Dubai: Emirates Integrated Telecommunications Co (EITC) (du) said on Wednesday its net profit after royalty for the first half of the year rose 18 per cent, despite a near flat growth in revenues.
Du’s net profit after royalty rose to Dh965 million in the first six months from Dh812 million in the same period last year, while revenues rose to Dh6.68 billion from Dh6.422 billion.
“Our company had a strong second quarter and a solid first half of the year in 2018, with growth across all our key indicators. Despite a maturing telecom market, we are pleased to deliver excellent growth in revenue and net profit. The success of our efficiency programme is now evident in our EBITDA performance for the period, which is growing at a faster pace than revenue,” Mohammad Al Hussaini, chairman of EITC said in a statement. EBITDA stands for earnings before interest, taxes, depreciation and amortisation
The company said it proposed to give Dh589 million in interim dividends to its shareholders for the first half of 2018 at 13 fils per share, subject to approval at the general meeting, which will be held in September.
Net profit after royalty rose to Dh453 million in the three months to June from Dh447 million in the same period last year. Revenues rose by 2.9 per cent to Dh3.351 million.
“The quarter’s results are in line with expectations — with some evident competitive pressure. Note that in the first quarter, we had some reversal of some regulatory costs,” said Vrajesh Bhandari, portfolio manager at Al Mal Capital.
The company said its top line growth was supported by a solid performance in our fixed line business, which was up 9.4 per cent in the second quarter of 2018 compared to the same quarter last year.
“Mobile revenues, although impacted by seasonality with Ramadan and Eid being observed in the second quarter of the year, were stable at Dh1.82 billion in the second quarter of 2018, compared to Dh1.85 billion in the same quarter last year,” Osman Sultan, EITC’s Chief Executive Officer, said.
The company’s EBITDA grew by 4.7 per cent to Dh1.41 billion for the second quarter of the year.
“With EBITDA growth outperforming the 2.9 per cent growth in revenues, we are pleased to see the benefits of our efficiency programme positively impacting our profitability,” Sultan said.
Dividend play:
Du shares have been on the forefront on the Dubai Financial Market for its attractive dividend yields.
“Investors view telecom stocks as dividend plays and while the yield is healthy, it is in line with historical average and peer group. For du, the catalyst would be if the company allows foreign ownership. This would make it eligible for inclusion in indices attracting passive flows and rerate the stock,” Bhandari said.
Du shares closed 0.99 per cent higher to Dh5.12.
