Etisalat first-quarter profit up on strong UAE performance

Etisalat’s UAE operations saw revenues rise 5 per cent to Dh7.6 billion, thanks to growth in the e-Life and mobile segments.

Etisalat's UAE subscribers grew 4 per cent year on year to 12.5 million. Antonie Robertson / The National

Etisalat’s first-quarter profit rose 5 per cent in the first three months of the year, as lower operating costs offset falling revenues outside the UAE, it said yesterday.

The operator’s net income grew to Dh2.1 billion for the first quarter compared with Dh2bn for the same period last year.

The increase came in spite of a 3.1 per cent decline in revenues over the period, which came in below analyst forecasts.

Operating expenses, meanwhile, fell 7.5 per cent year-on-year to Dh8bn, thanks to lower network costs and lower depreciation and amortization expenses.

The operator’s royalty payment to the federal government hit Dh1.66bn for the quarter, in line with the payment for the same period in 2016.

“Etisalat has delivered a strong performance in the first quarter, a reflection of its strategy demonstrating [the] group’s ability to sustain momentum in spite of vastly changing global industry trends,” said Etisalat’s group chief executive Saleh Al Abdooli.

“As a group, we remain focused on maximising shareholders’ value, and on our customers who inspire us to explore new arenas and cross new heights.”

Etisalat’s UAE operations revenues rose 5 per cent to Dh7.6bn, thanks to growth in the eLife and mobile segments. UAE subscribers grew 4 per cent year-on-year to 12.5 million, led by a 5 per cent growth in mobile subscribers.

Revenues across the operator’s non-UAE footprint, meanwhile, fell by 14 per cent to Dh4.7bn, owing to strong competitive pressures in markets such as Morocco and Pakistan.

“The decline of local currencies against the dollar-pegged dirham is also part of the story,” said Matthew Reed, a Dubai-based analyst with the consultancy Ovum.

“Etisalat’s Egyptian unit was unfortunate in that, although it recorded a modest increase in revenue in local currency, it posted a big decrease in revenue in dirham terms due to the slide in the value of the Egyptian pound against the dirham.”

Egyptian revenues were 53 per cent lower at Dh500 million for the quarter, even as the operator’s subscriber base and average mobile data usage continued to grow

The subscriber base for Etisalat’s embattled Nigerian subsidiary shrank by 11 per cent to 19.5 million by the end of March, in the wake of a wide-scale disconnection process in line with a Sim registration programme mandated by the country’s regulator.

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