x Abu Dhabi, UAETuesday 25 July 2017

Rising costs eat into Etisalat earnings as profits fall 15%

Etisalat posts decline in second-quarter profit amid higher operating costs.

Etisalat posts decline in second-quarter profit amid higher operating costs. Photo by Jeff Topping/The National
Etisalat posts decline in second-quarter profit amid higher operating costs. Photo by Jeff Topping/The National

Etisalat has posted a decline in profits of almost 15 per cent, falling below analysts' expectations due to higher operating costs.

The UAE-based telecommunications firm reported second-quarter profit of Dh1.59 billion, down 14.97 per cent from Dh1.87 billion in the same period last year.

Etisalat, which operates in 18 countries, pays half of its net profit to the UAE government as a royalty fee.

The results fell short of analysts' expectations, with a poll by Reuters having forecast quarterly profits of Dh1.87 billion.

Shares in Etisalat, which are listed on the Abu Dhabi Securities Exchange, fell by 0.9 per cent to Dh10.95 early on Monday.

Etisalat reported that operating costs in the second quarter rose to Dh4.99 billion from Dh4.64 billion in the same period last year.

In the UAE, Etisalat reported 7.5 million mobile subscribers, 1.1 million fixed-line subscribers and 1.4 million internet subscribers. That suggests that the operator has recovered some mobile subscribers in the second quarter, having lost thousands of customers to rival operator du.

For the first six months of this year, Etisalat's group revenues increased by 0.3 per cent to Dh15.97 billion. Its profit in the first half decreased by Dh455 million to Dh3.41 billion.

In a statement to the Abu Dhabi bourse, Etisalat said it had set its interim shareholder dividend at 25 fils per share, payable from 11 August.

bflanagan@thenational.ae