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Tue 25 Apr 2017 10:34 AM

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Dubai telco du sees Q1 net profit slump 24%

Osman Sultan, Du's CEO said the company expects to save $272.3 million) by 2019

Dubai telco du sees Q1 net profit slump 24%
Du CEO Osman Sultan

UAE telecommunications operator Du reported a 24 percent fall in fourth-quarter net profit on Tuesday.

The country's second biggest made a net profit after royalty of $99.35 million (364.9 million dirhams) in the three months to March 31, down from 480.1 million dirhams in the year-earlier period.

The company did report a 2.5 percent increase in revenue, up to $863 million (AED 3.17bn), and a 3.2 percent increase in mobile subscribers, up to 8.3 million.

Osman Sultan, Du's CEO said that despite "challenging market conditions", the company has made progress on the implementing it strategy of customer experience improvement and digital transformation.

"Revenue grew at a steady pace, underpinned by an increase in our fixed line business, offsetting pressure on mobile revenue during the quarter," Sultan said.

"We continued our focus on identifying efficiencies during the quarter, which will enable us to deliver long-term value for our stakeholders."

In February this year, Sultan said the company expects to save 1 billion dirhams ($272.3 million) by 2019 as higher government taxes continue to weigh on its net profit. He said the savings would come from changes to its cost of sales, operational expenses and capital expenditure.

Sultan said data products remain the core pillar of Du's business, with demand for connectivity continuing to grow.

"With data usage showing few signs of slowing, the challenge for our company, as well as the entire telecoms industry, is how best to monetise these new forms of communication," he said.

Du announced its second brand Virgin Mobile during the quarter, and Sultan said he expects the new venture to be a success once it's launched.

"The initial response has been overwhelmingly positive and we are truly excited about the opportunity Virgin Mobile presents in meeting the growing requirements of the fast-paced and dynamic country in which we operate," he said.

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