UAE telco du sets special dividend after Q2 profit gain

Du, UAE's second biggest telecom operator, says it would pay $272.3 million to shareholders. (Photo courtesy: tradearabia.com)

Du, the United Arab Emirates’ second biggest telecommunications operator, said it would pay 1 billion dirhams ($272.3 million) to shareholders via special and interim dividends, after it posted a 46 percent rise in second-quarter net profit on Thursday.

The firm, which ended rival Etisalat’s domestic monopoly in 2007, made a net profit after royalties of 474 million dirhams in the three months to June 30, up from 326 million in the year-earlier period.

One analyst polled by Reuters had forecast du would make a quarterly profit of 465.7 million dirhams for the second quarter.

Second-quarter revenue was 2.66 billion dirhams, compared with 2.37 billion dirhams a year ago.

Du said it would pay a special dividend of 10 fils per share and also initiated an interim dividend payment of 12 fils per share, taking its total dividend payout to 22 fils. “The 12 fils is considered as interim payment and can be a consistent policy going forward,” chief executive Osman Sultan told a media conference call.

Data services and postpaid customers are driving revenue growth, he said.

“There is room for potential growth in the UAE and this will mean heavy investments....You will see as well a regaining of this competitive momentum for us on the prepaid subscribers.”

Sultan said du was planning for the possibility of the UAE granting a third telecommunications license, perhaps in 2015, and would be ready if that happened.

On the company’s international expansion, Sultan said: “Yes, we should start expanding.” He said: “The road map on how to expand in the region is clear,” but did not give details.

Sultan added that Egypt might issue an additional mobile telecommunications license but he was skeptical of that opportunity on economic grounds. “We make good margins now and we want to maintain that.”

The company’s mobile customer base reached 6.65 million users, up 16.1 percent from a year earlier, it said. UAE mobile penetration was 170 percent, or 1.7 sim cards per resident, in 2012, according to the International Telecommunication Union. ($1 = 3.6730 UAE dirhams)

SHOW MORE
Last Update: Wednesday, 20 May 2020 KSA 09:40 - GMT 06:40
Top