Etisalat eyes prospects to drive growth, earnings: CEO

ZAWYA DOW JONES

DUBAI

ABU Dhabi-based Emirates Telecommunications Corp, or Etisalat, is looking at opportunities to expand its footprint in high growth markets, and expects profits to grow as it continues to create more value at its existing operations, the telco’s top executive said on Wednesday.

“Following the global crisis there are good opportunities in the market. In the next 18 months we will be eyeing the opportunities and jumping on the good ones. If it brings good value, we’ll look into that,” Ahmad Julfar, the group’s chief executive officer, told Zawya Dow Jones.

“We operate in 15 markets that are growing fast. There is a huge growth potential in those markets,” he added.

Etisalat said on Tuesday its net profit in the third quarter rose 28 percent on year, helped by gains from an asset sale and as revenue from its international operations grew.

Net profit after federal royalty increased by 28 percent to 2.2 billion UAE dirhams ($599 million), boosted by Etisalat’s sale of 775 million shares of its investment in Indonesia’s XL Axiata.

“Even without our asset sale in the third quarter, our net profits were up 6 percent.

We are confident that we will see growth in our net profits in the coming period,” Julfar said.

And that growth is likely to come on the back of its exposure to markets such as Saudi Arabia and Nigeria, which are growing in double digits, he added.

Moreover, the telco’s chief noted, there is a huge growth potential in the value chain— in services like 3G and LTE.

Etisalat, which is facing strong competition in its home market from rival Du, has looked to its international operations to boost revenues.

In the third-quarter, while consolidated revenues remained flat at AED8 billion, Etisalat said revenue from its international operations rose 7 percent to AED2.4 billion—contributing 30 percent to the top line.

But analysts at EFG Hermes say a recovery in the performance of Etisalat’s UAE operation—the largest contributor to valuation, revenue, and earnings before interest, taxes, depreciation and amortisation—is key to improvement in the company’s fundamentals.

The analysts noted that the growth coming from international operations is not yet enough to mitigate the decline in contribution from the UAE unit.

Etisalat, in its third-quarter earnings statement, said the group’s aggregate subscriber number grew 20 percent on year to 130 million by end of September. In the UAE its active subscriber base was up 8 percent at 9 million.

Etisalat shares last traded 0.3 percent higher at AED9.73 on Wednesday.

Related Posts

Post a Comment

Subscribe Our Newsletter