x Abu Dhabi, UAESunday 23 July 2017

One-off Dh1 billion dividend for du shareholders after Q2 profit gain

A 45 per cent increase in data revenues and a rise in postpaid customers has enabled du to announce a 46 per cent rise in net profit after royalty fee payments to Dh474m in the second quarter of this year.

DUBAI // 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 (EGM).

A 45 per cent increase in data revenues and a rise in postpaid customers has enabled du to announce a 46 per cent rise in net profit after royalty fee payments to Dh474m in the second quarter of this year. Total revenue increased 12 per cent to Dh2.66bn while Ebitda increased 16 per cent to Dh1.09bn.

“All this is leading to a very solid situation from a cashpoint of view, so we will be returning Dh1bn to shareholders” said Osman Sultan, chief executive officer of du, “this will be a one off so we will adjust interim dividends year on year.”

As talks on 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 like broadband and internet protocol television (IPTV) 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, its fixed line customers amount to less than 580,000.

“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 (MVNO) licences in the region as a way of tapping into new markets. Du had considered bidding for one of the three MVNO 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.

thamid@thenational.ae