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.

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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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