Du added fewer than 200,000 mobile customers in the second quarter as its rate of subscriber growth slowed amid intensifying competition.
The operator posted a profit of Dh325.5 million (US$88.6m) during the period.
Its revenues fell short of analysts' expectations as du added just 196,300 mobile subscribers during the period, compared with 320,600 in the first three months of the year.
Osman Sultan, the chief executive of du, said the growth in mobile subscribers was inevitably declining after a period of rapid customer acquisition since the company launched in 2007.
"These are growth rates that cannot be sustainable," he said. "The market is becoming more penetrated."
The company's share of the UAE mobile market declined by a fraction to 46.5 per cent compared with its bigger rival Etisalat.
However, Mr Sultan said the second-quarter performance was partly due to seasonality after a strong start to the year as promotional campaigns from last year paid off.
He said du was focusing on boosting revenues and an ongoing efficiency drive and expected further growth in mobile data as a percentage of its business.
While the second-quarter profits were a 2.3 per centdecline on the previous period, year-on-year figures looked rosier with the company reporting a 57.1 per cent rise in profits compared with the same period last year.
That result cheered investors, who sent du's shares rising 1.2 per cent to Dh3.22 in Dubai yesterday.
Yet the results still fell short of expectations. Analysts polled by Reuters had forecast the company would make a second-quarter profit of Dh332m.
It said revenues had increased by 12.9 per cent to Dh2.45 billion in the second quarter, up from Dh2.2bn during the same period last year.
However, revenues rose by just 0.2 per cent in comparison with the first quarter, lower than some had expected.
Petr Molik, the head of the research division at Mena Corp, said the quarter was "mildly disappointing" after a strong start to the year.
"Although the previous quarter was hard to beat, we were surprised by the lack of growth in the top line of Dh2.45bn and especially disappointing mobile revenues," he said. "We expected Dh2.55bn of revenues."
Average revenue per user for du dropped to Dh112 per month compared with Dh119 in the previous quarter. "This is the worst ... du has shown in almost two years," said Mr Molik.
Ibrahim Masood, a senior investment officer for asset management at Mashreq, said the performance in the second quarter was "pretty flat".
"The quarter-on-quarter comparison seems pretty worrying. But I think there is still room for growth," he said.
"The telecom market is definitely getting a bit challenging. These guys need to push hard for growth."
Matthew Reed, a senior analyst at Informa Telecoms & Media in Dubai, said du was "still doing very well" in the mobile market. He attributed the decline in growth to seasonality, although he agreed the market was becoming more competitive.
Second-quarter results for du come a few days after Etisalat reported positive second-quarter results. The Abu Dhabi-listed company on Wednesday revealed a turnaround in its financial performance, having posted a 17 per cent rise in net profit to Dh1.9bn in the second quarter compared with the same period last year.
bflanagan@thenational.ae
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What is Folia?
Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.
Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."
Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.
In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".
There are also plans to take Folia to several more locations throughout the Middle East and Europe.
While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."
The Energy Research Centre
Founded 50 years ago as a nuclear research institute, scientists at the centre believed nuclear would be the “solution for everything”.
Although they still do, they discovered in 1955 that the Netherlands had a lot of natural gas. “We still had the idea that, by 2000, it would all be nuclear,” said Harm Jeeninga, director of business and programme development at the centre.
"In the 1990s, we found out about global warming so we focused on energy savings and tackling the greenhouse gas effect.”
The energy centre’s research focuses on biomass, energy efficiency, the environment, wind and solar, as well as energy engineering and socio-economic research.
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Six things you need to know about UAE Women’s Special Olympics football team
Several girls started playing football at age four
They describe sport as their passion
The girls don’t dwell on their condition
They just say they may need to work a little harder than others
When not in training, they play football with their brothers and sisters
The girls want to inspire others to join the UAE Special Olympics teams
Why your domicile status is important
Your UK residence status is assessed using the statutory residence test. While your residence status – ie where you live - is assessed every year, your domicile status is assessed over your lifetime.
Your domicile of origin generally comes from your parents and if your parents were not married, then it is decided by your father. Your domicile is generally the country your father considered his permanent home when you were born.
UK residents who have their permanent home ("domicile") outside the UK may not have to pay UK tax on foreign income. For example, they do not pay tax on foreign income or gains if they are less than £2,000 in the tax year and do not transfer that gain to a UK bank account.
A UK-domiciled person, however, is liable for UK tax on their worldwide income and gains when they are resident in the UK.
UAE currency: the story behind the money in your pockets
