Du Q1 Profit Up 40.5%

Du, the United Arab Emirates’ number two telecom operator, posted on Thursday a 40.5 per cent rise in first-quarter profit, beating analysts’ estimates as lower taxes, reduced operating costs and a rising customer base added to the bottom line.

The firm, which ended rival Etisalat’s domestic monopoly in 2007, made a net profit of Dhs467.9 million ($127.38 million) in the three months to March 31, up from Dhs333.13 million in the year-earlier period, it said in a statement.

Analysts polled by Reuters on average forecast du would make a quarterly profit of Dhs454.2 million.

In December, the UAE announced changes to the royalty fees – or tax – levied on du’s earnings.

Previously, the company provisioned to pay half its profit in royalties, but in the first quarter this fell to 37.7 per cent, according to Reuters calculations.

First-quarter revenue was Dhs2.63 billion. This compares to Dhs2.45 billion a year ago.

Total quarterly overheads were Dhs698 million, or 26.6 per cent of revenue. In the same period of last year, overheads represented 32.4 per cent of revenue.

“Efficiency and cost control will remain a strategic driver throughout 2013 and beyond,” Chief Executive Osman Sultan said in the statement.

First-quarter mobile data revenue rose 32.8 per cent to 520 million.

“Growth in mobile data revenues reflects the ongoing shift in network traffic from voice to data, a trend we expect to continue,” Sultan added.

The company had 6.64 million mobile subscribers as of March 31, up 19.9 per cent from a year earlier, giving it a 48.1 per cent share of the UAE’s mobile subscribers.

The company’s shares have gained 46.4 per cent in 2013, outperforming Dubai’s index which is up 31.7 per cent over the same period.