du misses profit expectations

Operator paid royalties of 437.9 million dirhams in the first three months of 2015
Osman Sultan, CEO at du.
Osman Sultan, CEO at du.

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du has reported a 0.6% fall in first-quarter profit, according to Reuters. This results miss analysts' approximations as its mobile subscriber base shrunk slightly and it paid a higher tax rate than a year earlier.

The operator made a net profit of 487.1 million dirhams ($132.6 million) in the three months to March 31, down from 490.3 million dirhams from the prior-year period. However, analysts polled by Reuters on average forecast du would make a quarterly profit of 564.7 million dirhams.

The company had 3.05 billion dirhams first-quarter revenue, compared to 2.96 billion dirhams a year ago.

The company had 7.48 million mobile subscribers as of March 31, down 0.9% from 12 months earlier, a drop du's chief executive Osman Sultan attributed to a government-led campaign to re-register mobile accounts in an effort to tackle misuse of mobile phones for criminal activity, as Reuters reports.

du paid royalties of 437.9 million dirhams in the first three months of 2015, up from 375 million dirhams in the prior-year period. For 2014, du paid 10% of its regulated revenue -- which excludes the likes of handset sales -- and 25 profit of its regulated profit in royalties. These taxes have risen to 12.5 and 30%, respectively, this year.

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