Du profit surges 62% after paying royalty

Dubai-based telecom operator Emirates Integrated Telecommunications Company (better known as du) today announced a 61.8 per cent increase in its net profits to Dh333m after paying a 50 per cent royalty. In its interim financial statement for the quarter, the firm said that it has provided at an estimated charge of 50 per cent of the profit for the current period based on the current practice followed by the Abu Dhabi-based Etisalat, the other UAE telecom operator. Last year, the company paid royalty at a rate of 5 per cent of the total revenues plus 15 per cent of the net profit for the year before distribution. “No determination of the structure of the royalty fee for 2012 has been advised to the company as at March 31, 2012, and the company has provided at an estimated charge of 50 per cent of the profit for the current period. This estimate is based on the current practice followed by the other UAE telecom operator. The royalty charge for the three month period ended 31 March 2011 was provided at 50 per cent of net profit,” it said in its consolidated financial statement. Overall revenues for the firm increased 20.1 per cent year-on-year to Dh2.4 billion, up from Dh2 billion in Q1 2011, it said in a statement. The company added 320,600 mobile customers in the first quarter of 2012, bringing total mobile customer base to 5.5 million. Post-paid mobile customer base contributed 48.6 per cent of the growth in mobile revenues, which increased 21.8 per cent to Dh1.9 billion, it said. Mobile data revenues more than doubled year-on-year to Dh297 million from Dh141 million in Q1 2011. Osman Sultan, du’s Chief Executive Officer, said, “We have enjoyed a strong start to the year. We have achieved healthy growth in revenues, with strong performance from what we believe will be key drivers going forward, including mobile data revenue and our post-paid subscriber base. Our mobile data revenues in particular more than doubled year on year. We believe this will continue to grow in importance as a revenue stream, and we will seek to continue developing innovative products and services that encourage data usage. “While top-line growth has been significant, it has more importantly been achieved with greater efficiency. Our EBITDA and net profit have both grown significantly, with margins both increasing by more than seven percentage points, an achievement we are very pleased with. “Delivering value is at the heart of everything we do and is considered in every strategic decision. We believe that the areas we are focusing on will deliver the greatest value to all of our stakeholders – our customers, our employees, and of course our shareholders.”