Etisalat Q3 profit up 28pc after Indonesia sale
Abu Dhabi, October 23, 2012
Etisalat, the United Arab Emirates' No 1 telecom operator, posted a 28 percent rise in third-quarter profit, beating analysts' estimates after the former monopoly booked gains from a stake sale in Indonesia.
The firm, which operates in 15 countries across the Middle East, Africa and Asia, made a net profit of 2.21 billion dirhams ($602 million) in the three months to September 30, up from 1.72 billion dirhams in the year-earlier period.
This included net profit of 430 million dirhams from selling a 9.1 percent stake in Indonesia's PT XL Axiata that cut Etisalat's holding to 4.2 percent.
Analysts polled by Reuters forecast Etisalat would make a quarterly profit of 1.9 billion dirhams.
Third-quarter revenue was 8.01 billion dirhams, near-flat from a year ago. Etisalat's foreign operations generated revenue of 2.4 billion dirhams, up 7 percent year-on-year.
The operator, No.2 in the Gulf by market value, said operating expenses dropped 8 percent to 4.6 billion dirhams as falling sales costs and lower depreciation and amortisation expenses more than offset a 6 percent rise in wages.
After a bumpy few years that saw annual profit fall by a third between 2009 and 2011, Etislat has refocused on its domestic market, where rival du has built up a 47.2 percent share of mobile subscribers since launching services in 2007.
Etisalat had 7 million domestic mobile subscribers as of September 30, up 11 percent from a year ago, but margins remain under pressure as the UAE's largely expatriate foreign workforce increasingly uses internet-based phone services, hurting its lucrative international call and text businesses.
The firm is also placing a greater emphasis on its foreign units in high growth, high population markets such as Saudi Arabia, Nigeria and Egypt, while chief executive Ahmad Julfar last week ruled out exiting any foreign markets.
Egypt unit Etisalat Misr had third-quarter revenue of 1.3 billion dirhams, up 9 percent from a year ago, representing more than half Etisalat's foreign earnings.
Revenue from its other Africa operations rose 2 percent to 689 million dirhams, while Asia was up 10 percent at 408 million dirhams.
Etisalat had a net cash balance of 7.2 billion dirhams as of September 30. - Reuters