Du's Q4 profit surges 26% as fixed-line business picks up
The company's fixed-line subscribers grew 7.1 per cent to 219,000
Emirates Integrated Telecommunications Company, also known as du, reported an annual 26 per cent increase in fourth quarter net profit despite a dip in yearly revenues and number of mobile subscriptions.
The UAE's second-biggest telecoms operator’s net profit after royalty payments for the three months ending on December 31, surged to Dh436 million, the company said in a filing to the Dubai Financial Market, where its shares trade.
Total revenue for the fourth quarter dropped 6.1 per cent to Dh3.19 billion from the same period a year earlier. Full year net profit declined 1.3 per cent to Dh1.73bn, while revenue fell 6.2 per cent to Dh12.58bn during the period.
“I am pleased with the strong results that EITC was able to achieve despite the challenging environment that the telecom market went through in 2019," said Mohamed Al Hussaini, EITC’s chairman.
"The growth of fixed and ICT revenues absorbed partially the pressure on mobile prepaid revenues adversely impacted by pricing, competition and the negative impact on the base of the SIM registration disconnections."
The number of mobile subscribers slipped 14 per cent to over 7.6 million during the fourth quarter, whereas the fixed-line customers grew 7.1 per cent to 219,000.
The company "was able to absorb fully the pressure on its revenues through increasing focus on promising growing revenue streams, better mix of its base and increased efficiency,” said Mr Hussaini.
“It also re-affirmed its commitment to the investment in the country infrastructure accelerating the deployment of its 5G network to support the future development of new products and services."
EITC’s capital expenditure increased by 46.8 per cent to Dh1.5bn last year, nearly 12 per cent of the overall revenues. This was largely due to continuing investment in 5G network roll-out, fibre network expansion, IT modernisation and transformation initiatives, the telco said in a statement.
In April, last year, EITC had predicted capex would range between Dh1.6bn to Dh1.7bn for 2019 but it slashed it by 200m in October due to a delay in 5G investment and its roll-out.
This is EITC’s first earnings announcement since the departure of its previous chief executive Osman Sultan, who left the company on December 31 after a 14-year spell at its helm.
The new chief executive Johan Dennelind said that he will work to execute a “full transformational plan” for the company to deliver on the digital promise and improve customer experience.
“I am excited to join EITC in this phase of its evolution,” said Mr Dennelind, who was earlier the group chief executive of Telia, the largest Nordic operator.
“EITC has been able to navigate in a changing environment, starting to pull growth levers and protect its margins and profitability,” he added.
EITC, which was founded in 2005 as the UAE’s second licensed telecommunications provider, includes the du brand, launched in 2007, and Virgin Mobile, which was rolled out in 2017.
It is 39.5 per cent owned by Emirates Investment Authority, 19.75 per cent by Mubadala Investment Company, 19.5 per cent by Emirates International Telecommunications and the remaining by public shareholders and national organisation.
Updated: February 11, 2020 06:00 PM