One-off investment gain holds up Du profit at AED1.44 bn

By CL Jose

Dividend distribution to use up 88 pc of FY20 net income

DUBAI/ February 09- 2021: An investment gain of AED519.37 million in September has, in fact, helped Emirates Integrated Telecommunications Company (EITC) or du, hold up its net profit for 2020 at AED1.44 billion, which was still lower by 16.76 per cent compared with last year’s net profit of AED1.73 billion.

UAE has two telecom players including Du, the larger player being Etisalat.

The total revenue during the year at AED12.59 billion was down by 12 per cent per cent to AED11.08 billion a year ago. The drop in revenue was mainly contributed by the relatively low mobile revenue during 2020 at AED5.94 billion compared with AED7.05 billion that in last year– a decline of AED1.11 billion or 15.74 per cent.

Dividend pay-out at 88 pc

The total cash dividend, including that has been already distributed and that has been proposed, totalling AED1.27 billion, will land up the company in a pay-out ratio of 88 per cent, which will be the portion of net profit during the year set aside for dividend distribution.

In addition to the interim dividend of AED951.91 million already distributed, the company has proposed an additional payment of AED589.78 million to be distributed for the year taking the total to AED1.27 billion against the year’s net profit of AED1.44 billion.

Investment income matters

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 (including its interest in shareholder loans) in Khazna Data Centre Ltd for a consideration of AED800 million.

On September 30, 2020 the transaction was concluded and EITC Group received the AED800 million cash consideration. The company booked an investment profit of AED519.37 million from the sale of the Al Khazna stake.

Capital expenditure

EITC’s capital expenditure increased by 24.1 per cent year-over-year to AED1.87 billion, representing a capital intensity of 16.9 per cent, its highest level over the last five years.

The strong performance of the fixed segment was supported by a 7.4 per cent year-over-year healthy growth of the fixed subscriber base, which reached 236,000 at the end of 2020.

In 2020, the company invested substantially in network improvements and maintenance, expansion of its 5G coverage and the acceleration of its digital transformation program.

Mohamed Al Hussaini (seen in the picture), chairman of EITC, said the year 2020 has been a challenging year with the unprecedented pandemic impacting all businesses locally and globally.

“Our business model proved solid and resilient compared with many other industries,” he added.

EITC said it has been able to navigate in a turbulent environment and ensure the efficient provision of telecommunication services, vital to the economy and the community especially in these difficult times.

Fahad Al Hassawi, acting CEO of EITC, said the business saw a positive momentum towards a gradual return to normalcy in the second half of 2020, as economic activity and trade and tourism resumed.

“We reported two consecutive quarters of positive revenue growth in the third and fourth quarter of 2020, respectively, and reported a healthy net income of AED1.44 billion for the full year 2020,” Hassawi said.

Ownership structure

EITC is 50.12 per cent owned by Emirates Investment Authority (EIA), 19.7 per cent by Emirates International Telecommunications, 10.06 per cent by Mamoura Diversified Global Holding and the remaining by public shareholders and national companies.

 

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