Etisalat 2013 net profit up 5%; Maroc Telecom deal expected to close by end-May

5 Mar 2014

Emirates Telecommunications Corporation (Etisalat) has announced consolidated revenue of AED38.853 billion (USD10.6 billion) for the twelve months ended 31 December 2013, an increase of 18% from AED32.946 billion a year earlier. Growth was driven by a 9% year-on-year rise in domestic turnover to AED24.8 billion, resulting from subscriber growth, increased demand for data services and higher handset sales. Revenue from overseas operations rose 47% year-on-year to AED13.8 billion and totalled AED3.4 billion in 4Q13, up by 43%. Egyptian unit Etisalat Misr generated turnover of AED4.7 billion in 2013, a decrease of 7% from the prior-year, impacted by currency devaluation, although Q4 2013 turnover rose 2% to AED1.3 billion. The Africa cluster saw revenue growth of less than 1% to AED2.8 billion, with performance mainly impacted by competitive pressure in Cote d’Ivoire and currency devaluation in Sudan, while Asia Cluster revenue increased three-fold to AED6.3 billion, boosted by the inclusion of Etisalat’s business in Pakistan (PTCL) with effect from 1 January 2013. Etisalat, which is 60% owned by the UAE government, said that EBITDA climbed 12% from AED16.855 billion in 2012 to AED18.901 billion the following year, mainly due to revenue growth. Despite higher depreciation and amortisation charges, taxes and lower finance income, Etisalat said consolidated net profit after royalty rose 5% to AED7.078 billion in 2013 from AED6.742 billion a year earlier, due to higher share of results of associates, lower impairment charges and lower federal royalty (AED6.1 billion in 2013, compared to AED6.5 billion the previous year).

At the end of December 2013 Etisalat reported an aggregate subscriber base of 148 million, an increase of 7% from 139 million a year earlier. Domestic mobile customers grew 19% year-on-year to 8.4 million, driven by attractive promotional campaigns and new products and services, while UAE fixed line subscribers fell 5% to 1.0 million, mainly due to the migration of customers to Etisalat’s eLife multi-play packages, which saw growth of 30% for the year to 700,000. The company said that the customer base of its African cluster rose 7% to 28.9 million, although the Asia segment reported a 1% drop in subscribers to 36.3 million at end-2013. Totalling AED6.3 billion in 2013 (up by 52% year-on-year), consolidated capital expenditure was focused on network expansion, network capacity and the acquisition of a universal mobile licence in Benin; in the UAE the figure was AED2.0 billion (an increase of 12%).

In November 2013 Etisalat signed a share purchase agreement with French media conglomerate Vivendi for its 53% stake in Maroc Telecom. Under the deal, Etisalat will pay EUR3.9 billion (USD5.3 billion) for the shares, in addition to EUR300 million in Maroc Telecom’s dividends for 2012; closing of the transaction is expected before the end of May 2014.

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