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28115
Mon, 11/03/2008 - 14:25
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https://oananews.org//node/28115
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du telecom turns profitable, shares rise
Abu Dhabi, Nov 3, 2008 (WAM) Dubai telecom firm du posted its first ever profit in the third quarter, a year ahead of schedule, thanks to subscription growth and a one-time gain, sending its shares up as much as 6 percent on Sunday according to a report in “Khaleej Times.”
Telecom firms in the world's top oil-exporting region have been expanding their operations at home and abroad as the economy grows and the population expands.
Du posted net income of 31.47 million dirhams (US$8.57 million) in the three months ended Sept. 30, compared with a loss of 241.94 million dirhams a year ago, it said in a statement.
The company booked a 16.5-million dirham gain in the third quarter, from compensation for vacating an operation site.
By 0845 GMT, du's shares were up 2.42 percent, scaling back gains after rising 6 percent early on.
Du, which started operations in February 2007, more than doubled revenue to 1.06 billion dirhams in the quarter.
The telecoms firm more than tripled its mobile telephone subscriptions to 2.67 million, compared with 883,000 a year ago, Chief Executive Osman Sultan said.
'The profit was due to an increase in subscriber numbers and cost-efficiency,' Sultan told Reuters. Fixed-line subscriptions grew by 30,000 to 248,000 in the same period.
Prime Group had forecast that du would report a net loss of 44.0 million dirhams in the third quarter.
Cairo-based investment bank EFG-Hermes expected du to break even on the earnings level by the end of this year or the beginning of next year, Marise Ananian, the bank's telecom analyst said.
'This was because ARPU (average revenue per user) came about 10 percent stronger than we had expected...and because of a one-off 16.5 million dirhams gain in compensation for vacating an operational site,' Ananian said.
Ananian said du's estimated ARPU for the quarter was around US$36.3, while EFG-Hermes had forecast it would be US$32.9.
Du plans to invest more than 2 billion dirhams in infrastructure in 2009 as it seeks to capture a market share bigger than the current 30 percent, Osman said.
'They could definitely increase their subscription numbers because the UAE mobile market is still growing as we are expecting the UAE population to grow driven by expatriate growth and people are buying two and three mobile lines,' EFG-Hermes' Ananian said.
Profit at Du's rival Emirates Telecommunication Corp ETEL.AD (etisalat) grew 19 percent to 2.1 billion dirhams in the third quarter.
But unlike Etisalat, which is snapping up assets in Asia and Africa worth billions of dollars, du has not hinted it was looking at opportunities outside the UAE, where mobile phone penetration exceeds 150 percent among its 4.5 million people.
The company's shares have lost 44.13 percent this year to last week's close, underperforming rival Etisalat, which is down 16.67 percent.
Telecom firms in the world's top oil-exporting region have been expanding their operations at home and abroad as the economy grows and the population expands.
Du posted net income of 31.47 million dirhams (US$8.57 million) in the three months ended Sept. 30, compared with a loss of 241.94 million dirhams a year ago, it said in a statement.
The company booked a 16.5-million dirham gain in the third quarter, from compensation for vacating an operation site.
By 0845 GMT, du's shares were up 2.42 percent, scaling back gains after rising 6 percent early on.
Du, which started operations in February 2007, more than doubled revenue to 1.06 billion dirhams in the quarter.
The telecoms firm more than tripled its mobile telephone subscriptions to 2.67 million, compared with 883,000 a year ago, Chief Executive Osman Sultan said.
'The profit was due to an increase in subscriber numbers and cost-efficiency,' Sultan told Reuters. Fixed-line subscriptions grew by 30,000 to 248,000 in the same period.
Prime Group had forecast that du would report a net loss of 44.0 million dirhams in the third quarter.
Cairo-based investment bank EFG-Hermes expected du to break even on the earnings level by the end of this year or the beginning of next year, Marise Ananian, the bank's telecom analyst said.
'This was because ARPU (average revenue per user) came about 10 percent stronger than we had expected...and because of a one-off 16.5 million dirhams gain in compensation for vacating an operational site,' Ananian said.
Ananian said du's estimated ARPU for the quarter was around US$36.3, while EFG-Hermes had forecast it would be US$32.9.
Du plans to invest more than 2 billion dirhams in infrastructure in 2009 as it seeks to capture a market share bigger than the current 30 percent, Osman said.
'They could definitely increase their subscription numbers because the UAE mobile market is still growing as we are expecting the UAE population to grow driven by expatriate growth and people are buying two and three mobile lines,' EFG-Hermes' Ananian said.
Profit at Du's rival Emirates Telecommunication Corp ETEL.AD (etisalat) grew 19 percent to 2.1 billion dirhams in the third quarter.
But unlike Etisalat, which is snapping up assets in Asia and Africa worth billions of dollars, du has not hinted it was looking at opportunities outside the UAE, where mobile phone penetration exceeds 150 percent among its 4.5 million people.
The company's shares have lost 44.13 percent this year to last week's close, underperforming rival Etisalat, which is down 16.67 percent.
