Du cuts dividend after royalty increases

Du reduced its dividend payout to investors as royalty fees to the government rose sharply.

The telecoms company said yesterday that it approved the payout of 20 fils per share for the second half of last year, bringing last year’s total dividend payout to 32 fils.

The company’s dividend was at 41 fils in 2013, which included a 10 fils special dividend.

“All shareholders that are registered in the company sharebook as of March 29 will be entitled to receive the dividend,” the company said yesterday.

Analysts said that from now on there would be a “limited increase” to du’s dividend payout, given the recent spike in royalty fees.

Du’s net profit last year after royalties increased about 6 per cent to Dh2.1 billion compared to 2013, despite royalty fees escalating 55 per cent year-on-year. The company’s fourth quarter net profit after royalties fell 10 per cent year-on-year.

“Du is on par with Etisalat in terms of dividend payout,” said Nishit Lakhotia, the head of research at Sico investment bank in Bahrain.

“Ooredoo in Qatar announced a high dividend this year, but usually it doesn’t pay a lot of dividend. Zain pays the highest dividends across the sector at 80 per cent,” Mr Lakhotia added.

Du also announced yesterday the appointment and election of new board members in its annual general meeting. The company said that PricewaterhouseCoopers would be its auditor this year.


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