Du FY10 net profit boosted by federal royalty cut

3 Mar 2011

UAE telecoms operator Emirates Integrated Telecommunications Company (Du) has announced its financial results for the fourth quarter and full year ended 31 December 2010, reporting record revenues and continued customer additions. The company posted turnover of AED7.074 billion (USD1.93 billion) in full year 2010, an increase of 32% compared to AED5.339 billion in 2009, driven by strong wireless customer growth during the year, while earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 90% year-on-year to AED2.018 billion. Net profit before royalty leapt 132% from AED528 million in 2009 to AED1.226 billion a year later. Following the government’s announcement that Du would pay a 15% royalty rate for the year ended 31 December 2010, the company posted net profit after royalty of AED1.310 billion, up from AED264 million in 2009, when the operator paid a royalty fee of 50% of net income.

In the fourth quarter of 2010 Du generated record revenues of AED2.046 billion, a 34% increase year-on-year and up 17% over the previous quarter. EBITDA grew 84% versus Q4 09 to AED675 million and rose 29% quarter-on-quarter. Net profit before royalty increased by 106% year-on-year to AED431 million, while net profit after royalty totalled AED912 million.

Du reported a total wireless subscriber base of 4.333 million at 31 December 2010 (up from 3.477 million a year earlier), of which 260,000 were post-paid users (an increase of 89% year-on-year). Strong subscriber acquisition rates continued to drive growth in mobile revenues, which reached AED5.312 billion for the year 2010, up 43% year-on-year, and reached AED1.576 billion in 4Q10 (an increase of 42% over the year-ago quarter). Mobile ARPU grew to AED125 in the three-month period, up from AED112 in 4Q09. Revenues from the company’s fixed line business, including fixed telephony, TV and broadband, increased 23% from AED932 million in FY 2009 to AED1.146 billion a year later, and totaled AED326 million in 4Q10, a 27% year-on-year rise. At the end of 2010, the company reported a fixed line customer base of 561,000, compared to 405,900 a year earlier.

United Arab Emirates, Du (Emirates Integrated Telecommunication Company, EITC)