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Mon 9 Feb 2009 09:11 AM

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Dubai's du telecom turns first annual profit

Telecom major earns $21.24m in Q4, pushing group to its first annual profit since launch.

Dubai-based telecom firm du earned 78 million dirhams ($21.24m) in the fourth quarter, at the upper end of expectations, pushing the group to its first full year profit since launching mobile services in February 2007.

Du posted a 2008 full year net profit of 4.124 million dirhams in 2008, compared with a loss of 885.27 million dirhams in 2007.

Quarterly revenue rose to 1.23 billion dirhams, nearly double compared to the same period last year, the company said in a statement on Monday.

The telecom firm also said it had doubled mobile phone subscriptions compared to last year, with the number of its active mobile phone subscribers reaching 2.498 million.

Fixed line subscription grew by 72 percent year-on-year to 280,000 active subscribers, the firm said.

Analysts' forecasts for the firms's fourth-quarter profit ranged from 45.22 million dirhams to 83.03 million dirhams in a Reuters survey last month.

The company said it would invest up to 2 billion dirhams ($544.5 million) in 2009 to strengthen its telecommunications infrastructure.

Du made a loss of 146.65 million dirhams in the fourth quarter of 2007 and a loss of 74.03 million dirhams in the first nine months of 2008.

The firm turned its first profit in the third quarter of 2008, a year ahead of plan, posting a profit of 31.47 million dirhams due to growth in subscriber numbers and a one-time gain.

Fourth-quarter net profit of Du's rival Emirates Telecommunication Corp  (Etisalat) fell 19.3 percent to 1.42 billion dirhams ($386.6 million), missing analyst forecasts.

Shares in du lost 70 percent in the last year to Sunday's close, underperforming Etisalat, whose shares lost only around half their value.

At a briefing in Dubai in mid-December, EFG-Hermes said Etisalat and du together had around 9.1 million active subscribers at the end of September 2008 in the UAE, which is home to about 5.05 million people and where penetration exceeds 180 percent. (Reuters)