Du, the UAE's No2 telecoms company, will be returning Dh1 billion to its shareholders in the form of a one-off cash dividend of 12 fils per share.
Du to pay out Dh1 billion dividend
Du will be returning Dh1 billion to its shareholders in the next quarter.
The one-off cash dividend of 12 fils per share has been approved by the board and will be put forward in an extraordinary general meeting, the telecoms operator said yesterday.
A 45 per cent increase in data revenues and a rise in postpaid customers enabled Du to announce a 46 per cent rise in net profit after royalty fee payments to Dh474 million in the second quarter of this year. Total revenue increased 12 per cent to Dh2.66 billion while earnings before interest, taxes, depreciation and amortisation increased 16 per cent to Dh1.09bn.
"All this is leading to a very solid situation from a cash point of view, so we will be returning Dh1bn to shareholders," said Osman Sultan, the chief executive of du. "This will be a one off so we will adjust interim dividends year on year."
As talks on a network-sharing deal in the UAE seem to be progressing, with some officials expecting an agreement within a year, du's focus will remain on the UAE market for the time being.
Du's home services including broadband and internet protocol television are limited to the newer areas of Dubai, while Etisalat enjoys wider coverage across the country. While du has a mobile subscriber base of 6.6 million - up 16 per cent year on year - its fixed-line customers amount to fewer than 580,000.
Etisalat said this week that a network sharing deal would be worked out in the next 12 months and that it was in "an extended testing phase".
"This is something that is very important for us, this will really give us access to the entire country when it comes to home services. It will be game-changing. We are taking into account the potential expansion, that we have this significant opportunity ahead of us," said Mr Sultan.
The opportunity is such that the company has set back any plans for expanding outside the UAE for the time being. Recently Mr Sultan had indicated an interest in pursuing mobile virtual operator network licences in the region as a way of tapping into new markets. Du had considered bidding for one of the three of those licences in Saudi Arabia, but pulled out after margins were deemed "not attractive".
"There is room for this market [UAE] to grow and we will continue to benefit from this growth … [but] it doesn't mean we are not looking at expansion," said Mr Sultan.
Instead of pursuing new licences, du is looking at partnering with different telecoms players in the region to create digital content and become a hub for digital content. It is also redeveloping its Anayou platform as an over-the-top service for telecoms operators in the region with an announcement on its latest development expected within the next six to nine months.