‘Milestone year’ for Etisalat as profit leaps

Etisalat shareholders are set to reap a bumper dividend payout after fourth quarter profit surged by almost half.

The telecoms company, active in 19 markets across the Middle East, Africa and Asia, on Thursday announced its annual profit jumped 26 per cent to Dh8.9 billion.

For the final quarter alone the profit was Dh2.1bn, up 47 per cent from a year earlier.

Etisalat proposed a final dividend payout of 70 fils per share for 2014, or Dh5.54 billion, in line with dividend payments for 2012 and 2013, representing a dividend payout ratio of 62 per cent and a dividend yield of 6 per cent. The board has also proposed the issuance of a 10 per cent share bonus.

Etisalat’s shares, listed on the Abu Dhabi Securities Exchange, ended the day up 3.88 per cent at Dh12.05, their highest since last March. Etisalat’s results were “a pleasant surprise overall”, according to Sanyalaksna Manibhandu, manager of research at NBAD Securities.

The operator’s group revenues surged 26.5 per cent year-on-year to Dh48.8bn, following the acquisition of Maroc Telecom last year.

The Moroccan operator accounted for more than half of the increase in group revenues. UAE revenues, meanwhile, increased 8.9 per cent year-on-year to Dh27.8bn.

“Maroc Telecom said earlier this week that it had returned to revenue growth in Morocco in the second half of 2014,” said Matthew Reed, a Dubai-based analyst with Ovum.

“Growth in fixed-line and internet revenues led the improvement within Morocco, but competition in the local mobile market remains quite tough.”

Etisalat added 21 million subscribers during the year, most of which also came from Maroc Telecom, taking its aggregate subscriber base to 169 million at the end of December.

The operator’s active subscriber base in the UAE grew to 11 million at the end of 2014, a year-on-year increase of 6 per cent.

Ahmad Julfar, the group’s chief executive, described 2014 as a “milestone year”.

“Our expansion in Africa, which increased our international presence to 19 markets across the Mena region, was accompanied by strong figures in our international operations [and] the continuance of steady growth for our operations in the UAE,” he said.

Mr Julfar highlighted “the rapid growth of data usage” as the key to the future of the telecoms industry. “New, transformative platforms such as M2M and mobile identities, as well as the digitisation of traditional forms of information transfer are taking the industry to exciting new levels,” he said.

The results came in ahead of analyst predictions, with only revenues for the fourth quarter falling short of a median of analyst predictions by Bloomberg.

Etisalat said that it had absorbed a Dh200 million impact from the restatement of earnings by the Saudi operator Etihad Etisalat, in which the UAE company owns a 27.46 per cent stake, but described the effect as “immaterial”.

Mobily announced a full year loss of 913m Saudi riyals (Dh894.1m) on Wednesday, and revealed that it was in breach of loan covenants with a number of lenders. The operator had earlier announced that its chief executive Khalid Al Kaf had been discharged from his duties, following a series of accounting errors that have wiped around US$9bn off its market value in the past four months.


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