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Dubai telco du Q1 net profit doubles; beats forecasts
Q1 net profit after royalty payment 205.8 mln dirhams; Added 272,000 mobile subscribers in Q1; Co to continue provision for royalty at 50 pct; Q1 results beat analysts forecasts of 203.7 mln dirhams
April 25, 2011 10:36 by Reuters
UAE telecom operator du said its first-quarter net profit more than doubled, beating analysts forecasts, after the company added more customers during the quarter and continued to invest in infrastructure.
The firm, which now has an estimated 40 percent share of the UAE mobile market, reported a first-quarter net profit of 205.8 million dirhams ($56.03 million) after providing for royalties, up from 97.1 million dirhams in the year-earlier period, it said on Monday.
Analysts polled by Reuters on average had expected the firm to post a quarterly net profit of 203.7 million dirhams for the first-quarter.
The company said it will continue to provision for royalty payments to the government at 50 percent of its profits until it is advised by the government on the rate for the year.
“In line with our previous practice, we have decided to continue to provision for royalty at 50 percent,” Osman Sultan, du’s chief executive officer, said in a statement to the bourse.
The operator paid a 15 percent royalty fee to the government in 2010, while its rival Etisalat paid 50 percent of its annual net profits as royalties.
Net profit for the quarter before royalties was 412 million dirhams, compared with 194 million dirhams for the same period a year ago.
Du said it added 272,000 net active mobile subscribers during the quarter and invested 477 million dirhams in its infrastructure.
First-quarter revenue jumped 29 percent to 2.04 billion dirhams, compared with 1.58 billion dirhams for the year earlier period.
Abu Dhabi-based Etisalat lost its monopoly in the UAE market to du in 2007, which has been aggressively expanding outside its home market since then.
(Reporting by Dinesh Nair; Editing by Matt Driskill) ($1=3.673 UAE Dirham)