Du's Q1 profit surges 21% on strong subscriber growth

The company's net profit for the three months ending March 31 rose to $84.7m

Du's revenue grew almost 9 per cent annually to more than Dh3.1 billion ($843.9) in the first quarter. Lee Hoagland / The National

Emirates Integrated Telecommunications Company — also known as du — has reported a 21 per cent increase in first-quarter net profit, buoyed by growth in the number of mobile and fixed-line subscribers.

The company's net profit for the three months ending March 31 rose to Dh311 million ($84.7m), it said in a statement on Thursday to the Dubai Financial Market, where its shares trade.

The UAE's second-biggest telecoms operator, reported an increase of more than 10 per cent in mobile customers across the prepaid and postpaid segments, ending the quarter with 7.5 million subscribers.

It was the third consecutive quarter of net-additions in the postpaid segment while its prepaid customer base increased on the back of “targeted offers, brisk tourism activity and continued improvement in the economic environment”, the statement said.

The telecom operator also added 48,000 new broadband customers during the quarter ― up more than three times year-on-year. It ended the last quarter with 439,000 broadband customers.

Revenue during the first quarter grew close to 9 per cent annually to more than Dh3.1 billion on strong demand for services, du said.

The results confirm that the company's “recovery trajectory is on a sustainable path” and that the Covid-19 impact is phasing out, said Fahad Al Hassawi, du's chief executive.

“We continued to experience increased mobility and a general improvement in the economic environment. We also continued our efforts to deploy our innovative portfolio of products and services and to implement the transformation of the company.”

The company’s mobile service revenue increased almost 7 per cent to Dh1.4bn in the first quarter, du said. Meanwhile, handset sales generated Dh216m in the January to March period.

Fixed-line revenue, which grew almost 23 per cent, reached Dh815m, driven by “sustained demand from consumer and enterprise customers”.

“Our considerable infrastructure investment allows us to continue innovating and improve customer experience … Furthermore, this quarter’s performance validates our strategy … We are committed to re-invigorating our core mobile and fixed operations while pursuing modernisation of our infrastructure,” Mr Al Hassawi said.

During the first quarter, the company’s earnings before interest, taxes, depreciation and amortisation, or Ebitda, increased more than 13 per cent on an annual basis to Dh1.26bn. The impact of higher Ebitda was “partially offset by increased depreciation charges triggered by our infrastructure investment”, the statement said.

Founded in 2005 as the UAE’s second licensed telecoms provider, du is 50.12 per cent owned by Emirates Investment Authority, 10.06 per cent by Mubadala Investment Company and 19.7 per cent by Emirates International Telecommunications, with the remainder of its shares traded publicly.