Dubai telco du sees profit slump 43%
Despite falling profit, firm beats analysts’ estimates as mobile-data revenue rose
Du, the United Arab Emirates’ No.2 telecom operator, reported a 43 percent fall in fourth-quarter profit on Tuesday, beating analysts’ estimates as mobile-data revenue rose.
The firm, which ended rival Etisalat’s domestic monopoly in 2007, made a net profit of 570 million dirhams ($155.18 million) in the three months to Dec. 31. This was down from 994 million dirhams in the year-earlier period, Reuters calculated based on du’s previous financial results, when the company wrote back some tax provisions.
Analysts polled by Reuters on average forecast du would make a quarterly profit of 487.9 million dirhams.
Du said in a separate statement its board had approved a cash dividend of 0.19 dirhams per share.
UAE telecom operators are taxed via royalties under licenses from the federal government. The latter announced a new formula in December 2012 that includes a levy on revenue as well as profit and steadily increases the level of taxation on du to eventually reach parity with longer-established rival Etisalat.
Du said it paid an extra 183.5 million dirhams in royalties in 2013 compared with a year earlier.
The company’s full-year profit for 2013 was 1.99 billion dirhams, up slightly on 2012.
Fourth-quarter revenue was 2.87 billion dirhams, up 8.3 percent from a year earlier.
Annual revenue rose 9.7 percent to 10.8 billion dirhams.
Mobile data revenue increased 34 percent to 2.36 billion dirhams last year, with data now accounting for 28 percent of mobile revenue, up from 23 percent in 2012.
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