Etisalat to set record for largest-ever cash dividend in Corporate UAE?

 By CL Jose

Buy-back proposal dropped after ‘toying’ with idea since October 2018

ABU DHABI/February 25-2021: The UAE telecom major Etisalat’s AED10.44 billion profit distribution for 2020 will set the record for the largest-ever cash dividend distribution in the corporate history of the UAE.

The country’s largest bank, First Abu Dhabi Bank (FAB), with a share capital of AED10.92 billion, has also approved a 74 per cent cash dividend, which will work out a substantial AED8.08 billion profit distribution for the financial year 2020.

FAB has always been reckoned as a liberal dividend distributor. And interestingly, this is a year when several companies the world over, including in the UAE, elected to not distribute cash dividends, thanks to the pressure on revenues engendered by the COVID 19.

Etisalat cancels share buyback

As part of the regular dividend distribution, Etisalat has proposed a final dividend pay-out of 40 fils per share for the second half of 2020 representing a total dividend pay-out of 80 fils for the full year.

The board proposed the cancellation of the share buyback programme the company has been toying with for some time, and instead proposed a one-time special dividend of 40 fils per share for full year taking the dividend to AED1.20 per share.

With a share capital of AED8.696 billion, Etisalat’s pay-out this time is set to exceed the net profit of AED10.32 billion the company earned for the year, to AED10.44 billion, possibly the largest dividend any corporate has ever distributed during a single year..

Capital spending

The consolidated capital spending for the company for FY20 decreased by 20 per cent to AED7.1 billion representing 14 per cent of the consolidated revenue.

“Etisalat Group is well positioned for the future and we are confident in our ability to maintain our exceptional financial performance,” said Obaid Humaid Al Tayer (seen in the picture), chairman of Etisalat Group.

Consolidated net profit after Federal Royalty amounted to AED9 billion (excluding minority interest) resulting in a net profit margin of 17 per cent and increased year over year by 3.8 per cent.

International markets

During the year, revenue and net profit growth were witnessed in Etisalat’s international markets while the domestic market experienced a decline in both due to the pandemic and market maturity.

Revenue generated in the international markets increased year-on-year for the full year by 4 per cent to AED21.2 billion, mainly attributed to the growth in Egypt and Maroc Telecom Group. Revenues from international operations represented 41 per cent of the group’s consolidated revenue for FY20

Hatem Dowidar, CEO of Etisalat Group said the company’s prime focus was to ensure business continuity and the sustainability of high quality services in a manner that was safe for the employees and customers.

“This was all possible due to the relentless efforts towards realising our vision while investing for growth sustaining a world-class telecom infrastructure retaining differentiated assets, platforms and capabilities integral to building a network for a better future across our operations,” Dowidar said.

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