mobile operators stripped of licences in February 2012 as part of a corruption probe.
Batelco’s fourth-quarter revenue was 77.16m dinars, it said in a statement. This compares with 81.5m dinars a year ago. “Beyond aggressive competition in the Bahrain market and elsewhere in the region, our results for 2012 were also impacted by a number of one off charges including expenses associated with an extensive restructuring and cost rationalisation programme at our Bahrain operations,” said Chairman Sheikh Hamad Al Khalifa in the company’s results statement.
Reuters
