Du Q3 profit rises 45pc to $129m
Dubai, October 31, 2013
Du, the UAE's No 2 telecommunications operator, reported a 45 percent increase in third-quarter profit on Thursday, roughly in line with analysts' estimates as revenue rose slightly and it paid a lower taxes.
The firm, which ended rival Etisalat's domestic monopoly in 2007, made a net profit of 474.3 million dirhams ($129.13 million) in the three months to September 30, up from 326.9 million dirhams in the year-earlier period.
Analysts polled by Reuters on average had forecast du would make a quarterly profit of 478.1 million dirhams.
In December 2012, the UAE announced changes to the royalties, or tax, it levies on the telecom sector, introducing a more complicated structure that would reduce the burden on du and Etisalat, which are both majority-owned by state-linked institutions.
Du paid a royalty of 293.2 million dirhams, having made a pre-tax profit of 767.6 million, giving an effective tax rate of 38 percent. In the year earlier period, it provisioned to pay 50 percent of its profit in royalties.
Quarterly mobile revenue rose 9.7 percent year-on-year to 2.05 billion dirhams. Of this, 616 million dirhams came from data, with data income up by about a third from a year earlier.
Du increased its mobile customer base by 15.7 percent from a year ago to 6.9 million subscribers as of Sept. 30, giving it a market share of 46.4 percent.
Of these mobile customers, 9.1 percent were on monthly, or post-paid, contracts. These subscribers typically spend more on telecom services and are less likely to switch provider.
"Growth during the quarter was driven by progress made in the data segment and a continuing strategy of attracting high-value customers," Osman Sultan, du chief executive, said in the statement.
Despite this, du's average revenue per user (ARPU) - a key industry metric - fell to 97 dirhams in third quarter, down from 99 dirhams in the second quarter of 2013.
Du's margin on its earnings before interest, tax, depreciation and amortisation (EBITDA) - another important industry indicator - was 40.2 percent for the third quarter, up from 39.1 percent in the year-earlier period. - Reuters
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