Etisalat posts profit of Dh1.9 billion in turnaround

posted on 25/07/2012: 558 views

Etisalat has reported a turnaround in its financial performance, having posted a net profit of Dh1.9 billion in the second quarter after months of decline.

The Abu Dhabi-listed company today said its net profit had risen by 17 per cent, with revenues up 4 per cent to reach Dh8.25 billion in the second quarter of this year.

That followed several periods of declining profits, during which Etisalat was hit by both increased competition in its domestic market and setbacks in its international expansion.

Growth of Etisalat's international operations proved a major boost, the company said. Its business outside the UAE now accounts for 28 per cent of its top line, with revenues having grown 14 per cent to hit Dh2.3 billion.

Etisalat chairman Eissa Mohammad Al Suwaidi said the growth in profits was "on the back of strong market development in Egypt, Benin, Gabon, Togo, Afghanistan and Sri Lanka”.

Problems in Etisalat's international expansion had included last year's aborted US$12 billion (Dh44.07bn) bid for a controlling stake in the regional operator Zain Group.

And Etisalat's joint venture in India was among several operators to have their mobile licenses revoked earlier this year, in what was one of the country's largest corporate scandals.

The operator chose to exit the Indian market, having sustained a Dh3.04 billion impairment charge over its operation there.

Etisalat was not implicated in any wrongdoing in the scandal over the allocation of 2G licenses in India, which occurred before it entered the market.

In its home market of the UAE, Etisalat has come under increasing pressure as rival operator du has rapidly gained market share in the mobile business. – The National

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