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UAE telecom operator du posts 24% drop in Q1 net profit

UAE telecom operator du posts 24% drop in Q1 net profit

Growth of the mobile market has been offset by a steady increase in royalties paid to the government

Du, the UAE’s No.2 telecom operator, reported a 24 per cent fall in first-quarter net profit on Tuesday, missing analysts’ expectations.

The company has 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.

Du, which ended rival Etisalat’s domestic monopoly in 2007, made a net profit of Dhs364.9m ($99.35m) in the three months to March 31, down from Dhs480.1m in the year-earlier period.

SICO Bahrain had projected a net profit of Dhs447.33m and EFG Hermes had estimates of Dhs474.02m for the telecoms operator.

First-quarter revenue was Dhs3.17bn. This compares with Dhs3.09bn a year ago.

Du paid quarterly royalties – or tax – of Dhs486.3m, down from Dhs541.2m in the prior-year period.

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

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