Etisalat posts Dh1.59b Q2 profit

ABU DHABI - Emirates Telecommunication Corporation, or etisalat, on monday said its second-quarter net profit fell 14.9 per cent to Dh1.59 billion from Dh1.87 billion in the same quarter last year.

By Haseeb Haider

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Published: Tue 19 Jul 2011, 11:37 PM

Last updated: Tue 7 Apr 2015, 4:37 AM

The telecom firm said first-half profit declined 11.76 per cent to Dh3.4 billion, as the company paid Dh3.86 billion Federal Royalty to the government for using federal facilities.

The Abu Dhabi-listed company further said its first-half revenue surged 0.3 per cent to Dh15.969 billion on year-on-year basis.

“Etisalat’s revenue of Dh15.97 billion was in line with prior year. Revenue earned from international operations contributed 25 per cent to overall revenue exhibiting a 17 per cent increase on the prior year,” etisalat said in its statement.

Analysts polled by Reuters forecast the firm would post a quarterly profit of Dh1.88 billion.

“Revenues were lower than our expectations while costs were higher,” said Nishit Lakhotia, telecoms analyst at Securities and Investment Co (SICO) in Bahrain.

“Etisalat has been facing tough competition at home, which is its key market, contributing more than 70 per cent of etisalat’s revenues,” he said.

The group continued to deliver strong shareholder returns yielding an Annualised Return on Equity of 16 per cent over the first half of this year.

The telecom, which has footprints in 18 markets, also announced an interim dividend of Dh0.25 per share, in line with previously issued dividends.

Chairman Mohammad Omran said: “Our performance over the half year is in line with our expectations”.

“It enabled us to continue to generate consistently high value to our shareholders.”

In a statement, etisalat said the group’s global subscriber base continued to grow, exceeding 140 million as of June 30, 2011 and increase of 20 per cent on the prior year, driven predominately by international operations.

The internet service boosted the subscribers’ numbers to 1.40 million as at 30 June, 2011, against 1.32 million subscribers six months ago.

Omran said: “Despite recent political and economic unrest in some of our key markets, etisalat witnessed an increase in both revenue and subscriber numbers in our international operations. Such a result reinforces our position as an internationally diversified telecommunications operator.”

Commenting on the network upgrade and enhancement, Omran said: “Etisalat incurred capital expenditure of Dh1.92 billion, during the half year despite, a 12 per cent decline in profit, evidencing our continued commitment to pioneering and delivering leading telecommunications technologies to our global subscriber base.”

Etisalat maintained its strong capital base supported by a robust cash position of Dh10.8 billion as of 30 June 2011.

The telecom giant remained well funded with sufficient liquidity to service debt and finance capital expenditure across its global footprint.

Net assets increased by Dh56 million to Dh42621 million as at 310 June 2011.

The telecom spent Dh1.923 billion on capital expenditure in the six months, against Dh2.193 billion in the same period, a year ago, showing a decline of 12.31 per cent.

Etisalat is now performing the final phase of trials on the advanced Long Term Evolution (LTE) network in order to commercially launch the service in the third quarter of this year. It covers 800 base stations across the nation.


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