Etisalat’s income seen lower

Etisalat’s net profits are expected to have declined by around 10 per cent in 2011 due to slackening mobile phone operations but earnings will likely rebound in the next three years, according to a Kuwait bank. 

Etisalat, one of the largest companies in the Middle East, netted nearly Dh 7.63 billion in 2010 and the income is expected to have shrank to about Dh6.8 billion in 2011, Global Investment House (GIH) said.

The decline appears to have been caused mainly by slackening mobile phone performance despite better performance in overseas operations.

After rapid growth in previous years, mobile phone subscribers to Etisalat declined to around 7.5 million at the end of the third quarter of 2011 from 7.8 million a year ago due to strong competition from Du.

GIH said it was difficult for Etisalat to achieve further growth because of the stiff competition and high penetration in the country. But it noted that the company, owned 40 per cent by the UAE government, is focusing on rebalancing its product portfolio to internet and data revenue.

“We are optimistic about Etisalat’s international operations in Egypt, Africa and Saudi Arabia…these markets will be the key value drivers in the short to medium term,” GIH said in a study.

After a decline in 2011, Etisalat’s net income is projected to rebound to Dh7.34 billion in 2012 and Dh7.68 billon in 2013 before it peaks at nearly Dheight billion in 2014, the report said.

GIH put Etisalat’s assets at Dh75.6 billion at the end of 2010 and expected them to have swelled to Dh78.4 billion at the end of 2011. It forecast the assets to rise further to Dh82.2 billion at the end of 2012, nearly Dh86 billion at the end of 2013 and Dh89.6 billion at the end of 2014.

Shareholders equity will also rise from Dh38.7 billon at the end of 2010 to an estimated Dh40.8 billon at the end of 2011, Dh43.4 billion at the end of 2012, around Dh46 billion at the end of 2013 and Dh48.5 billion at the end of 2014.


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