Du records Dh570m Q4 net profit
Du, the United Arab Emirates' second biggest telecoms operator, expects further growth in the business due to a buoyant local economy, its chief executive said after reporting a rise in revenue and a better than expected fourth-quarter profit on Tuesday.
Du expanded rapidly after ending Etisalat's domestic monopoly in 2007 to claim 46.4 per cent of mobile subscribers as of Sept. 30, according to the most recently available data.
However, the Dubai-based firm's market share by revenues is more modest, at 29.2 per cent in the third quarter, with Etisalat still having the bulk of the business with corporate customers and wealthy individuals.
As a result du's profit for 2013 was little changed at Dh1.99 billion ($542 million), up from Dh1.98 billion in 2012, a bourse filing on Tuesday showed.
However, Chief Executive Osman Sultan said the company would still benefit from overall growth in the UAE's booming economy. Economists polled by Reuters estimate the country's gross domestic product increased by 4.3 percent in 2013 and predict it will expand by the same rate in 2014 and 2015.
"We believe being in the service sector we're in a good position to profit from this momentum," said Sultan.
Yet he warned the UAE telecoms market was becoming more competitive and du's share of new business was less than it had been during its start-up phase.
"We used to get the lion's share," said Sultan.
Du's fourth-quarter profit fell 43 percent to Dh570 million from Dh994 million a year earlier when the company wrote back some tax provisions, according to Reuters calculations.
Analysts polled by Reuters had on average forecast du would make a quarterly profit of Dh487.9 million.
FOREIGN EXPANSION ?
As to prospects for du expanding abroad Sultan said a move was possible eventually but that "we're not looking at any specific opportunity now - we're keeping the door open".
Du previously considered and then decided against bidding for a virtual operator licence in Saudi Arabia.
Du's mobile data revenue increased 34 percent to Dh2.36 billion in 2013, with data now accounting for 28 percent of this, up from 23 percent a year earlier. Sultan said he hoped this would top 30 percent in 2014.
Annual revenue rose 9.7 percent to Dh10.8 billion. Of this, Dh8.37 billion was from mobile, while fixed line services accounted for Dh1.68 billion, up 3.4 percent from a year earlier.
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