Etisalat 'under-valued' - chairman

UNDER-VALUED: Omran said Etisalat's share price has been hit by the market turmoil. (ITP Images)

The share price of UAE telecom Etisalat, which has tumbled almost 10 percent since the beginning of September, is "under-valued" as a result of the recent market turbulence, its chairman said on Tuesday.

"We are under-valued... because of the market conditions, you can see it everywhere... we have gone down, we have been affected, but others have gone down 60-70 percent," Mohammed Hassan Omran told Arabian Business on the sidelines of the Gitex technology exhibition.

Etisalat's shares were up 3.55 percent on Tuesday to close at 16.05 dirhams - a 78 percent discount to EFG-Hermes' 26.1-dirham fair value target, while the Abu Dhabi main index was up 3.75 percent.

The telecom's shares are down 16.44 percent year-to-date, performing slightly better than the benchmark, which is down 19.75 percent over the same period.

Omran said the escalating global financial crisis that has frozen credit markets is not affecting Etisalat due to the company's strong cash-flow and that it is pressing ahead with its aggressive expansion plans.

"We are not leveraged, so we are not affected by the credit crunch. Our expansion plans have not changed," he said.

Etisalat last week posted third-quarter profit of 2.1 billion dirhams ($571.7 million) in the three months ending Sept. 30, up 19 percent on the same period last year.

Omran said the global financial, which has depressed asset values worldwide, is creating acquisition opportunities for Etisalat, without giving further details.

"Some opportunities may become available as a result of the credit crunch, maybe some companies will be suffering and want to sell at lower prices," he said.

Omran said Etisalat is not interested in entering the "saturated" western markets due to their low returns and slower growth.

Etisalat currently operates in 17 countries and last month bought 45 percent of Indian start-up Swan Telecom for $900 million.

Etisalat on Monday announced its international subscriber base across the 17 markets has exceeded 74 million, including fixed-line, internet, cable TV and mobile subscribers.

"We want to get 100 million customers by 2010, to get this we my need to expand. This may mean expanding into one market, it may mean five markets, it depends on the dynamics," he said.

Omran refused to discuss Etisalat's plans to enter the Iraq market, saying it is too soon to talk about the move.

"We have not yet finalised it so we are not talking about it. Because of our stock market obligations we have to be careful," he said.

Omran said Etisalat is looking to adding services within its existing markets such as media applications and services to boost growth.

"We will have more than 90 percent of homes in the UAE using fibre optic in the next three years. We are also moving into mobile banking services, and will look at tie ups with major UAE banks," he said.

Hassan Omran said he is "optimistic" about Etisalat's fourth quarter results, without giving anything away.

"Nobody knows, I am always optimistic, we are doing good. But I cannot give an answer," he said.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM