Etisalat's Q1 net profit up 11% to Dh2 bn

Etisalat Group said its net profit in the first quarter after Federal Royalty amounted to Dh2 billion, an increase of 11 per cent year-on-year.

Etisalat Group aggregate subscriber base grew to 145 million by end of March 2014,  a year over year growth of three per cent.

In the UAE, the active subscriber base grew to 10.9 million subscribers in March 2014 representing year over year growth of 16 per cent.

The company’s mobile subscriber base grew by 20 per cent to reach 8.9 million subscribers. Fixed line subscribers including eLife and broadband segments increased to two million, representing a year on year growth of 2 per cent.
 
Revenues

Etisalat Group’s consolidated revenue in the first quarter of 2014 amounted to Dh9.9 billion, up three per cent in comparison to the same period last year.

In the UAE, revenues of Dh6.5 billion for the first quarter of 2014 were eight per cent higher than the first quarter of 2013.

Revenue from international consolidated operations reached to Dh3.3 billion, representing 34 per cent of consolidated revenues.

Consolidated EBITDA totalled Dh4.9 billion, resulting in EBITDA margin of 50 per cent.

Earnings per share (EPS) amounted to 26 fils in the first quarter of 2014, an increase of 11 per cent from the same period last year.

Etisalat’s shareholders approved the board of directors’ recommendation on the distribution of dividends in the amount of 70 fils per share for the fiscal year 2013 which was paid in August 2013 and April 2014.

Consolidated capital spending declined by 14 per cent to Dh0.9 billion. The company had consolidated net cash balance of Dh13.3 billion.

Ahmad Abdulkarim Julfar, Group CEO of Etisalat, said: “Our focus on innovative products and services that change the way people live helped in customer retention while attracting new subscribers.”

Royalty fee

In December 2012, a new royalty mechanism for the telecom operators was established by the Federal Government in the UAE. As per the new mechanism, Etisalat is required to pay 15 per cent royalty fee on the UAE regulated revenues and 35 per cent of net profit after deduction of 15 per cent royalty fee on the UAE regulated revenues. 35 per cent royalty fee on profits from international operations is netted off with the corporate taxes paid/payable in the respective foreign countries.

Federal Royalty for the first quarter of 2014 amounted to Dh1.9 billion, representing a year-over-year increase of four per cent. This resulted in an effective royalty rate of 48 per cent on net profit before Federal Royalty in comparison to 50 per cent in the same quarter prior year.
 

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