Du's first-quarter net profit jumps 19% on higher revenue

The telecom company's income for the three-month period stood at $100.74 million

Du's revenue in the first quarter rose by 10 per cent annually to Dh3.4 billion. Photo: du

Emirates Integrated Telecommunications Company, the Dubai telecom operator better known as du, reported a 19 per cent jump in its first-quarter net profit on the back of higher revenue.

Net profit in the three months to the end of March climbed to Dh370 million ($100.74 million), from Dh311 million a year earlier, the company said on Wednesday in a filing to the Dubai Financial Market, where its shares are traded.

Revenue rose by 10 per cent annually to Dh3.4 billion in the January to March period, from Dh3.1 billion in the same period last year, driven by higher demand for fixed and mobile services.

Mobile service revenue grew 6.3 per cent to Dh1.49 billion while fixed services revenue jumped 15 per cent to Dh936 million on “sustained demand from consumer and enterprise customers”.

Earnings before interest, taxes, depreciation and amortisation (ebitda) rose 7.7 per cent to Dh1.36 billion, from Dh1.26 billion a year ago.

Du ended the quarter with 8.2 million mobile phone subscribers as a result of net additions across the postpaid and prepaid segments. It also attracted about 18,000 new broadband customers in the first quarter.

“We are optimistic for this year [in terms of revenue and profit growth],” chief executive Fahad Al Hassawi told The National in an interview.

“The market is growing from all aspects, [be it] tourism, business, number of residents, and we see growth across all our products … mobile and fixed.”

The UAE’s economy continued to recover from the coronavirus-induced slowdown on the back of government initiatives, higher oil prices, a strong performance in its property sector and a rebound in travel and tourism.

After growing by 7.6 per cent last year, the highest in 11 years, the UAE economy is expected to expand by 3.9 per cent this year and 4.3 per cent in 2024, the Central Bank said in March.

Du's total capital expenditure for the first quarter stood at Dh408 million at a time when the company is focusing on its IT transformation and expanding its fibre network.

“We will continue to spend on the 5G network, which is something we started a couple of years ago, and we reached a very good place from outdoor coverage reaching 95 per cent across the UAE. Now we are working on improving any remaining spots from the 5G point of view,” Mr Al Hassawi said.

The company will also invest in “improving our own IT system and digital capabilities” but has no plans to raise debt.

“We are comfortable from that point of view and don’t have such need, and we are able to generate [cash] from within the business,” he said.