Etisalat predicts 2013 sales bump; cautious on margins
Telco projects continued revenue rise to $9.4bn, warns profits to remain under pressure
The UAE’s number-one telecom operator Etisalat projected revenue of up to $9.4bn for the coming year and pledged M&A activity and asset sales in what it called “fragmented markets”, according to a report from Reuters.
Despite ever-increasing revenues (a record high of AED32.95bn was posted last year), profits have been sliding for the Gulf’s number-two operator, due to one-off write-downs on foreign opcos and tougher competition domestically and in overseas markets.
Etisalat’s 2012 earnings were posted as AED6.74bn ($1.83bn), down 24% from a peak of 8.84bn in 2009.
In a break with tradition, the telco, which operates in 15 MEA markets, gave an outlook presentation to analysts, projecting 2013 revenue to swell by 3% to 5%. This would mean an intake of between $9.24bn and $9.42bn.
However, Etisalat admitted that profit levels would continue to be challenged and predicted earnings before interest, tax, depreciation and amortisation (EBITDA) of 49% to 51% of revenue in 2013, compared with 51% in 2012.
The Reuters report predicted Etisalat’s pledged M&A activity would occur in African markets citing the company’s previous interest in Vivendi’s 53% stake in Maroc Telecom. Analysts also ruled out any move on the telco’s part to increase its holding in Saudi operator Mobily as the KSA affiliate’s share price reached a six-year high on Wednesday.