Etisalat Beats Expectations

Despite the dull performance, the country’s largest telecom services provider managed to post better than expected results amid economic downturn.

“The financial results for the first half of 2009, reflect that etisalat was not directly affected by the global financial crisis,” Etisalat Chairman Mohammad Omran said in a statement on Saturday.

Analysts had forecast on average that etisalat, one of the largest Arab telecom companies, would post a second-quarter profit of about Dh2.22 billion, in a Reuters survey earlier this month.

The company reported net profit for the first-half at Dh4.59 billion, or $1.25 billion, while the net profit for the same period in 2008 was Dh5.045 billion which included profit on sale of shares in Mobily, its Saudi Arabian affiliate, of Dh892 million after federal royalty, the company said in a statement. After adjusting the 2008 figures for the share sale, etisalat’s first-half profit this year increased by 11 per cent.

Etisalat recorded net revenues of Dh14.7 billion for the first half of 2009, showing an increase of 10 per cent compared to the first half of 2008 at Dh13.4 billion. Total assets of the company declared at Dh67.2 billion, up by seven per cent, compared to last year’s total assets of Dh62.9 billion.

Earnings per share were Dh0.64 in the first half versus Dh0.70 a year earlier, the statement said, adding that last year’s figure would be Dh0.58 after excluding income from the asset sale.

“The growth in revenues achieved will help us expand and develop our national and international business units,” Omran said.

“We have reduced our operational expenditure in the period and have become even more selective in choosing our international investments. We are achieving this by making use of the current financial environment and searching for positive opportunities that arise during these times,”he said.

The telecom operator has been expanding overseas as it faces stiffer competition in its home market, where some analysts have predicted that job cuts could reduce population, weighing on profits of E tisalat and rival du.

The decision by Iran’s telecom regulator to withdraw the mobile-phone licence on May 11 is not final and the company may pursue discussions on the issue, Omran told Bloomberg in an interview in May. Etisalat said in May it is interested in bidding for a 32 per cent stake in Moroccan phone company Meditelecom being sold by Portugal Telecom SGPS.

Etisalat, up 26 per cent this year, rose 1.5 per cent to Dh10.45 at the close in Abu Dhabi trading on July 16. The stock which is seen as a safe haven by investors is up 26 per cent since the beginning of this year.

· abdulbasit@khaleejtimes.com

· With inputs from agencies