AED519 mn Khazna deal ‘bonanza’ helps Du earn AED1.4 bn profit for 9M
DUBAI/October 22-2020: For Emirates Integrated Telecommunications Company (EITC) or Du, the one-off gain of AED519.37 million accrued from the sale of 26 per cent stake in Khazna Data Centre was a saviour this time.
The Khazna Data Centre deal has handed out the company a profit of 185 per cent on the carrying value.
Du reported a net profit of AED1.40 billion for the nine months ending September 30, 2020 against AED1.30 billion a year earlier representing 7.69 per cent growth.
For the three months ending September 30, the net profit earned by the company was AED824.14 million against AED381.19 million, registering a growth of 116.20 per cent growth.
One-off gain helps
Excluding the one-off gain from Khazna Data Centre deal, the company would have reported a decline in profit for both three-month and nine-month periods ending September 30, 2020.
While the decline in net profit for 9-month period would have been 32.39 per cent, that for the three-month period would have been 20.05 per cent in comparison with the respective periods a year earlier.
However, the company statement said the revenue for the third quarter increased sequentially by 0.7 per cent to AED2.69 billion, compared with the previous quarter, reflecting the first signs of recovery in the economic activity and the re-opening of tourism in the UAE.
Moreover, the company said it reported a strong 41.6 per cent quarter-on-quarter growth in its quarterly adjusted net income.
Fahad Al Hassawi, Acting CEO of EITC highlighted the improvement in Q3 business volumes and performance achieved by the company compared with the previous quarter, which was characterised by lockdowns and severe disruptions in business activity.
“Our quarterly revenues are up 0.7 per cent quarter-over-quarter to AED2.69 billion and our quarterly net income is up 116.2 per cent, year-on-year to AED 824 million,” Al Hassawi added.
Revenue falls year-on-year
The revenue for the 9-month period declined 11.28 per cent, from AED9.40 billion to AED8.34 billion, whereas the decline in the three-month revenue was 12.38 per cent – fromAED3.07 billion to AED2.69 billion.
Mobile revenue fall steep
The fall in mobile revenue during the nine months ending September 30 at 16.29 per cent was steeper than that in other segments, from AED5.28 billion to AED4.42 billion.
While the ‘wholesale’ segment revenue fell by 10.32 per cent – from AED1.55 billion to AED1.39 billion, the ‘fixed line’ revenue surprisingly staged a growth of 3.78 per cent as it grew from AED1.85 billion to AED1.92 billion during the nine-month period ending September 30, 2020.
Khazna deal return at 185 pc
On September 14, 2020, EITC Investment Holding, a fully owned subsidiary of EITC Group, signed with Technology Holding Company, a fully owned subsidiary of Mubadala, a sale and purchase agreement, to sell its 26 per cent shareholding in Khazna Data Centre for a consideration of AED800 million.
With a carrying value of investment at AED280.21 million, the deal at AED800 million fetched the company a one-time profit of AED519.37 million, which works out a profit rate of a whopping 185.35 per cent.