Etisalat declares 35pc more dividend
Abu Dhabi, March 23, 2010
Etisalat on Tuesday announced plans to distribute dividends at 35 per cent of nominal share value for the second half of 2009 for investors. The Emirati telecom group also approved 10 per cent bonus shares.
With this, the total dividends awarded by Etisalat in 2009 rose to 60 per cent, said a company statement.
Mohammad Omran, chairman of Etisalat, said the group had maintained a strong cash balance at Dh11.3 billion ($3.07 billion) driven by strong cash flow generation. 'This cash position allowed Etisalat to have strong credit ratings, pay dividends, continue to invest in networks and finance acquisitions,' he observed.
The company's earnings per share (EPS) grew 4.2 per cent to hit Dh1.23 per share. The dividends distributed to shareholders totaled Dh3.9 billion, registering an increase of 20 per cent from 2008.
The company's aggregate subscriber’s base exceeded 107 million, representing an increase of 34 per cent.
Commenting on last year's performance, Omran said, '2009 marked a new chapter in the ongoing success story of Etisalat. Our main successes came in two fields – operational and financial. Despite the economic crisis and its impact on the whole world even the strongest sectors – Etisalat still achieved growth and positive results.'
'We continue to make strategic investments to help us to secure our future and ensure shareholder value in the long-term.'
'Nevertheless, this does not mean that we were immune to the economic slowdown. Our sales growth was impacted in selected markets and margins came under pressure as customers rationalised their total spending and as competition intensified across all markets including the UAE.'
'This was further worsened by unfavourable movements in foreign exchange rates. However, we responded by enhancing our product portfolio and adding several value-for-money offerings,' Omran stated.
'In addition, we rationalised our investments and expenditure and placed more focus on solidifying our financial strength and liquidity. Furthermore, the Corporation leveraged its advanced 3G and WiMax networks to introduce attractive wireless broadband offers increasing the overall value proposition and creating new segments in the market, he added.
Omran said the company maintained its disciplined approach in international strategy and evaluated investment opportunities more cautiously. 'We improved our presence in the Asian market by adding Tigo, the second mobile operator in Sri Lanka to our international portfolio.'
'This acquisition fits into our expansion strategy and will be accretive to shareholders long term value. As for the rest of our portfolio, we keep investing in our networks to improve capacity, coverage and quality to enable us to build market share.'
'We plan to continue expanding our reach in targeted regions and further establish Etisalat as a trusted brand for a global telecom service provider,' Omran stated.
Despite the challenging market conditions, shareholders of Etisalat have been well rewarded for their investment. The corporation has declared a total dividend of Dh0.60 per share for 2009, representing a dividend yield of 5.45 per cent.
Shareholders have also been rewarded through an increase in the share price, which grew by 33 per cent in 2009. In addition, the Corporation will make a federal royalty payment of Dh8.8 billion to the Federal Government.
Nasser bin Obood, acting CEO of Etisalat, said, 'Despite the economic slump, the mature mobile market in the UAE where the total number of subscribers surpassed 10 million with the penetration rate exceeding 200 per cent, and the intensified competition that resulted in reduction in international tariffs, Etisalat managed to lessen the impact of these factors on its operational and financial results.'
'This was mainly accomplished by seeking new revenue streams through improving and upgrading our network with advanced technologies to enable the offering of new products and services.'
These included higher speed broadband packages, improved value added services, iPhone 3G and 3GS, new promotions like “Pay Dh75 for a new Wasel Connection with 100 per cent cash back”, “Wasel 24 millionaires’ campaign”.
In addition, new distribution channels have been developed to ensure we reach customers across the UAE, Obood added.
On the operational side, Etisalat UAE continued to post growth in the number of subscribers despite the high penetration rate. Accordingly, the mobile subscriber base grew by 6 per cent to 7.74 million and internet subscribers grew by 15 per cent to 1.33 million.
'Our commitment to offer cutting edge-technology was boosted by having completed 60 per cent of the roll out of the Fibre-To-The-Home (FTTH) network in the UAE,' Obood said.
'We have intensified our efforts to achieve 100 per cent coverage of the UAE by 2011 and we are close to making Abu Dhabi the first capital city in the world with 100 per cent fibre deployment by 2010,' he added.-TradeArabia News Service