Etisalat’s Q1 Profit Flat As Margins Weaken

Etisalat, the Gulf’s biggest telecoms operator, reported a near-flat first-quarter profit, missing analysts’ estimates as margins weakened.

The former monopoly, which operates in 15 countries across the Middle East, Africa and Asia, made a net profit of Dhs1.83 billion in the three months to March 31, compared with a profit of Dhs1.81 billion a year earlier, it said in a statement on Tuesday.

Analysts polled by Reuters on average forecast quarterly profit of Dhs2 billion.

First-quarter revenue was Dhs9.6 billion, with revenue from affiliate Pakistan Telecommunication Co Ltd (PTCL) included for the first time. This compares with Dhs8.2 billion a year ago when PTCL was excluded.

“We have seen significant improvement in UAE revenues and operating profits,” Etisalat chief executive Ahmad Julfar said.

Etisalat did not give a breakdown of its revenue or profit by country.

PTCL boosted Etisalat’s subscriber numbers, which rose to 141 million as of March 31 from 122 million a year earlier. Etisalat said the number of subscribers in Asia was 36.6 million at end-March, up by 29 million due to the consolidation of Pakistan.

Etisalat, which also has operations in Sri Lanka and Afghanistan in Asia, did not state how many of the subscribers were from Pakistan.

The UAE firm reported declining profits in eight of the previous 12 quarters, with its bottom line greatly influenced by foreign assets even though its domestic market provided the majority of revenue.

In the fourth-quarter of 2012, Etisalat wrote off $769 million from its Pakistan and Sudan units, while a year earlier it took $827 million in impairments relating to its failed Indian joint venture.

The company has lined up an $8 billion loan facility to finance its bid to acquire Vivendi’s stake in Maroc Telecom, bankers working on the deal said this month.