du announces second quarter 2012 results of Dh651 million in net profit before royalty

posted on 31/07/2012: 509 views

Emirates Integrated Telecommunications Company PJSC ("du") yesterday announced its financial results for the second quarter of 2012.

Osman Sultan, du's Chief Executive Officer, said, "The second quarter remained strong for du, with continued healthy customer additions, particularly in the high-value post-paid segment, which now represents nearly eight per cent of our mobile customer base. There are clear signs that the Company is entering the next phase of its evolution. Delivering value for our Shareholders remains our priority and we will consistently seek to do this through a continued emphasis on driving efficiencies, and a sustained focus on innovation and the introduction of new customer-centric products and services.

Our on-going efficiency programme continues to gather pace as evidenced by new initiatives that are driving further efficiency improvements, such as the recent announcement of an outsourcing agreement signed with Huawei for the management of our converged network. This falls within a programme designed to outsource activities to achieve efficiencies. The benefits of this will be seen in future financial performance." Q2 2012 results analysis Total combined revenues for Q2 12 reached Dh 2.5 billion, representing an increase of 12.9% year on year (up from Dh 2.2 billion) and 0.2% quarter on quarter (from Dh 2.4 billion).

Continued strengthening of mobile business Mobile revenues grew by a further 14.0% year on year, reaching Dh 1.9 billion, compared to Q2 11 (Dh 1.7 billion), and decreased 1.3% versus Q1 12 (Dh 1.9 billion) due to exceptional performance in the previous quarter.

Drivers of performance in this segment continue to include growth in the Company's customer base, strong minutes of use, especially from the post-paid segment, and data usage.

At the end of July, du's share of the UAE mobile market stood at 46.5%, based on the data published by the Telecommunications Regulatory Authority (TRA) and competitor disclosures.

196,300 mobile customers were added in the second quarter of 2012. This further reaffirms du's position as being the provider of choice for the majority of new mobile customers in the UAE.

du now serves a total of approximately 5,732,900 active mobile customers.

The high-value post-paid mobile customer base continues to increase in importance.

Approximately 18.5% or 36,300 of the additions in the second quarter were high-value post-paid customers. This is testament to the Company's continued efforts to attract and retain high-end mobile users. 449,500 high-value post-paid customers now represent 7.8% of the mobile customer base (up from 6.8% in Q2 2011).

Mobile average revenue per user (ARPU) stood at Dh 112 for the second quarter.

Data revenue growth year on year Mobile data usage remains an important component of du's mobile revenues, growing 84.8% year on year from Dh 151 million in Q2 11 to Dh 278 million in Q2 12. Quarter on quarter growth was impacted by Q1 mobile data revenue being boosted by Dh 29 million from a promotion that began at the end of December.

Revenues for du's fixed business, including fixed telephony, TV and Broadband, amounted to Dh 410 million, a 11.4% year on year increase (Q2 11: Dh 368 million) .

Decrease in overheads as percentage of revenue Total overheads stood at Dh 733 million, representing 29.9% as a percentage of revenue and a decrease of nearly five percentage points (as a percentage of revenue) over the same period a year ago (35.2% in Q2 11). This reflects the Company's focus on profitability and its efforts to improve operating efficiencies through internal optimisation programmes.

During the second quarter, EBITDA grew by 36.6% year on year, and increased 1.8% quarter on quarter to Dh 941 million compared to Dh 689 million and Dh 925 million respectively. EBITDA margins also improved to 38.4% in Q2 12, up by more than six percentage points from 31.7% in Q2 11, and up compared to the previous quarter (37.8%).

Net profit before royalty for Q2 12 was Dh 651 million representing an increase of 57.1% over the Dh 414 million reported for Q2 11, and a 2.3% decrease quarter on quarter (from Dh 666 million in Q1 12).

Quarter on quarter change in net profit before royalty in Q2 2012 was impacted by exceptional one-off gains of approximately Dh 30 million from favourable settlements in Q1 2012.

Provisioning for royalty continues to be made at 50%.

The Company's capital expenditure programme remains focused, with Dh 444 million accounted for during Q2 12.

Q2 spend was focused on the mobile business. – Emirates News Agency, WAM

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