Du, the UAE mobile operator, has posted Dh468 million in net profits after royalty for the first quarter.
Profits for du up 40% as subscriber numbers rise
The mobile operator du has posted Dh468 million in net profits after royalty for the first quarter of this year, up 40 per cent year-on-year as a result of lower operating costs and a rise in mobile subscribers.
Revenues for the first quarter grew by almost 11 per cent to Dh2.63bn, while Ebitda (earnings before interest, taxes, depreciation and amortization) grew by almost 14 per cent.
"The quarter saw a solid performance across all areas of the business, with a double-digit rise in total revenues on the same period in 2012," said Osman Sultan, the du chief executive. "Growth in mobile data revenues reflects the ongoing shift in network traffic from voice to data, a trend we expect to continue, consistent with sector developments worldwide."
Revenues from the mobile sector rose 11 per cent to Dh2.06bn and data revenues continued to surge, up almost 33 per cent to Dh520m in the first quarter this year when compared with a year earlier.
Net profit before royalty grew by almost 13 per cent year-on-year to Dh752m. Du added more than 180,000 new mobile subscribers, pushing the total customer base to 6.64 million in the UAE, a rise of almost 20 per cent since the first quarter of last year. Almost 92 per cent of its customer base is made up of prepaid mobile users, but the operator is keen to increase its share of the postpaid mobile customer base.
"Efficiency and cost control will remain a strategic driver throughout 2013 and beyond, while rapidly evolving consumer requirements and technology advances will continue to drive our investment programmes," said Mr Sultan.
Du invested Dh368m in the first quarter on its infrastructure and networks. Operating costs were down 9 per cent to Dh698m.
Last December, the UAE Government increased the royalty fees for du and Etisalat. There were fears initially that the changes would bring down du's bottom line, but the rise in profits has come as a welcome surprise for the company, which ended Etisalat's monopoly on the telecoms sector in 2007. Du's fees on revenues increase 2.5 percentage points a year until 2016, when they will be in line with Etisalat's fees.
Du's shares have gained 46.4 per cent so far this year. They closed 0.59 per cent higher at Dh5.14 a share in Dubai yesterday.