Du sees Q4 profit slide by 43%

Revenue up 8.3% but federal royalties eat into net earnings
Increased federal royalty payments have drained du?s quarterly earnings.
Increased federal royalty payments have drained du?s quarterly earnings.


Dubai telecom provider du today reported a 43% year-on-year drop in fourth-quarter net profit, according to a report from Reuters.

Earnings for the last three months of 2013 were AED570m ($155.18m), down from AED994m in the same period in 2012. However, du managed to beat analysts’ profit projections of AED487.9m for the period.

Fourth-quarter revenue was up 8.3% from a year earlier at AED2.87bn, but du’s costs have increased, year on year, due to regulatory charges. The UAE government introduced a revised formula for taxation of both du and national rival Etisalat in December 2012. Under the scheme, du’s levies will be increased until they are on a par with those of Etisalat. Du said it paid an extra AED183.5m in royalties in 2013 compared with a year earlier.

Du also reported mobile data revenue had increased 34% to AED2.36bn last year, with data now reaching 28% of total mobile revenue, up from 23% in 2012.

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