Etisalat announces strong results for Q1 2014
Etisalat Group announced its consolidated financial statements for the three months ending 31st March 2014.
Q1 Financial Highlights:
• Aggregate subscriber base reached 145 million representing net addition of 4.5 million subscribers during the last 12 months.
• In the UAE, mobile subscriber base grew by 20% year over year.
• Consolidated revenues amounted to AED 9.9 billion and increased year over year by 3%.
• Consolidated EBITDA totalled AED 4.9 billion, resulting in EBITDA margin of 50%.
• Consolidated net profit after Federal Royalty amounted to AED 2.0 billion and increased year over year by 11%.
• Etisalat’s shareholders approved Board of Directors’ recommendation on the distribution of dividends in the amount of 70 fils per share for the fiscal year 2013 which was paid in August 2013 and April 2014.
• Consolidated capital spending declined by 14% to AED 0.9 billion.
• Maintained financial flexibility with consolidated net cash balance of AED 13.3 billion.
Q1 Key Developments:
• First LTE (Long-Term Evolution) Advanced technology (LTE-A) tested and deployed in the region, using 1800 MHz and 800 MHz bands.
• Provided UAE customers with the opportunity to trade-in and upgrade their 2G handsets to enjoy the first UAE smartphone with the latest mobile technologies.
• A key contributor to the UAE’s efforts to transform into a smart government.
• Launched mobile banking smartphone application in Nigeria, enabling customers to access their money faster and more conveniently.
• Etisalat Group signed a Network Infrastructure Sharing Initiative with seven of the largest mobile network groups operating in the Middle East and Africa.
Ahmad Abdulkarim Julfar, Group Chief Executive Officer, Etisalat, commented: “We achieved strong financial results in the first quarter of 2014, building on our strong performance in 2013. Our focus on innovative products and services that change the way people live their lives further supported customer retention while at the same time attracting new subscribers to our brand.”
In the first quarter of 2014, Etisalat successfully deployed LTE (Long-Term Evolution) Advanced technology (LTE-A); a standard for high-speed mobile data communication, for the first time in the region on 1800 MHz and 800 MHz bands. Julfar said: “The strong momentum built up by our data business in 2013 continued in the first quarter of 2014, and this segment will remain a strategic priority for the company. The successful LTE-A deployment is significant as it provides significant new opportunities in commercialising the data segment.”
He elaborated: “Being able to help millions of customers to navigate the digital eco-system requires Etisalat to continually invest and innovate to keep pace with the growing demand for mobile data within our networks. This growth also contributes to our efforts in strengthening mobile banking solutions in the markets where Etisalat operates.
Julfar continued, “We will continue to expand our service offering and geographic footprint in order to diversify our revenue base and cement our regional leadership position. Africa remains a strategic region for our business and we will continue to invest and build even closer relationships with the communities in which we operate in the continent.”
He added: “We are also proud to have made a significant contribution to the UAE’s m-government strategy this quarter with the launch of our 2G trade-in initiative. Etisalat Group believes in supporting initiatives that are of benefit to local communities and this initiative will make smartphone technology available and affordable for many more people in the UAE.”
Etisalat Group aggregate subscriber base grew to 145 million by end of March 2014 representing year over year growth of 3%.
In the UAE, the active subscriber base grew to 10.9 million subscribers in March 2014 representing year over year growth of 16%. Etisalat UAE strengthened its competitive position in Q1 2014 by reinforcing its leadership in high-value segments in both the mobile and fixed segments. As a result, in the UAE, the mobile subscriber base grew by 20% to reach 8.9m subscribers. Fixed line subscribers including eLife and broadband segments increased to 2 million representing a year on year growth of 2%.
Etisalat Group’s consolidated revenue in the first quarter of 2014 amounted to AED 9.9 billion with growth accelerating to 3% in comparison to the same period last year.
In the UAE, revenues of AED 6.5 billion for the first quarter of 2014 were 8% higher than the first quarter of 2013. This growth was mainly as a result of increased demand for eLife services, handset sales and mobile data.
Revenue from international consolidated operations reached to AED 3.3 billion, representing 34% of consolidated revenues.
In December 2012, a new royalty mechanism for the telecom operators was established by the Federal Government in the UAE. As per the new royalty mechanism, Etisalat is required to pay 15% royalty fee on the UAE regulated revenues and 35% of net profit after deduction of 15% royalty fee on the UAE regulated revenues. 35% royalty fee on profits from international operations is netted off with the corporate taxes paid/payable in the respective foreign countries.
Federal Royalty for the first quarter of 2014 amounted to AED 1.9 billion, representing a year-over-year increase of 4%. This resulted in an effective royalty rate of 48% on net profit before Federal Royalty in comparison to 50% in the same quarter prior year.
Net Profit and EPS:
Consolidated net profit after Federal Royalty increased year-over-year by 11% to AED 2 billion in the first quarter of 2014.
Earnings per share (EPS) amounted to 26 fils in the first quarter of 2014, an increase of 11% from the same period last year.
For more information:
Etisalat Media Desk