UAE telco du Q2 profit falls 8%, in line with estimates

Du, the United Arab Emirates’ No.2 telecoms operator, blamed higher taxes as it reported an 8 per cent fall in second-quarter net profit on Wednesday that was in line with analyst estimates.

The firm, which ended rival Etisalat’s domestic monopoly in 2007, made a net profit of Dhs 502m ($136.7m) in the three months to June 30, down from Dhs 547.7m in the year-earlier period.

Analysts polled by Reuters on average forecast du would make a quarterly profit of Dhs 500.6m.

Du has proposed a half-year dividend of Dhs 0.13 per share – up from Dhs 0.12 for the same period of 2014 – plus a special dividend of Dhs 0.1 per share, it said in a statement.

The company’s second-quarter revenue was Dhs 3.09bn, up from Dhs 3.02bn a year earlier.

Quarterly mobile revenue fell 1.4 per cent year-on-year to Dhs 2.23bn despite du’s mobile customer base expanding 2.7 per cent to Dhs 7.36m as of June 30.

Average revenue per user – a key industry metric – dropped to Dhs 92.6 from Dhs 96.8 a year earlier.

Data made up 31 per cent of mobile revenue in the quarter, up from 29.4 per cent a year earlier.

The company paid royalties – or tax – of Dhs 476.4m in the three months to end June, up from Dhs 401.2m in the prior-year period.

For 2014, du paid 10 per cent of its regulated revenue, which excludes the likes of handset sales, and 25 per cent of its regulated profit in royalties. These taxes have risen to 12.5 and 30 per cent, respectively, this year.