Du posts 12.7% rise in third-quarter net profit as service revenue grows

Revenue climbs 10.5% as company continues to increase investments, chief executive says

Du's mobile customer base grew by 14.7 per cent to 7.4 million subscribers in the third quarter. Photo: du

Emirates Integrated Telecommunications Company, the Dubai telecom operator better known as du, reported a 12.7 per cent increase in its third-quarter net profit as service revenue and gross margins rose.

Profit in the three months ended September 30 rose to Dh319 million ($86.8m), from Dh283m a year earlier, the company said on Tuesday in a filing to the Dubai Financial Market, where its shares trade.

Revenue rose 10.5 per cent annually to Dh3.17 billion, from Dh2.87bn, as the company sustained demand for its broadband and mobile services, it said.

Earnings before interest, taxes, depreciation and amortisation grew by 18.5 per cent to Dh1.3bn, from Dh1.1bn from a year ago, while capital expenditure surged 93.5 per cent annually to Dh724m, from Dh374m.

The UAE government's efforts to support the economy after the coronavirus pandemic helped industries recover at a much faster pace compared to most other parts of the world with the telecom industry in particular experiencing a rebound in subscriber numbers, Fahad Al Hassawi, chief executive of EITC, told The National on Tuesday.

“We see things becoming even better than pre-pandemic levels. This is a very positive environment that we operate in and this is what makes me extremely optimistic on next year as well, with all the momentum that was created this year,” he said.

The company will continue to increase investments in 2023, focusing primarily on network and fibre infrastructure, which will always take the “lion's share”, Mr Al Hassawi said.

For the nine months to September 30, net profit rose more than 18 per cent to Dh922.4m, from Dh780.2m a year earlier, while revenue climbed 9.3 per cent to Dh9.4bn, from Dh8.6bn.

The company does not give guidance for its full-year financial report, Mr Al Hassawi said.

Du's full-year net profit for 2021 declined by about 24 per cent to Dh1.1bn, despite revenue rising 5.4 per cent to Dh11.68bn, owing to the effects of the pandemic.

“All market indicators look positive. We are very happy to see that the UAE and this region are continuing to see strong growth, so we are very optimistic about 2023,” he said.

Last month at Dubai's Gitex Global exhibition, Mr Al Hassawi said du was pressing forwards with more investments in its infrastructure and data centres, in line with the UAE's economic growth.

The company is also working on a "strong programme" to tap into the potential of the metaverse as it seeks to enhance its network capabilities, chief technology officer Saleem AlBlooshi told The National earlier in October.

Meanwhile, Du is considering introducing the metaverse to other segments of its business, particularly its enterprise and consumer bases, but this has to "really address needs", Mr Al Hassawi said on Tuesday.

“We are looking at all of this — definitely, this is something that is part of our plans. We are working with our partners in terms of finalising how and where [it will be implemented],” he said.

For the third quarter, revenue for du's mobile services unit continued to recover, growing 10.7 per cent annually to more than Dh1.4bn, with equipment sales generating Dh176m, the regulatory filing said.

Revenue for fixed services surged 22.2 per cent annually to Dh892m as the consumer segment continued to perform well, the company said.

Du's mobile customer base grew 14.7 per cent to 7.4 million subscribers, with its postpaid segment adding about 32,000 new customers — a fifth straight quarter of growth — to bring the total to around 1.4 million. Prepaid customers remained stable at six million.

The company also said that it has a debt-free balance sheet, as during the third quarter it fully repaid Dh200m that was drawn on its revolving credit facilities, leaving du with a net cash position of Dh910m and Dh3.8bn of undrawn facilities.

The results put du it in a position to grow its investments and services next year, Mr Al Hassawi said.

“We are one of the few companies that continued to invest in our network and capabilities [even during the pandemic], and this was a very wise decision as today we are seeing all these good results,” he said.