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UAE’s Etisalat Q4 Profit Jumps 47%, Below Forecast

UAE’s Etisalat Q4 Profit Jumps 47%, Below Forecast

It made an annual net profit of Dhs8.9 billion, up from Dhs7.1 billion in 2013.

Abu Dhabi-listed Etisalat posted a 47 per cent jump in fourth-quarter profit on Thursday as its purchase of a majority stake in Maroc Telecom and lower taxes and impairment charges boosted its bottom line, although it missed analysts’ forecasts.

The United Arab Emirates telecommunications company, which operates in 19 countries across the Middle East, Africa and Asia, posted a net profit of Dhs2.14 billion ($582.7 million) in the three months to Dec. 31.

This compares with a profit of Dhs1.45 billion in the year-earlier period.

Three analysts polled by Reuters on average forecast Etisalat, the Gulf’s second biggest telecommunications operator by market value, would make a quarterly profit of Dhs2.43 billion.

Etisalat made an annual net profit of Dhs8.89 billion in 2014, up from Dhs7.08 billion a year earlier.

It paid Dhs5.33 billion in royalties – or tax – to the UAE federal government last year. That compares with royalties of Dhs6.12 in 2013.

The company attributed its increased profit to higher earnings before tax, interest depreciation and amortisation (EBITDA), plus lower taxes and impairment charges.

Weighing on its bottom were higher depreciation and amortisation expenses, lower earnings from associates, higher finance costs and foreign exchange losses.

Full-year revenue was Dhs48.77 billion, up 26 per cent on 2013, and of which Dhs27.1 billion was from the UAE.

Fourth-quarter revenue climbed 33 per cent to Dhs13.04 billion; 7 billion was generated domestically.

Etisalat’s total subscriber rose 14 per cent year-on-year to Dhs169 million, mainly due to its acquisition of Marc Telecom, which contributed about 40 million subscribers.

The company’s Saudi Arabia affiliate Mobily in November cut previously announced profits for 2013 and the first half of last year and then reported a full-year loss for 2014 when its audited results were announced on Wednesday. It originally said it made a small profit in 2014.

Etisalat described the “resulting impact” from Mobily as “immaterial” in its earnings statement.

The company proposed to pay a Dhs0.35 per share cash dividend for the second half of 2014, matching its dividend for the year-ago period.

For all of 2014, its dividend will be Dhs0.70 per share and 10 per cent in bonus shares.

Etisalat also proposed upping its share capital to Dhs10 billion from Dhs8 billion. It did not state how it would achieve this and it is unclear if this includes the bonus share issue.

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