Monday, September 25

UAE’s Etisalat Q3 Net Profit Rises On Domestic Income, Morocco Buy

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Reuters, Dubai

Etisalat

Abu Dhabi-listed Etisalat reported a 22 percent rise in third-quarter net profit on Wednesday as rising domestic income, lower taxes and the firm’s takeover of Maroc Telecom bolstered its bottom line.

The United Arab Emirates’ former telecommunications monopoly, which operates in 19 countries across the Middle East, Africa and Asia, made a net profit of 2.22 billion dirhams ($598.97 million) in the three months to Sept. 30, it said.

This compares with a profit of 1.83 billion dirhams in the year-earlier period.

Four analysts polled by Reuters had on average forecast Etisalat, the Gulf’s No.2 telecommunications operator by market value, would make a quarterly profit of 2.65 billion dirhams.

Quarterly revenue was 13.2 billion dirhams, up from 9.59 billion dirhams a year earlier.

Domestic third-quarter revenue rose 10 percent to 6.8 billion dirhams, while 48 percent of group revenue came from Etisalat’s international units, up from 35 percent in the year-ago period.

This follows Etisalat’s purchase of a 53 percent stake in Morocco’s Maroc Telecom for 4.14 billion euros in May. Former monopoly Maroc Telecom also has operations in Gabon, Mauritania, Burkina Faso and Mali.

Etisalat’s international operations will account for at least 50 percent of group revenue in the future, Etisalat chief executive Ahmad Julfar said in a statement.

“Africa remains an important strategic region for our business,” he said.

Third-quarter revenue from Etisalat’s African cluster was 3.7 billion dirhams, up more than 400 percent from a year ago following its consolidation of Maroc Telecom.

Excluding Maroc Telecom, the African cluster’s revenue fell 5 percent to 661 million dirhams and was “mainly impacted by Ivory Coast and Tanzania”, the statement said.

Etisalat paid an effective royalty – or tax rate – of 44 percent on its third-quarter net profit, down from 50 percent a year ago due to changes in the way the government calculates this fee. This meant Etisalat paid 1.72 billion dirhams in royalties in the third quarter, down from 1.84 billion dirhams.

The company’s margin on earnings before interest, tax, depreciation and amortisation (EBITDA) was 53 percent in the third quarter, up from 48 percent a year earlier. Quarterly depreciation and amortisation costs rose 56 percent to 1.7 billion dirhams.

Etisalat’s revenue from its operations in Asia fell 6 percent to 1.5 billion dirhams due to “subdued operations in Pakistan and a highly competitive environment in Afghanistan”. Pakistani subscribers fell 6.3 percent to 26.7 million, while the unit’s revenue and EBITDA margin also declined.

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