UAE telco du has suffered a decline of 9.7% in its net profits for the year 2016 relative to the previous year. It has proposed a final dividend of AED 0.21 bringing the annual dividend payment to AED 0.34 per share (subject to approval at AGM). This includes an AED 0.13 per share interim dividend paid in October 2016.
Ahmad Bin Byat, chairman of EITC, said: "During 2016, we continued to focus on operational efficiency and enhancing the overall customer experience. By embracing new technology and integrating innovation across our entire business we were able to maximise value for both our customers and shareholders."
Total revenues increased 3.2% YoY in 2016 and EBITDA decreased 1%. Free cash flow before royalty decreased 5.6% YoY. Mobile subscriber base increased 12% YoY. However, mobile ARPU decreased 12.5% YoY relative to 2015. While net profit before royalty increased 0.1%, the net profits after royalty decreased 9.7%. Capex deployed went up 4.3% higher in the year compared to 2015. The areas of investment priority were IT, mobile rollout and digitisation of services.
According to TRA Market Statistics (November 2016), in terms of mobile subscribers in the UAE, du has a market share of 46.9%. In terms of revenue share, quarterly evaluation shows that du holds a revenue share of 30.4% while Etisalat has 69.6% share.
“While most of our key indicators showed improvement in 2016, a near 10% rise in the amount of royalty paid to the government meant net profit was lower compared with the previous year," said Osman Sultan, EITC’s chief executive officer. “In today’s fast-changing telecoms environment, we continue to look beyond traditional revenue streams, adapting our business model to explore ways of better leveraging our digital offering in order to create more value. We have continued to invest in our network, allowing us to capture more opportunities from our increasingly data-centric business."
Sultan further added that the introduction of Virgin Mobile UAE as a second telecommunications brand by EITC is in line with its vision to become a digital transformation partner and an ICT solutions provider, geared towards meeting the growing requirements of the fast-paced and dynamic country.
du expects to save AED 1 billion ($272.3 million) by 2019 as higher government taxes continue to weigh on its net profit, its chief executive said Thursday.
Full year analysis
Revenue: AED 12,727 million ($ 3465 million) (+ 3.2% YoY)
Fixed line revenue: AED 2,668 million ($ 726 million) (+4.4% YoY)
Mobile revenue: AED 8,968 million ($2441 million) (+0.3% YoY)
Net profit before royalty: AED 3,864 million ($ 1052 million) (+0.1% YoY)
Net profit after royalty: AED 1,753 million ($ 477 million) (-9.7% YoY)
Mobile subscribers : 8.646 (+12.0% YoY)