du returns AED1.0 billion to shareholders

WAM DUBAI, 25th July, 2013 (WAM) — The Emirates Integrated Telecommunications Company PJSC (du) today announced its financial results for the second quarter of 2013.

Osman Sultan, du’s Chief Executive Officer, said, “We are delighted to return AED1.0 billion to our loyal shareholders this quarter by way of a special dividend and the start of du’s interim dividend programme. Our balance sheet and cash generation remains strong, and we are committed to generating attractive and sustainable returns to our shareholders by balancing the long-term investment needs of our business and shareholder expectations.

“Thanks to further progress made during the first half of this year in our key areas of strategic focus – market leading products and services and driving cost efficiencies through our business – we have achieved good growth in revenues and profits and our margins remain strong.

“This quarter we have developed new innovative propositions for our customers which we look forward to launching over the coming months against the backdrop of rapidly evolving consumer requirements and technology advances in the telecommunications industry. I remain excited about our longer term prospects as customer appetites for high speed data continues to increase. By focusing on efficiency and fostering innovation, I am proud to retain our position as the operator of choice.” Q2 2013 results analysis shows that the company delivered a strong revenue performance in the second quarter, with total revenues reaching AED 2.66 billion. This represented an increase of 12.05% year-on-year, up from AED 2.37 billion in Q2 2012 and an increase of 1.28% quarter-on-quarter, up from AED 2.63 billion in Q1 2013.

Similarly, Mobile revenues reached AED 2.07 billion, representing a 13.33% increase year-on-year, up from AED 1.82 billion in Q2 2012 and remained stable as compared to AED 2.06 billion in Q1 2013.

The company added 14,356 new mobile customers during Q2, bringing the total mobile customer base to 6,653,905 active mobile customers, a 16.07% increase from 5,732,907 active mobile customers in Q2 2012 and a 0.22% increase from 6,639,549 in Q1 2013. du estimates a market share of 46.5% according to the Telecommunications Regulatory Authority (TRA) and competitor reports.

du continues to strengthen its position as operator of choice by bringing state-of-the-art products to the market. The mobile postpaid customer base grew by 31.21% year-on-year to reach 589,862 active mobile postpaid customers in Q2 2013. The postpaid customer base now represents 8.9% of the total customer base.

Mobile ARPU decreased to AED 108 in Q2 2013, from AED 110 in Q1 2013.

Fixed line revenues were stable, growing 4.27% quarter on quarter and 2.66% year on year, to reach AED 416 million in Q2 2013, up from AED 399 million in Q1 2013 and AED 405 million in Q2 2012. In addition, fixed line customers showed stable growth, with 6,510 new lines, bringing the total to 578,026 lines, an yearly increase of 5.74% from Q2 2012 (546,640 lines) and a quarterly increase of 1.14% from Q1 2013 (571,516 lines).

Data revenues reached AED 573 million, representing a healthy increase of 44.81% from AED 396 million in Q2 2012. This reflected global sector trends, with data usage increasing due to the rapid adoption of smartphones and tablets. Quarter-on-quarter, data revenues increased 8.78%, up from AED 527 million in Q1 2013.

As the company’s capital position remains strong, the board proposed the return of approximately AED 1.0 billion to shareholders by way of a one-off, special dividend of AED 0.10 per ordinary share this quarter. In addition, du initiated the company’s interim dividend programme from Q2 2013 calculated at AED 0.12 per share in 2013.

An Extraordinary General Meeting will be held in August 2013 to approve the proposed dividend payment. The company will send an official notification to shareholders prior to the EGM date.

During Q2 2013, EBITDA increased 16.19% year-on-year, and 3.81% quarter-on-quarter to AED 1,094 million, compared to AED 941 million and AED 1,053 million respectively. EBITDA margins increased to 41.11% in Q2 2013, up by 1.46% from 39.65% in Q2 2012, and up by 1.00% compared to the previous quarter.

Net profit before royalty increased 19.48% year on year to AED 778 million in Q2 2013, up from AED 651 million in Q2 2012. Net profit before royalty increased 3.45% quarter on quarter from AED 752 million in Q1 2013.

The company registered a strong net profit after royalty reaching AED 474 million in Q2 2013, up from AED 326 million in Q2 2012. Quarterly, net profit after royalty increased 1.32% (up from AED 468 million in Q1 2013).

In line with strategic objectives, the company is continuing to maintain cost controls and is focusing on optimising efficiencies. This is demonstrated by the total overheads for the quarter, which remain stable at AED 700 million. As a percentage of revenue, overheads are 26.31%, representing a decrease of 4.57% over the same period a year ago, (30.88% in Q2 2012) and a quarterly decrease of 0.27% (26.58% in Q1 2013). Decrease in overheads is also in part attributed to the collection of bad debts during Q2 2013.

du’s capital expenditure programme remains stable and in line with that of a developed company with AED 323 million being invested during Q2 2013. Strategic capex spend and infrastructure investments are in line with evolving consumer requirements and technological advances.

WAM/AM/CM

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