Du will hand over 15 per cent of its net profit for last year, as it did for 2010. But du has also been told to pay the Government 5 per cent of last year's revenue. Pawan Singh / The National
Du will hand over 15 per cent of its net profit for last year, as it did for 2010. But du has also been told to pay the Government 5 per cent of last year's revenue. Pawan Singh / The National

Du shares hit after big increase in royalty fees



The telecommunications company du may have to pay an estimated Dh443 million (US$120.6m) in extra fees to the federal Government after changes to the royalty scheme.

The company will hand over 15 per cent of its net profit for last year, as it did for 2010. But du has also been told to pay the Government 5 per cent of last year's revenue.

Shares in the telecoms company fell the most in six weeks after the announcement on the Dubai Financial Market yesterday. The stock closed 2.3 per cent lower at Dh3 after rising in earlier trading.

"From our point of view, it's not so good, as we were assuming the company would pay the same as last year," said Zaineb El Beheiry, an analyst at NAEEM Holding, adding it was uncertain whether the 5 per cent charge was a one-off or would be imposed every year.

Historically, Etisalat, du's rival, has paid half of its profit as royalties to the Government, a fee that the operator wants reviewed. Mohammed Omran, the chairman of Etisalat, has said he would like to see its royalty charges lowered.

Du paid its first royalty fee last year - four years after its launch in 2007. The company's bigger contribution this year comes as it carves out a bigger market share from Etisalat.

"Generally speaking, a royalty is like a dividend. When things are going well, the company is less in need of cash. It's a reasonable thing to do," said Farouk Soussa, the chief economist in the Middle East at Citi.

Du is due to report next month its results for last year's fourth quarter. Those figures will be used to determine exactly how much it has to pay the Government.

The operator is expected to record another year of double-digit growth.

Profit soared 50 per cent year on year from Dh236m up to Dh489m in the third quarter. Analysts also expect du to post revenue of Dh8.8 billion this year.

A rise in the firm's mobile data revenue and an increase in the number of post-paid customers have helped to boost the bottom line this year. "Despite the royalty fee we still expect du to report strong results," said Ms El Beheiry. "We expect du to pick up revenue from fixed lines and other services."

Du had set aside about half its net profit for last year in preparation for royalty payments. Cash left over is likely to be used to help reduce debt. Du last year had an additional Dh600m to pay back debt after the Government levied a lower-than-expected royalty charge.

Du is 39.5 per cent owned by Emirates Investment Authority, the sovereign fund that is also a major shareholder in Etisalat, 19.75 per cent by Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, and 19.5 per cent by Dubai Holding, with the remaining stake held by public shareholders.

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Courtesy: Carol Glynn

Profile of MoneyFellows

Founder: Ahmed Wadi

Launched: 2016

Employees: 76

Financing stage: Series A ($4 million)

Investors: Partech, Sawari Ventures, 500 Startups, Dubai Angel Investors, Phoenician Fund

UAE'S YOUNG GUNS

1 Esha Oza, age 26, 79 matches

2 Theertha Satish, age 20, 66 matches

3 Khushi Sharma, age 21, 65 matches

4 Kavisha Kumari, age 21, 79 matches

5 Heena Hotchandani, age 23, 16 matches

6 Rinitha Rajith, age 18, 34 matches

7 Samaira Dharnidharka, age 17, 53 matches

8 Vaishnave Mahesh, age 17, 68 matches

9 Lavanya Keny, age 17, 33 matches

10 Siya Gokhale, age 18, 33 matches

11 Indhuja Nandakumar, age 18, 46 matches

Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

KEY DATES IN AMAZON'S HISTORY

July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone

Our legal advisor

Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.

Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation. 

Education: Sagesse University, Beirut, Lebanon, in 2005.

WISH

Directors: Chris Buck, Fawn Veerasunthorn
Stars: Ariana DeBose, Chris Pine, Alan Tudyk
Rating: 3.5/5

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England 2
Cahill (3'), Kane (39')

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COMPANY PROFILE

Name: Lamsa

Founder: Badr Ward

Launched: 2014

Employees: 60

Based: Abu Dhabi

Sector: EdTech

Funding to date: $15 million

The bio

Who inspires you?

I am in awe of the remarkable women in the Arab region, both big and small, pushing boundaries and becoming role models for generations. Emily Nasrallah was a writer, journalist, teacher and women’s rights activist

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Yoga relaxes me and helps me relieve tension, especially now when we’re practically chained to laptops and desks. I enjoy learning more about music and the history of famous music bands and genres.

What is favourite book?

The Perks of Being a Wallflower - I think I've read it more than 7 times

What is your favourite Arabic film?

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What is favourite English film?

Mamma Mia

Best piece of advice to someone looking for a career at Google?

If you’re interested in a career at Google, deep dive into the different career paths and pinpoint the space you want to join. When you know your space, you’re likely to identify the skills you need to develop.  

 

Ruwais timeline

1971 Abu Dhabi National Oil Company established

1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants

1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed

1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.  

1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex

2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea

2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd

2014 Ruwais 261-outlet shopping mall opens

2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies

2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export

2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.

2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery 

2018 NMC Healthcare selected to manage operations of Ruwais Hospital

2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13

Source: The National

COMPANY PROFILE

Company name: Almouneer
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Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
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THE BIO:

Favourite holiday destination: Thailand. I go every year and I’m obsessed with the fitness camps there.

Favourite book: Born to Run by Christopher McDougall. It’s an amazing story about barefoot running.

Favourite film: A League of their Own. I used to love watching it in my granny’s house when I was seven.

Personal motto: Believe it and you can achieve it.


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