ABU DHABI: The UAE operations of e& (formerly etisalat) saw the earnings before interest and taxes (EBIT) growth outpacing revenue growth nearly ten-fold in the financial year 2024, even as a revamped Federal royalty structure significantly impacted the company’s earnings.
e&, formerly etisalat, is one of the largest telecom providers in the region with an asset base of AED183 billion ($50 billion), The company with presence in 38 countries across the Middle East, Asia, Africa, and Central and Eastern Europe, serving approximately 175 million customers daily, is the 16th largest mobile network provider in the world.
While total revenue from the UAE operations of e& grew 5.18 per cent from AED30.80 billion to AED31.99 billion, EBIT surged nearly 50 per cent from AED9.95 billion to AED14.85 billion.
At the consolidated level, net profit attributable to owners of e& rose 4.3 per cent year-on-year to AED10.75 billion from AED10.30 billion. e& is one of the largest telecom players in the region with an asset base of close to AED183 billion ($50 billion) as of 2024-end.
Royalty overhaul excludes global earnings
A key highlight of the year was the introduction of a new Federal royalty system for e&, which led to a three-fourth increase in royalty payments – from AED3.04 billion to AED5.28 billion in 2024.
For the first time, the royalty calculation excluded international revenue and earnings. Under the revised guidelines, a 38 per cent royalty rate applies only to net earnings from regulated and non-regulated activities within the UAE. Earnings from international entities or overseas investments subject to at least a 9 per cent corporate tax are excluded from the royalty computation.
“This change simplifies the royalty structure and aligns it with the introduction of a 9 per cent corporate tax in the UAE, effective from January 1, 2024,” a Dubai-based chartered accountant told businessbenchmark.news.
Debt soars
e&’s total borrowings surged 41 per cent in 2024, reaching AED69.2 billion from AED49.04 billion. Notably, over half – AED 35.85 billion – is classified as current liabilities, requiring settlement within a year. Bank borrowings accounted for AED53.59 billion, while bonds made up AED14.74 billion of the company’s debt.
Robust group-wide performance
Along with the higher royalty costs, consolidated revenue grew 10.1 per cent to AED59.2 billion, up from AED54.75 billion in the previous year. Earnings per share (EPS) climbed to AED1.24 from AED1.18. Meanwhile, operating profit rose 26.4 per cent year-on-year to AED20.06 billion, compared with AED15.86 billion in 2023.
