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Etisalat third quarter net profit rises less than expected

Abu Dhabi-listed Etisalat reported a 22 percent rise in third-quarter net profit on Wednesday, missing analyst estimates despite rising domestic income, lower taxes and the firm's take-over of Maroc Telecom bolstering its bottom line.

The United Arab Emirates' former telecom monopoly, which operates in 19 countries across the Middle East, Africa and Asia, made a net profit of 2.22 billion dirhams ($598.97 million) in the three months to September 30, it said.

This compares with a profit of 1.83 billion dirhams in the year-earlier period.

Analysts polled by Reuters on average forecast Etisalat, the Gulf's No.2 telecom operator by market value, would make a quarterly profit of 2.65 billion dirhams.

Quarterly revenue was 13.2 billion dirhams, up from 9.59 billion dirhams a year earlier.

Domestic third-quarter revenue rose 10 percent to 6.8 billion dirhams, while 48 percent of group revenue came from its international units, up from 35 percent in the year-ago period.

This follows Etisalat's purchase of a 53 percent stake in Maroc Telecom for 4.14 billion euros in May. Former monopoly Maroc Telecom also has operations in Gabon, Mauritania, Burkina Faso and Mali.

Etisalat's international operations will account for at least 50 percent of group revenue in the future, Etisalat chief executive Ahmad Julfar said in a statement.

"Africa remains an important strategic region for our business," he said.

Third-quarter revenue from its African cluster was 3.7 billion dirhams, up more than 400 percent from a year ago following its consolidation of Maroc Telecom.

Etisalat paid an effective royalty - or tax rate - of 44 percent on its third-quarter net profit, down from 50 percent a year ago due to changes in the way the government calculates this fee.

This meant Etisalat paid 1.72 billion dirhams in royalties in third quarter, down from 1.84 billion dirhams.

Etisalat's margin on earnings before interest, tax, depreciation and amortisation (EBITDA) was 53 percent in the third quarter, up from 48 percent a year earlier.

Copyright Reuters, 2014


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Banking Review 2014

Foreign Debt $62.649bn
Per Cap Income $1,512
GDP Growth 4.24%
Average CPI 8.6%
Trade Balance $-1.988 bln
Exports $1.835 bln
Imports $3.823 bln
WeeklyOctober 05, 2015
Reserves $18.349 bln