du 2015 profit falls 8 per cent to Dh1.9 billion

Investors are watching closely the performance of du shares, as the telco could soon follow Etisalat and loosen its foreign ownership restrictions.

du had reported declining profits in the preceding four quarters. Philip Cheung / The National
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Du, the UAE’s second telecoms operator, posted an 8 per cent decline in its 2015 net profit, as roy­alty fees paid to the government weighed on earnings.

Du, which ended Etisalat’s monopoly in 2007, said that net profit for 2015 was Dh1.9bn, compared to Dh2.1bn in 2014. The profit is after royalty fees to the government. Du said that before royalties, profit grew by 4.3 per cent to Dh3.86bn.

Revenue in 2015 inched up 0.8 per cent to Dh12.3bn from Dh12.2bn a year earlier.

Du said that the federal government’s “My number, My identity campaign”, which requires people to register their numbers, had affected evenues for 2015. Earnings before interest, taxes, depreciation and amortization (Ebitda) increased 7.7 per cent to Dh5.42bn on “increased operational efficiency”.

“Earnings at Dh462m is weaker than our forecast of Dh512m for the fourth quarter,” said Mr Lakhotia. “We believe that du had higher than expected depreciation, amortization or possibly a high impairment charge in the fourth quarter. We will know the details once full financials are out.”

Investors are watching closely the performance of du shares, as the telco could soon follow Etisalat and loosen its foreign ownership restrictions. Dubai-based Arqaam Capital said this month that du was “the next candidate” in the telecoms sector for a change in its foreign-ownership limits.

Du said earlier that no decision had been taken yet, but it did not dismiss the possibility of opening itself to foreign ownership.

selgazzar@thenational.ae

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