Batelco Continues to Deliver better service and Strong Growth in Quarter 1

Batelco's Chairman Shaikh Hamad bin Abdulla Al Khalifa announced a strong start to 2009 with a net profit of USD 69.8 (BD 26.3) million. Gross revenues grew by 7%, year-on-year to USD 222.0 (BD 83.7) million.

Speaking at Batelco's Group Board Meeting held on April 22nd at Batelco’s Hamala Headquarters, Shaikh Hamad said that growth is the key to Batelco's future success and profitability.

"We remain focused on delivering better service and value to our customers in Bahrain within the regulatory constraints we face. Despite increased choice and competition across all markets we operate in, our revenues in Bahrain have grown 14%, year-on-year.  We continue to invest in Bahrain's infrastructure for our customers and are also investing in new technology and growing our operations across the Middle East."

Batelco Group Chief Executive Peter Kaliaropoulos said that Batelco continued to deliver profitable growth in Quarter 1, reflecting the Company’s ongoing focus on delivering better value to customers.

"Batelco continued to deliver strong revenue growth whilst managing its costs, ending the quarter with 12% EBITDA growth and 19% growth in its Operating Profit compared to the same period in 2008. We delivered 42.7% EBITDA margin and our operating profit margin is 30.3% at the end of Q1 2009. Our net debt is effectively zero," stated Mr Kaliaropoulos.

"In the same quarter in 2008 we had benefited from a one-off gain on disposal of surplus land (BD6.8m). As a result, the group net profit of BD 26.3m shows a decrease of 4% year-on-year."

"Batelco"s transformation in Bahrain and across the region continues to deliver strong results to shareholders whilst customers are benefiting from our investments in new services such as very high speed fixed and wireless broadband and enterprise solutions."

"Our overseas operations also now contribute 33% of our revenues and more than 15% of our operating profits," he added.

21st Century Products & Services

"With our new network now complete following our BD22 million investment, we are fully enabled to deliver country-wide high speed Broadband and a comprehensive range of convergent products and services giving Bahrain's residents more choices than ever before and, radically reshaping the local communications industry," said Mr. Kaliaropoulos.

"High speed, broadband service is an essential catalyst for a knowledge economy and underpins Bahrain's Economic Vision for 2030."

"However, whilst we have been willing to offer Broadband with up to 10MB speeds and 50% price reduction on a number of our packages, we continue to be hampered by the slow and conditional regulatory policies of the TRA (Telecommunications Regulatory Authority)."

"In spite of continual disappointments, we will continue our many attempts to convince the TRA that consumers and the Kingdom can benefit if Batelco is allowed to offer better value internet services," he added.

"We entered 2009 with a remit to deliver relevant new products, services and great value promotions for our customers. Among the value deals we have offered during the first quarter of the year are SimSim Starter Packs, priced at only BD2 which includes BD1 free credit and puts mobile connectivity within the reach of virtually everyone, Free Sony Portable PlayStations for new or upgrading high speed Broadband customers, and Cash prizes of up to BD1000 every month for a year in a loyalty programme for our postpaid mobile customers."

"Batelco's customers can avail of all our products and services through 20 Retail Shops located in all areas of Bahrain and assistance is always just a phone call away by phoning 196 where our aim is to resolve customer issues on the first and only call to us," Mr. Kaliaropoulos said.

Leading Philanthropic Company

Batelco's Chairman Shaikh Hamad noted that Batelco continues to be one of the leading employers of Bahrainis in the Kingdom with 92% of its 1,594 workforce being Bahraini Nationals. Additionally, Batelco is among Bahrain’s leading philanthropic companies with millions being spent each year on sponsorships and donations.

"Since the beginning of the year Batelco has supported the work of a number of local charities through financial sponsorships and furthermore, Batelco has committed to contribute millions of dinars to a variety of causes as part of the Company’s annual social responsibility towards the community," said Shaikh Hamad.

Chief among Batelco’s CSR programmes is the ambitious Batelco Live project that is providing 30 fully equipped computer labs and free internet in villages throughout the Kingdom.

"We were honoured that HH Shaikh Abdulla bin Hamad Al Khalifa, Governor of the Southern Governorate, opened the first Batelco Live Computer Laboratory, located in Fatima Centre - Riffa earlier this year," said Shaikh Hamad.

Batelco funds are also being used to rebuild and refurbish dilapidated houses belonging to Bahraini families with a BD10,000 contribution to the Palm Association.

Batelco Management Restructure

Batelco has recently announced a new management structure to better serve the needs of Batelco as the Group continues to expand regionally and internationally. Danish national Gert Rieder joined Batelco at the beginning of April as the new CEO for Bahrain whilst Mr. Kaliaropoulos takes on the challenge of driving further growth for Batelco as Group Chief Executive.

Batelco Chairman, Shaikh Hamad added that on behalf of the Board of Directors he wanted to extend a warm welcome to the new Bahrain CEO Gert Rieder.

"We wish Gert well in his task to lead the operations of Batelco in the competitive environment we now have in the Kingdom and we look forward to benefiting from his telecommunications experience in Europe," Shaikh Hamad added.

"I am delighted to have the opportunity to lead Batelco Bahrain and further develop our position as the leading telecommunications’ provider in Bahrain. Focus on continuously improving customer service and quality of service will remain key elements. Batelco will maintain its leading role in bringing innovative products and services to the market for the benefit of all our customers," Mr. Rieder said.

April 22,2009