UAE's e& posts $599m first-quarter profit as subscriber base grows

Telecoms company posted $3.53 billion in revenue for the three-month period as it leveraged its 'flexibility' in the markets it serves

The subscriber base of e& in the UAE grew by 6 per cent annually to 13.9 million in the first quarter of 2023. Photo: E-Vision

UAE telecoms and technology company e&, formerly known as the Etisalat Group, recorded a net profit of Dh2.19 billion ($599 million) in the first quarter of 2023 as its subscriber base grew.

The company's UAE subscriber base grew by 6 per cent annually to 13.9 million while aggregate subscribers rose 3 per cent annually to 164 million, it said on Wednesday.

Revenue in the quarter stood at Dh13 billion ($3.53 billion), compared with Dh13 billion in the same period last year, the technology and investment group said in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

The 10 per cent annual drop in net profit, from Dh2.43 billion last year, was due to “strong fluctuations” in currency exchanges, said e& group chief executive Hatem Dowidar.

“The group’s performance in the first quarter indicates growth in the number of subscribers, revenues and profits in local currencies, but was impacted by the strong fluctuations in the currency exchange rate within the Egyptian and Pakistani markets,” he said.

The fluctuating exchange rates of the Egyptian pound and the Pakistani rupee, coupled with the “unprecedentedly” high inflation rates in the two markets have negatively affected revenue and profits reported in dirhams.

Earnings before interest, taxes, depreciation and amortisation (ebitda) stood at Dh6.2 billion in the three-month period, resulting in a margin of 48 per cent.

“This growth can be attributed to the group's flexibility and efforts to provide innovative business solutions and the latest technologies to the communities we serve,” Mr Dowidar said.

The group has also built unique digital experiences supported by strategic investments, to enhance its business portfolio, Mr Dowidar said.

Last month, e& signed a $400 million deal to acquire a majority stake in Careem’s Super App spin-off from Uber as part of efforts to expand its consumer digital offerings.

The company signed a binding agreement with Uber for a 50.03 per cent stake in Careem’s Super App business, e& said at the time.

“We will continue to explore future technologies and develop new verticals that will accelerate digital transformation, positively impacting businesses and people’s lives while maximising value creation for our shareholders,” Mr Dowidar said on Wednesday.

Abu Dhabi-based e& is expanding its presence and has been on acquisition spree.

It signed a deal last year with Abu Dhabi holding company ADQ to acquire a majority stake in video-streaming service Starzplay Arabia.

This year, e& increased its stake in Vodafone Group to 14 per cent as it continues to consolidate its shareholding in the British company as part of its international expansion plans.