Etisalat profit hit by impairment charge on India ops

The UAE’s incumbent telecoms operator Etisalat has announced that its net profit for the twelve months ended 31 December 2011 declined 23% to AED5.84 billion (USD1.59 billion) from AED7.63 billion the previous year, after writing off investments worth AED3.04 billion in India. In a statement to the Abu Dhabi Securities Exchange, the company said it had booked an impairment charge of AED3.04 billion before federal royalty against the full carrying value of goodwill, amounting to AED1.2 billion, and net assets of its operations in India, including licences. The net impact of this charge on its consolidated net profit after federal royalty amounts to AED1.02 billion, the firm added. The move follows a decision by the Supreme Court of India to cancel 122 2G operating licences – including that of Etisalat DB (formerly known as Swan Telecom), in which Etisalat owns a 45% stake – earlier this month. The Abu Dhabi-based telco said it ‘is continuing to assess the legal consequences of the Supreme Court’s decision and its strategic operations in India,’ adding that there may be further impacts on the company’s financial statements. According to Reuters calculations, Etisalat had a fourth-quarter net profit of AED710 million, compared to AED2.02 billion in the year-ago period. The company said it generated revenue of AED32.2 billion in 2011, up 1% from the AED31.9 billion reported the previous year. At 31 December 2011 Etisalat reported a total of 7.8 million mobile subscribers in its domestic market, as well as 1.05 million fixed line telephony users and 1.41 million internet customers.