Du's Q2 profit rises 26% on strong demand for mobile services

Revenue increased by 10% as the telecom company's mobile customer base grew to 7.4 million subscribers

Du's mobile customer base grew 13 per cent to 7.4 million subscribers in the second quarter of 2022. Photo: EITC
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Emirates Integrated Telecommunications Company, the Dubai-based telecom company known as du, reported a 26.2 per cent increase in net profit for the second quarter of 2022, boosted by sustained demand for broadband and mobile services.

The company's net profit rose to Dh303 million ($82.5m) in the three months through June, it said in a statement on Thursday.

Revenue rose by about 10 per cent to Dh3.14 billion, while earnings before interest, taxes, depreciation and amortisation (Ebitda) grew more than 12.1 per cent to Dh1.27bn due to a sharp increase in service revenue and gross margin expansion. Service revenue in the quarter hit a three-year high, du said.

For the three-month period, du's mobile customer base grew 13 per cent to 7.4 million subscribers, while its consumer broadband customer base surged almost 70 per cent to 473,000. Its post-paid segment added around 24,000 subscribers, which was a fourth consecutive quarter of growth, to reach 1.4 million subscribers.

The company's board of directors approved an interim cash dividend of Dh0.11 per share, representing a 10 per cent increase over the previous year’s interim dividend, the statement said.

EITC's performance in the second quarter reflects the success of its transformation projects, which are “progressing according to plan”, Malek Al Malek, du's chairman, said in the statement.

“EITC delivered an excellent set of results. The recovery trend seen towards the end of last year, is morphing into a growth trajectory that is driving revenue back to pre-Covid levels and an improvement in profitability,” he said.

Mr Al Malek added that EITC will continue to launch new products and services while “maintaining a dynamic and proactive commercial approach”.

EITC's aggressive efforts to expand its operations and services are in line with the rapid digital transformation taking place in the UAE.

Malek Al Malek, chairman of EITC, said the company will continue to launch new products and services while 'maintaining a dynamic and proactive commercial approach'. Photo: EITC

At a roundtable in Abu Dhabi last month, the company highlighted the importance of emerging technologies, especially 5G, and the UAE’s government digital strategy to maximise the positive effects of digital services, which is being heavily relied upon by users.

During February's Mobile World Congress in Barcelona, EITC and China's Huawei Technologies signed a preliminary agreement to develop multi-access edge computing that will help the Dubai operator diversify its communications services.

EITC also has a number of digital transformation programmes to support entrepreneurship and the workforce. Earlier this month, the company marked Small and Medium Enterprises Day by giving UAE entrepreneurs a platform to showcase their business offerings, a part of its initiative to support entrepreneurial projects led by Emirati youth.

Last week, on the occasion of World Youth Skills Day, a group of UAE students were invited to observe du employees as part of its efforts to train the future workforce in dynamic skills.

Quote
We have delivered three consecutive quarters of improvements and growth. Crucially, our service revenues have been and will continue to be a significant driver of profitability
Fahad Al Hassawi, chief executive of EITC

EITC said its mobile service segment continued to recover in the second quarter, with revenue rising 8.6 per cent to more than Dh1.4bn. Handset sales generated Dh196m in revenue, while fixed services revenue grew by almost a quarter to Dh855m on the back of strong consumer and enterprise segment performance.

Overall, service revenue increased more than 14.1 per cent to Dh2.26bn, EITC said.

The company's operating free cash flow rose by about 48 per cent to Dh709m, which is a combined result of an improving Ebitda and lower capital expenditure (capex), which moderated to Dh558m. EITC's capex profile is continuing to normalise following two consecutive years of high capital intensity, it added.

“We have delivered three consecutive quarters of improvements and growth. Crucially, our service revenues have been and will continue to be a significant driver of profitability,” said Fahad Al Hassawi, chief executive of EITC.

“Our commercial and investment efforts continue to bear fruits. Our customer acquisition on the consumer broadband services remains robust. We are also actively managing the efficiency of our business to drive profitability. Cash generation will sustainably improve as our capex programme continues to normalise,” he said.

Updated: July 21, 2022, 2:50 PM
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