Du posts full year profit of $357m on royalty fee cut

Telco adds 856,000 mobile users in 2010, expects 40% market share by 2011 end
Du posts full year profit of $357m on royalty fee cut
YEARS PROFIT: Du posts full year profit of $357m on gains from a royalty fee cut (Getty Images)
By Bloomberg
Thu 03 Mar 2011 09:34 AM

Emirates Integrated Telecommunications Co posted a full-year profit of AED1.31bn ($357m) as the UAE phone company known as Du gained from a royalty fee reduction and after customers rose.

Net income in 2009 was AED264m after the company paid an equal amount as royalty fees to the government, the UAE’s second biggest operator said in an emailed statementon Thursday. Revenue rose 32 percent to AED7bn.

Du, which competes with Emirates Telecommunications Corp, added 856,000 mobile phone users in the year, bringing its subscribers to 4.3 million at the end of 2010, according to the statement. Du has about 37 percent of the country’s mobile market share and expects that to rise to 40 percent by the end of 2011, chief executive officer Osman Sultan said November 8.

The company said on February 14 that the royalty fees payable to the federal government for last year will be 15 percent of profit before any distribution. The royalty will be effective from January 1, 2010, it said.

Du paid a full year royalty fees of AED184m in 2010 compared with AED264m a year earlier. Fourth quarter profit after royalty was AED912m, the company said today.

The phone company’s shares have gained 7.1 percent the past year and fell 2.7 percent to 2.87 dirhams in Dubai trading yesterday.

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