UAE Telco Du Posts 46% Rise In Q2 Net Profit

Du, the United Arab Emirates’ second biggest telecommunications operator, said it would pay Dhs1 billion ($272.3 million) to shareholders via special and interim dividends, after it posted a 46 per cent rise in second-quarter net profit on Thursday.

The firm, which ended rival Etisalat’s domestic monopoly in 2007, made a net profit after royalties of Dhs474 million in the three months to June 30, up from 326 million in the year-earlier period.

One analyst polled by Reuters had forecast du would make a quarterly profit of Dhs465.7 million for the second quarter.

Second-quarter revenue was Dhs2.66 billion, compared with Dhs2.37 billion a year ago.

Du said it would pay a special dividend of 10 fils per share and also initiated an interim dividend payment of 12 fils per share, taking its total dividend payout to 22 fils. “The 12 fils is considered as interim payment and can be a consistent policy going forward,” chief executive Osman Sultan told a media conference call.

Data services and postpaid customers are driving revenue growth, he said.

“There is room for potential growth in the UAE and this will mean heavy investments….You will see as well a regaining of this competitive momentum for us on the prepaid subscribers.”

Sultan said du was planning for the possibility of the UAE granting a third telecommunications licence, perhaps in 2015, and would be ready if that happened.

On the company’s international expansion, Sultan said: “Yes, we should start expanding.” He said: “The road map on how to expand in the region is clear,” but did not give details.

Sultan added that Egypt might issue an additional mobile telecommunications licence but he was sceptical of that opportunity on economic grounds. “We make good margins now and we want to maintain that.”

The company’s mobile customer base reached 6.65 million users, up 16.1 per cent from a year earlier, it said. UAE mobile penetration was 170 per cent, or 1.7 sim cards per resident, in 2012, according to the International Telecommunication Union.