Etisalat, du announce first half results

Staff Reporter/ Gulf Today

Etisalat Group reported revenues of Dhs25.6 billion during the first half of this year, while its consolidated net profits after deducting the federal franchising totaled Dhs4.6 billion, recording an annual increase of 3 per cent, representing a net profit margin of 18 per cent.

The total value of interest, tax, depreciation and amortization amounted to Dhs13.2 billion, resulting in a margin of interest, tax, depreciation and amortisation of up to 52 per cent.

Obaid Humaid Al Tayer, Chairman of Etisalat Group, said: “During the first half of 2020, Etisalat managed to perform well, despite the urgent circumstances and challenges that the world was witnessing due to the current COVID-19 pandemic, which affected all industries and sectors, including telecommunications.”

Emirates Integrated Telecommunications Company (EITC), (du) published on Tuesday its financial results for the second quarter of 2020. EITC reported for the first half of the year (H1 2020) revenues of Dhs5.66 billion and a net income of Dhs570 million.

The Board of Directors approved the distribution to shareholders of an interim dividend of Dhs589 million, equivalent to an interim dividend per share of Dhs0.13. Due to the general lockdown of activity in the UAE during Q2 2020, EITC’s financial performance was negatively impacted from the limitation of sales activity, the change in customer behaviour and the strong reduction of tourism and trade activities. Mobile revenues were under pressure in Q2 of 2020 due to the movement restrictions across the country, which led to an erosion of the base as a result of lower gross additions and lagged churn and a shift in customer behaviour from prepaid mobile usage to fixed usage as companies implemented work from home initiatives.

Therefore, H1 mobile revenues declined to AED 2.81 billion, coming mainly from the significant reduction in the prepaid customer base and the prepaid usage. H1 2020 fixed revenues continued to grow at a rate of 4.8% year-on-year to Dhs1.29 billion.

EITC invested in Q2 2020 Dhs509 million, equivalent to 19.1% of revenues. In addition to investments in capacity upgrades and network maintenance, Capex were also allocated to 5G network rollout and the implementation of digital transformation initiatives, in line with the company’s plans to drive long-term value creation. H1 2020 EBITDA was down to Dhs2.32 billion, impacted by the decline in mobile revenues, the increase in spending to optimise customer offering during the second quarter, and the inelasticity of certain costs to revenue decline. Consequently, net income declined in H1 2020 to Dhs570 million.

Fixed customer base continued to increase at a healthy pace, reaching at the end of in Q2 2020 226 thousand subscribers, up by 6.8% from Q2 2019. Commenting on the results, Mohamed Hadi Al Hussaini, Chairman, EITC, said: “Despite a challenging environment that adversely impacted our results for the quarter we continued our transformation programme, particularly on the digital front, and we remain committed to continue investing in our business to sustain long-term value creation. Our capex spend for the half year period was up by 75.3% to Dhs819 million, equivalent to 14.5% of our half year revenues.”