Emirates Integrated Telecommunications Company PJSC (EITC), UAE’s second licensed telecommunications operator, has seen its first-quarter net profit jump 21% to AED311 million ($85 million).
Revenues grew by 8.5% to AED3.1 billion on sustained demand for broadband and mobile services. EBITDA grew by 13.3% to AED1.3 billion on higher service revenues. Operating Free Cash Flow (EBITDA – Capex) grew 75% to AED964 million thanks to higher EBITDA and Capex spend which is beginning to normalise.
EITC’s focused commercial initiatives drove a 10.4% growth in mobile customers. It ended the quarter with 7.5 million subscribers on healthy net-additions across the postpaid and prepaid segments. The firm delivered a third consecutive quarter of net-additions on the postpaid segment which grew to 1.4 million customers.
Its prepaid customer base increased to 6.1 million thanks to targeted offers, brisk tourism activity and continued improvement in the economic environment.
The company’s consumer broadband offering remains extremely attractive. It attracted 48,000 new customers (Q1’21: 13,000) and ended the quarter with 439,000 broadband customers. This represents a 76.7% increase year-over-year. Again, its commercial initiatives across various product categories and the disciplined execution of its broadband strategy helped drive another quarter of solid performance.
Revenues grew 8.5% to AED3,128 million. Mobile service revenues continued their recovery: revenues increased 6.9% to AED1,402 million while handset sales generated AED216 million in revenues.
Fixed services revenues jumped 22.8% to AED815 million on sustained demand from consumer and enterprise customers. In aggregate, service revenues increased 12.2% to AED2,217 million.
EBITDA increased by 13.3% year-over-year to AED1,269 million. This improvement was mainly driven by higher service revenues. Given mobile and fixed services’ higher profitability, EBITDA margins expanded by 170bp to 40.6%.
The impact of higher EBITDA was partially offset by increased depreciation charges triggered by its infrastructure investment.
Capex spend moderated to AED305 million on a capital intensity of 9.7%. This reflects the usual seasonality as most of the Capex spend is skewed towards the second half of the year. More importantly, its capex profile is beginning to normalise following two consecutive years of high capital intensity.
Operating free cash flow (EBITDA – Capex) increased by 75% to AED964 million. This is the combined result of an improving EBITDA and lower capex.
Fahad Al Hassawi, EITC CEO said: “Our Q1’22 results confirm our recovery trajectory is on a sustainable path. The Covid-19 impact is phasing out. We continued to experience increased mobility and a general improvement in the economic environment. We also continued our efforts to deploy our innovative portfolio of products and services and to implement the transformation of the Company.
“Our considerable infrastructure investment allows us to continue innovating and improve customer experience. More importantly, it sets the foundations for continued strong performance.
“Furthermore, this quarter’s performance validates our strategy. My team is focused on growth. We are committed to re-invigorating our core mobile and fixed operations while pursuing modernisation of our infrastructure. We will continue to work to maintain this positive commercial momentum throughout 2022.”
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