Etisalat posts Dh7.6bn 2010 profit
Emirates Telecommunications (etisalat), which has bid for a 46 per cent stake in Kuwait's Zain, posted a flat fourth-quarter net profit, beating analyst's forecasts.
Etisalat's quarterly net profit was Dh2.03 billion ($552.7 million), up slightly from Dh1.99 billion a year earlier, according to Reuters calculations.
Reuters calculated the quarterly net profit from etisalat's previous financial statements.
Analysts polled by Reuters had estimated the company to report, on average, net profit of Dh1.74 billion dirhams for the fourth-quarter.
The Arab world's second-largest telecom operator by market value reported a full-year net profit of Dh7.6 billion, compared with Dh8.8 billion dirhams in the year-ago period, it said in a statement.
Etisalat's shares closed 0.9 per cent higher on the Abu Dhabi bourse prior to the results.
Mohammad Omran, Chairman of Etisalat, said: "Despite the global financial crisis and a competitive UAE telecoms market, our 2010 financial results overall have been good. These satisfactory results reveal that Etisalat remains a profitable company. Etisalat realised well ahead of time that growth opportunities in the UAE telecom market would start diminishing due to high saturation of the UAE's mobile market.
“We anticipated the effect that it would have on current market conditions. Therefore, we developed a long-term strategy that would maintain the rate of growth, revenues and profit margins for our stakeholders - primarily the UAE federal government who owns 60 per cent of the corporation - by diversifying our source of income and moving towards regional and international markets."
He noted that the growth in the international group revenue, excluding UAE, has reached 46 per cent compared to 2009, and these markets continue to hold promise in coming years. Today etisalat is generating revenue from most of its international operations ahead of forecasts.
"Etisalat's investment strategy focuses on expansion of telecommunication services in low penetration, emerging international markets. This gives etisalat huge opportunity for growth and increased revenue, as substantiated by etisalat Group's growing number of subscribers which has reached 135 million customers across 18 countries over a total area inhabited by more than two billion people," Omran said.
In 2010, etisalat increased its investment in some African markets. During the year, the corporation acquired new shares in Atlantic Telecom which operates in seven countries in West Africa, and acquired additional shares in Zanzibar Telecom Ltd (ZANTEL in Tanzania), and in Sudan-based Canar Telecommunications Company Ltd. The total capital expenditure for acquiring these shares has reached Dh1bn. These markets are high-potential markets for growth and subscriber numbers.
Nasser bin Obood Al Falasi, Acting CEO for Etisalat, said: "In light of the slowdown in subscriber growth numbers as a result of repercussions from the economic climate and high saturation in the UAE market that exceeded 200 per cent as per recent research from the Telecommunications Regulatory Authority (TRA), Etisalat has adopted a strategy that suits current climate conditions by offering new and innovative services with the aim of achieving a healthy growth rate, while offering increased benefits to customers and ensuring the latest technologies are available to them."
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