Saturday, May 12, 2012

(This story was originally published Thursday.)

--1Q Net profit before royalty fees at AED666 million versus AED412 million year earlier

--Operator adds 320,600 mobile subscribers in 1Q, total now 5.5 million

--Intends to grow postpaid subscriber base, currently at 7.5% of total, to over 10% by 2013, CEO says

--Mobile data revenues more than double in 1Q to AED297 million

--Capex expected to be around AED1.5 billion in 2012

--Already sharing some of its mobile towers with Etisalat

By Shereen El Gazzar

Of ZAWYA DOW JONES

(Adds CEO comments, details throughout.)

DUBAI (Zawya Dow Jones)--Dubai-based Emirates Integrated Telecommunications Co. (DU.DFM), or Du, said Thursday its first-quarter net profit rose 62% on year, beating most analyst expectations, as it added subscribers and mobile data revenues more than doubled.

The U.A.E.'s second-biggest telco, in an emailed statement, said net profit before royalty fees amounted to 666 million U.A.E. dirhams ($181.5 million) in the first three months of the year, up from AED412 million in the year before period.

The first-quarter result exceeded the AED497 million effort that analysts at Cairo-based EFG Hermes penciled in, while Bahrain-based SICO had predicted it at AED518 million.

Du's royalty fees to the U.A.E. Federal Government for 2011 was 15% of net profit and 5% of total company revenues, compared with only a royalty payment of 15% of net profit in 2010.

Revenues during the first quarter jumped 20.1% on year to AED2.4 billion, while mobile average revenue per user, or ARPU, rose to AED119, from AED118 in the first quarter 2011.

"The drivers behind Du's strong top-line performance continued to be the growth in the high-end postpaid segment of subscribers and the boost in data usage, whose contribution to mobile revenues has been consistently on the rise," analysts at Cairo-based investment bank Beltone Financial said.

The operator added 320,600 subscribers during the first three months of 2012, including 50,400 postpaid mobile customers, taking the total number of mobile subscribers to 5.5 million.

Postpaid subscribers, which are generally considered more lucrative for telecom operators, now represent 7.5% of Du's mobile customer base.

Osman Sultan, the firm's chief executive officer, said in a results conference call that Du intends to grow its postpaid base to over 10% by 2013.

At the end of March, Du had a 46.7% share of the domestic market, where it competes with Abu Dhabi-bases Emirates Telecommunications Corp. (ETISALAT.AD).

In terms of mobile data, revenues more than doubled to AED297 million in the first quarter of 2012 from AED141 million in the first quarter of 2011, representing approximately 15.5% of total mobile revenues, the company said.

"Our mobile data revenues in particular more than doubled year on year. We believe this will continue to grow in importance as a revenue stream, and we will seek to continue developing innovative products and services that encourage data usage," Sultan said in the earnings statement.

Sultan also said in the results call that Du's capital expenditure is expected to be around AED1.5 billion in 2012, to be spent on infrastructure, while noting that the telco is already sharing some of its mobile towers with Etisalat in the U.A.E.

Du shares closed up 1.6% at AED3.13 Thursday in a broadly negative overall market.

-By Shereen El Gazzar, Dow Jones Newswires; +971 444 61684; Shereen.elgazzar@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

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12-05-12 0716GMT