Etisalat's net profit declines by 23.7% in 2011
Losses from Indian operation dent Etisalat's net profit
Etisalat reported a net profit after federal royalty of AED5.8 billion for 2011, representing a decline of 23.7% compared to a profit of AED 7.6 billion in 2010.
Etisalat said that the decline was the result of an AED 1 billion impairment on net profits following the recent decision by the Supreme Court of India to cancel 122 licenses, including that of Indian subsidiary Etisalat DB.
The telco posted a modest 1% rise in revenues for 2011, reaching AED32.2 billion.
Mohammed Hassan Omran, chairman, Etisalat chairman, said that the company's investments in national broadband network infrastructure had spurred data revenue growth of 20%. The data and internet segment generated revenues of AED 8 billion, contributing to 34% of Etisalat's total UAE revenue.
"These results support our long term investment strategy of diversifying revenues and driving greater efficiencies from our international operations, while enhancing network capacity for the increasing demand for data usage," Omran said.
"Our investment in next generation infrastructure both in the UAE and in our international operations means that we are ready to capitalise on rapidly increasing demands for data capacity," he added.
Excluding the impact of the impairment, operating profits before federal royalty remained robust at 42% and the group maintained a strong cash balance of AED 3.3 billion to reaffirm its investment grade credit ratings.
"Etisalat has continued to achieve growth in its operating revenues, and also maintained strong operating profit margins at 32% before federal royalty," Omran said.
"If we set aside the drop of value in the Indian operation, we see that the corporation has maintained good profitability despite challenges that are being witnessed by business sectors across the globe and particularly in the Arab region."