Emirates Integrated Telecommunications Company (EITC), the parent company of the UAE’s second-largest telecoms operator Du, posted a 41 per cent rise in the first quarter net profit on the back of rising revenues and tighter cost controls as well as a one off gain.
The Dubai-based company said net income for the three months to March end rose to Dh518.5 million, compared with Dh368.2m a year earlier, beating analyst expectations. The mean forecast from three analysts polled by Bloomberg was Dh443.3m.
“EITC had an excellent start to the year, with the new strategy delivering growth in revenue, subscribers and net profit,” said Osman Sultan, EITC’s chief executive.
“Growth has come from continued growth in our fixed line and other revenues. A positive for the quarter, the average revenue per user has also stabilised compared to the declining trends seen last year.”
_______
Read More:
Du parent reports second straight quarterly profit rise
Du's parent reorganises in search of new revenue streams
_______
The operator’s revenues rose 5 per cent to Dh3.33 billion in the first three months of the year compared to Dh3.17bn in the same period last year, bolstered by gains in fixed line revenue, which increased 6.3 per cent to Dh561m. Mobile revenue increased 0.4 per cent to Dh1.801bn in the first quarter versus Dh1.793bn in the corresponding period last year, the company said in a statement posted on the Dubai Financial Market, where its shares are traded.
Shares of Du rose 0.4 per cent to Dh4.91 at the close of trade.
The company said it registered a gain of Dh67m in the first quarter of 2018 for telecommunication licences and related fees. Sanyalak Manibhandu, head of research at FAB Securities, said the one-off was a reversal of regulatory costs. It wasn’t immediately clear to Mr Manibhandu why there was a gain in fixed line revenue and he said he was waiting to hear from the company on the matter.
The company said mobile subscribers rose 1.3 per cent in the first quarter to 9.3 million while fixed line subscribers increased 6.5 per cent to 753,000. Mr Sultan said that subscribers were staying longer with the company and spending more money.
“The important thing is that when we acquire customers, we make sure that we acquire customers that are going to be with us for a long period,” Mr Osman told reporters on a conference call after the results were released. “Not someone who is going to be with us just to take a line with benefits before moving on to another line.”
Much of the operator’s traditional mobile revenues come from prepaid customers who typically generate a lower average revenue per user than customers with monthly post-paid subscriptions. Mr Sultan said however that despite pressure on revenue from voice calls due to the use of internet-based applications, there was a massive demand for data usage.
“We remain cognisant of industry-wide challenges, with continued pressure on voice revenues and challenges in monetising data,” Mr Sultan said. “In 2017 we embarked on a transformation journey designed to respond to these new market realities, with a new strategy, as well as the launch of our fully digital brand Virgin Mobile."
Mr Sultan forecast growth of 0 per cent to 2 per cent earnings before interest, taxes and depreciation and amortization in 2018.
House-hunting
Top 10 locations for inquiries from US house hunters, according to Rightmove
- Edinburgh, Scotland
- Westminster, London
- Camden, London
- Glasgow, Scotland
- Islington, London
- Kensington and Chelsea, London
- Highlands, Scotland
- Argyll and Bute, Scotland
- Fife, Scotland
- Tower Hamlets, London
Dengue%20fever%20symptoms
%3Cul%3E%0A%3Cli%3EHigh%20fever%3C%2Fli%3E%0A%3Cli%3EIntense%20pain%20behind%20your%20eyes%3C%2Fli%3E%0A%3Cli%3ESevere%20headache%3C%2Fli%3E%0A%3Cli%3EMuscle%20and%20joint%20pains%3C%2Fli%3E%0A%3Cli%3ENausea%3C%2Fli%3E%0A%3Cli%3EVomiting%3C%2Fli%3E%0A%3Cli%3ESwollen%20glands%3C%2Fli%3E%0A%3Cli%3ERash%3C%2Fli%3E%0A%3C%2Ful%3E%0A%3Cp%3EIf%20symptoms%20occur%2C%20they%20usually%20last%20for%20two-seven%20days%3C%2Fp%3E%0A
The view from The National
Ahmed Raza
UAE cricket captain
Age: 31
Born: Sharjah
Role: Left-arm spinner
One-day internationals: 31 matches, 35 wickets, average 31.4, economy rate 3.95
T20 internationals: 41 matches, 29 wickets, average 30.3, economy rate 6.28
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The Cairo Statement
1: Commit to countering all types of terrorism and extremism in all their manifestations
2: Denounce violence and the rhetoric of hatred
3: Adhere to the full compliance with the Riyadh accord of 2014 and the subsequent meeting and executive procedures approved in 2014 by the GCC
4: Comply with all recommendations of the Summit between the US and Muslim countries held in May 2017 in Saudi Arabia.
5: Refrain from interfering in the internal affairs of countries and of supporting rogue entities.
6: Carry out the responsibility of all the countries with the international community to counter all manifestations of extremism and terrorism that threaten international peace and security
