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Wed 5 Aug 2015 09:40 AM

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UAE telco du Q2 profit falls 8% as tax burden rises

UAE's No.2 operator generated revenue of $841m, but paid out $129m in company royalties, or tax

UAE telco du Q2 profit falls 8% as tax burden rises

Du, the United Arab Emirates' No.2 telecoms operator, blamed higher taxes as it reported an 8 percent fall in second-quarter net profit on Wednesday that was in line with analyst estimates.

The firm, which ended rival Etisalat's domestic monopoly in 2007, made a net profit of AED502 million ($136.7 million) in the three months to June 30, down from AED547.7 million in the year-earlier period.

Analysts polled by Reuters on average forecast du would make a quarterly profit of AED500.6 million.

Du has proposed a half-year dividend of AED0.13 per share - up from AED0.12 for the same period of 2014 - plus a special dividend of AED0.1 per share, it said in a statement.

The company's second-quarter revenue was AED3.09 billion, up from AED3.02 billion a year earlier.

Quarterly mobile revenue fell 1.4 percent year-on-year to AED2.23 billion despite du's mobile customer base expanding 2.7 percent to 7.36 million as of June 30.

Average revenue per user - a key industry metric - dropped to AED92.6 from AED96.8 a year earlier.

Data made up 31 percent of mobile revenue in the quarter, up from 29.4 percent a year earlier.

The company paid royalties - or tax - of AED476.4 million in the three months to end June, up from AED401.2 million in the prior-year period.

For 2014, du paid 10 percent of its regulated revenue, which excludes the likes of handset sales, and 25 percent of its regulated profit in royalties. These taxes have risen to 12.5 and 30 percent, respectively, this year.

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