Dubai / Gulf Time
Emirates Integrated Telecommunications Company (EITC) published its financial results for the quarter-ended June 30.
While revenues of the company increased by 9.9% to AED 3.14 billion on sustained demand for broadband and mobile services, Ebitda improved by 12.1% to AED1.27 billion thanks to a sharp increase in service revenues and gross margin expansion.
EITC’s net profit increased by 26.2% to AED303 million and operating free cash flow (Ebitda – Capex) grew 47.7% to AED709 million thanks to higher Ebitda and Capex spend that is beginning to normalise. On the basis of these results, the Board of Directors approved an interim cash dividend of AED 0.11 per share representing a 10% increase over the previous year’s interim dividend.
The company’s mobile customer base grew 13.0% to 7.4 million subscribers. The company highlights the sustained performance of its postpaid segment with net-additions of 24,000, a fourth consecutive quarter of growth, to reach 1.4 million subscribers. The company ended the quarter with 6.1 million prepaid customers. The prepaid visitor customer base tapered following the conclusion of Expo 2020 and the start of the low tourist season. Excluding visitor SIMs, our prepaid customer base remained stable when compared to the previous quarter.
The company’s consumer broadband customer base increased 69.5% to 473,000. EITC attracted 35,000 new customers (Q2 2021: 31,000). This strong performance is due to a combination of connecting new premises to our fiber network and our attractive commercial offering.
Revenues of EITC grew 9.9% to AED 3,137 million and mobile service revenues increased 8.6% to AED1,406 million while handset sales generated revenues of AED196 million.
Fixed services revenues of the company jumped 24.4% to AED855 million as its consumer and enterprise segments continue to perform. In aggregate, service revenues increased 14.1% to AED2,261 million.
Ebitda of EITC increased by 12.1% year-over-year to AED 1,267 million.
This improvement was mainly driven by higher service revenues and improving gross margin. Given mobile and fixed services’ higher profitability, Ebitda margins expanded by 80bp to 40.4%.
Net profit of the company jumped 26.2% to AED 303 million. The impact of higher Ebitda was partially offset by greater depreciation charges and Federal royalty charges.
Capex spend moderated to AED 558 million on a capital intensity of 17.8%. This reflects the usual seasonality as most of the Capex spend is skewed towards the second half of the year. More importantly, our capex profile is continuing to normalize following two consecutive years of high capital intensity.
Operating free cash flow (Ebitda – Capex) of the company increased by 47.7% to AED709 million. This is the combined result of an improving Ebitda and lower capex.
Commenting on the results, Malek Al Malek, Chairman of EITC said, “EITC delivered an excellent set of results. The recovery trend seen towards the end of last year, is morphing into a growth trajectory that is driving revenues back to pre-Covid levels and an improvement in profitability. We are maintaining a dynamic and proactive commercial approach. We will continue launching new products and services for the benefit of our customers. Our transformation projects, a key enabler of these commercial initiatives, are progressing according to plan. With these elements in mind and on the basis of our solid results, I am pleased to announce that the Board of Directors approved the distribution of an interim cash dividend of AED 0.11 per share.”
Fahad Al Hassawi, the CEO of EITC said, “I am really delighted by this quarter’s performance. We have delivered three consecutive quarters of improvements and growth. Crucially, our service revenues have been and will continue to be a significant driver of profitability. Q2’22 service revenues have reached a three-year high. Our commercial and investment efforts continue to bear fruits. We had a fourth consecutive quarter of net-additions on the high-value postpaid segment. Our customer acquisition on the consumer broadband services remains robust. We are also actively managing the efficiency of our business to drive profitability. Cash generation will sustainably improve as our Capex program continues to normalize.
As the UAE economy and population grow, I am confident we will continue to improve our positioning through the various initiatives we are launching.”