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UAE telco du posts flat second quarter profit

UAE telco du posts flat second quarter profit

The firm reported declining year-on-year profits in the preceding 10 quarters

Du, the second largest telecoms operator in the United Arab Emirates, halted an earnings slump when it reported flat quarterly net profit on Tuesday.

Du, which ended rival Etisalat’s domestic monopoly in 2007, made a net profit of Dhs446.6m ($121.6 million) in the three months to June 30, compared to Dhs445.4m in the year-earlier period, according to a stock exchange statement.

The telecommunications firm had reported declining year-on-year profits in the previous 10 quarters, according to Reuters data.

The company’s results have been squeezed since late 2014 as growth of the mobile market has been offset by a steady increase in the royalty — or tax — paid to the government.

SICO Bahrain and EFG Hermes forecast du would make a quarterly profit of Dhs373.2m and Dhs409.3m, respectively.

Second-quarter revenue was Dhs3.26bn. This compares with Dhs3.07bn a year ago.

Du paid quarterly royalties — or tax — of Dhs527.2m, similar to what it paid in the prior-year period.

The company also said it would distribute a dividend of 13 fils per share for the first half of 2017, the same as the previous year period.

Chief executive Osman Sultan said on February 16 the telecommunications firm would target Dhs1bn ($272m) in savings by 2019 as government taxes erode profit.

In January, the company announced it had acquired a licence to operate Virgin Mobile-branded services in the UAE.

Thousands of customers have been signed up to Virgin Mobile-branded services since a low-key launch in the first week of Ramadan, which began in late May, Sultan told reporters on a conference call.

Du’s mobile customer base rose 1.5 per cent to 8.2 million subscribers in the second quarter.

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