Du to break even by the end of 2008

Emirates Integrated Telecommunications Company (du), the second telecoms service provider in the UAE, is expected to break even in the last quarter of 2008, much before the anticipated profitability target date.

The company has narrowed its losses to Dh44m for the quarter from Dh62m. For the comparable quarter of 2007, the company had reported a loss of Dh237m. Thus, the earnings before interest, tax, depreciation and amortisation (EBITDA) was Dh29m compared to Dh1.6m for the first quarter of 2008. For the comparable quarter of 2007, the figure was a negative Dh241 million.

"We are firmly on track to achieve our expected results for the year earlier than anticipated. We are expected to be profitable by the last quarter of this year itself, much before the promised horizon," du Chief Executive Osman Sultan told Emirates Business.

The company reported revenues of Dh908m for the period ended June 30, 2008, an increase of 20 per cent from the previous quarter's Dh756m and a 200 per cent increase from the comparable quarter's Dh302m in 2007.

Mobile revenue was reported at Dh670m, an increase of 20 per cent from the previous quarter's Dh560m and a 341 per cent increase from the comparable quarter's Dh152m in 2007.

"This has been achieved through the increased usage levels of existing mobile customers, in addition to the high subscriber acquisition levels achieved by the business and the unique offers and services introduced during this quarter," said a statement from du. Du's total number of mobile customers on June 30, 2008, crossed the 2.3-million-mark, an addition of 0.5 million in the quarter. The number of active subscribers, as defined by market regulator TRA, has grown to 1.85 million as on June 30, 2008, a quarter-on-quarter increase of 32 per cent.

Fixed line revenues rose to Dh208m, up 23 per cent from the previous quarter's Dh168m. "This increase is a reflection of the continued expansion of the company's fixed line network, which has led to an 18 per cent quarter-on-quarter increase in subscribers to 0.22 million. In the first quarter it was 0.18 million," the statement said.

Gross margin in the quarter was reported at Dh568m, an increase of 22 per cent from the previous quarter's Dh464m, and an increase of 252 per cent on the comparable quarter of 2007 at Dh161m.

Ahmed bin Byat, Chairman of du, said: "I am confident that we will be able to surpass market expectations and deliver shareholder value earlier than anticipated. du has reported a steady financial growth over the first half of 2008 which we expect to continue for the remainder of the year."

On bringing to his notice that subscribers have been complaining about glitches and coverage problems, Sultan said: "Of course we are aware of it. But things will improve as we are going to increase our investments in infrastructure."

Capital expenditure will be raised to Dh2 billion, he said. "du continued its extensive capital expenditure programme, expanding both its fixed and mobile networks and invested a total of Dh491 million in the quarter, bringing year to date investment to Dh888 million," a statement said.