Du's Q2 profit surges 11.4% on strong subscriber growth

The company's second-quarter capital expenditure increased more than 27% to Dh649m

Telecoms operator du grew its subscriber numbers by 2.3% to 6.6 million in the second quarter. Ryan Carter / The National

Emirates Integrated Telecommunications Company, also known as du, reported an 11.4 per cent increase in second-quarter net profit, buoyed by an increase in the number of mobile and fixed subscribers.

The company's net profit for the three months ending June 30 rose to Dh240 million, nearly Dh25m more than the same period last year, the company said in a statement on Monday to the Dubai Financial Market, where its shares trade. However, net profit was nearly 6.6 per cent lower than in the first quarter.

The UAE's second-biggest telecoms operator's revenue grew almost 7 per cent annually to Dh2.8 billion on strong demand for 5G handsets and broadband services, the company said.

“We proved we can rebound from a challenging environment and deliver growth … we remain vigilant on our cost base as cost reduction initiatives helped push Ebitda [earnings before interest, tax, depreciation and amortisation] and net profit up,” said Fahad Al Hassawi, chief executive of the operator.

Fahad Al Hassawi, EITC's chief executive, says the company is investing aggressively in digital transformation and other focus areas. Antonie Robertson / The National

“With our customers in mind, we invested Dh649m on our infrastructure as we seek to better serve them,” he added.

During the April-June period, the company’s Ebitda increased 7.3 per cent on an annual basis to Dh1.1bn. Capital expenditure grew 27.5 per cent on the same period last year as the company continued to modernise its infrastructure. Operating free cash flow fell 11.7 per cent to Dh481m.

Founded in 2005 as the UAE’s second licensed telecommunications provider, du is 50.12 per cent owned by Emirates Investment Authority, 10.06 per cent by Mubadala Investment Company and 19.7 per cent by Emirates International Telecommunications, with the remainder of its shares being in public hands.

The company’s mobile revenue stabilised at Dh1.3bn in the second quarter, the company said.

Fixed-line revenues, which grew more than 6.5 per cent year-on-year, reached an all-time high of Dh687m. Other revenues increased 21.5 per cent annually to Dh873m, buoyed mainly by handset sales as well as higher wholesale revenues.

Its mobile customer base grew 2.3 per cent to 6.6 million in the second quarter. The company also added 31,000 new broadband subscribers and ended the period with 279,000 broadband customers.

“EITC had a solid performance during the second quarter. It is satisfying to see operating and financial metrics returning to growth,” Mohamed Al Hussaini, chairman of the company, said.

“The company continues to deploy significant resources towards infrastructure expansion and modernisation," he said, adding that the board approved an interim dividend of Dh0.10 per share.