UAE’s Etisalat Q3 net profit falls 23 percent
Third-quarter net 1.7 bln dirhams vs f'cast 2.05 bln; Q3 revenue 7.3 bln dirhams, down from nearly $8 bln year before; No final agreement on Zain deal.
October 19, 2010 4:06 by Reuters
Former state monopoly Emirates Telecommunications Corp (Etisalat) reported a 23 percent fall in third-quarter net profit on Tuesday, as it seeks expansion abroad to tap into new markets.
The Arab world’s second-largest telecom operator by market value said net profit fell to 1.7 billion dirhams ($463 million) in the quarter from 2.25 billion a year ago.
Analysts polled by Reuters had on average forecast a net profit of 2.05 billion dirhams and the result was below the lowest forecast of 1.95 billion.
Third-quarter revenue totaled 7.3 billion dirhams, versus just under $8 billion in the same period a year ago.
Abu Dhabi-based Etisalat has been aggressively expanding outside the UAE since it lost its monopoly to Dubai-based competitor du in 2007.
The operator had said it was bidding for a 46 percent stake in Kuwaiti telecoms group Zain, the Gulf Arab region’s third-largest telecoms firm.
“No final agreement has been reached at the date of approval of the … financial information as this offer depends on the fulfillment of specific requirements and conditions that must be met to finalise the deal,” Etisalat said in a statement.
If concluded, an investment in Zain would help propel Etisalat into high-growth markets in the Middle East where Zain has a strong foothold.
Last week, Zain posted a 96 percent rise in third-quarter net profit, boosted by a sharp increase in customer numbers.
Etisalat is three-fifths owned by the United Arab Emirates government. The firm’s nine-month profit fell to 5.6 billion dirhams from 6.4 billion in the period to Sept. 30 last year.
Shares in Etisalat ended 2.6 percent higher on Tuesday before the earnings were published.
(Reporting by Rachna Uppal; Editing by David Holmes) ($1=3.673 Uae Dirham)