Etisalat profit rockets 58%

Largest Arab telecom firm sees Q2 net income jump to $817m, at top end of forecasts

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By  Ola Galal Published  July 13, 2008

Etisalat posted a 58% jump in second-quarter profit on Monday, boosted by the sale of a stake in its Saudi affiliate.

Etisalat, the largest Arab telecom firm by market value, said profit attributable to shareholders rose to 3 billion dirhams ($817 million) in the three months to 30th June from 1.89 billion dirhams a year earlier.

That beat two of three forecasts from analysts polled by Reuters last month, which ranged from 2.03 billion dirhams to 3.09 billion dirhams.

The company sold part of its stake in Etihad Etisalat (Mobily) in April, reducing its shareholding in Saudi Arabia's second mobile phone operator to 26.25% from 35%.

"The sale of a stake in Mobily has generated an exceptional profit in the second quarter," Etisalat Chairman Mohammed Omran told Reuters.

Profit from the Mobily stake sale was 1.78 billion dirhams, Etisalat said.

Earnings per share rose to 0.50 dirham from 0.32 dirham a year earlier, Etisalat said, adding it made more money from new and current subscribers.

Etisalat had 6.83 million mobile phone customers the end of June, up 7% from 31st December, Etisalat said.

Etisalat added 200,000 new subscribers in the quarter, according to a Reuters calculation.

The state-controlled firm lost a mobile phone monopoly at home last year when rival du started operations.

Its revenue rose 21.5% to 6.38 billion dirhams in the second quarter, Etisalat said.

Etisalat, which has been expanding abroad as it faces new competition at home, said total profit excluding minority interests was 2.84 billion dirhams compared with 1.73 billion dirhams a year earlier.

In addition to its Saudi operation, Etisalat owns a majority stake in Egypt's third mobile phone company and has stakes in operators in countries including Pakistan and Indonesia.

The company's shares rose 1% on Monday before the earnings statement, which came after trading closed. They have underperformed the Abu Dhabi index, which is up almost 9% this year. (Reuters)

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