Du Second-Quarter Profit Climbs 57% as Revenue Increases

Du (DU), one of the two phone operators in the United Arab Emirates, posted a 57 percent increase in second-quarter profit as mobile-phone and data users rose.

Net income after a 50 percent royalty payment to the government climbed to 325.5 million dirhams ($89 million) from 207.2 million dirhams a year earlier, the company also known as Emirates Integrated Telecommunications Co. said in a statement to the Dubai stock market today. The median estimate of three analysts was for a profit of 337 million dirhams, according to data compiled by Bloomberg. Revenue increased 13 percent to 2.45 billion dirhams from 2.17 billion dirhams.

“We expect the level of revenue growth to continue in 2012,” Chief Executive Officer Osman Sultan said in a conference call, adding that the increase in mobile subscribers was driving growth at the company.

Du competes in the U.A.E. with Emirates Telecommunications Corp. (ETISALAT), known as Etisalat, which posted a 17 percent increase in second-quarter profit. At the end of the second quarter, Du’s share of the U.A.E. mobile-phone market was 46.5 percent, according to the statement. Mobile-phone revenue rose 14 percent to 1.9 billion dirhams as the company added 196,300 active subscribers, raising its customer base to 5.7 million.

Fixed-line clients grew 10.6 percent to 546,600 at the end of the second-quarter.

The company has made “no progress” on network sharing agreements and number portability with Etisalat, Sultan said. The carrier may also also still expand to Saudi Arabia as a mobile virtual network operator, he added.

Sultan said there are no plans to allow international investors to own its shares following a decision to do so by state-controlled Etisalat. There is “nothing on the table at this time”, he said. The company should have a “sustainable dividend policy”, Sultan said, after paying its first dividend last year.

Du shares rose 1.26 percent at 11:09 a.m. in Dubai. The stock has gained 11.4 percent this year compared with a 2.19 percent increase for Etisalat.

To contact the reporter on this story: Tamara Walid in Dubai at twalid@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.