Emirates Integrated Telecommunications Company (EITC), UAE’s second licensed telecom operator, has seen its first-quarter net profit rise 19.1% AED370 million ($101 million) primarily due to higher EBITDA and an increase in finance income.

 

Sustained demand for fixed and mobile services contributed to a significant 10% revenue growth to AED3.44 billion and a 7.7% increase in EBITDA to AED1.37 billion. Operating Free Cash Flow (EBITDA – Capex) was stable at AED958 million.

 

EITC’s focused commercial initiatives drove a 9.4% increase in mobile customers. The company ended the quarter with 8.2 million subscribers on healthy net-additions across the postpaid and prepaid segments. EITC delivered a seventh consecutive quarter of postpaid net-additions (48,000) thanks to the success of its Unlimited non-stop data plans and sustained demand from the enterprise sector, and ended the quarter with 1.5 million postpaid customers. 

 

Customer base

Its prepaid customer base increased to 6.7 million thanks to the continued attractiveness of its Flexi plans as well as brisk tourism activity. 

 

The firm’s consumer broadband offering remains extremely attractive. It attracted nearly 18,000 new customers (Q1 22: 48,000) and ended the quarter with 554,000 broadband customers. This represents a 26.4% increase year-over-year. Again, its commercial initiatives across various product categories and the disciplined execution of our broadband strategy supported another quarter of solid performance. 

 

Financial highlights 

Revenues grew 10% to AED3.44 billion. Mobile service revenues continued their recovery: the excellent performance of the postpaid segment drove a revenue growth of 6.3% to AED1.49 billion. Fixed services revenues jumped 15% to AED936 million on sustained demand from consumer and enterprise customers. 

 

In aggregate, service revenues increased 9.5% to AED2.43 billion. Other revenues grew 11.2% to AED1.01 billion due to a recovery in handset sales and sustained growth of its ICT unit. Handset revenues increased 30.4% to AED282 million on improved supply chain and higher availability of smartphones. 

 

EBITDA increased by 7.7% year-over-year to AED1.37 billion. Higher service revenues led to the increase in gross profit. This improvement was partially offset by a marginal increase in network expenses, higher spectrum costs (network expansion, greater 5G usage) as well as a normalisation of provisions for impairment on trade receivables (Q1 22 provisions benefited from certain positive one-offs). 

 

Capex spend AED408 million (capital intensity of 11.8 %). EITC’s spend during the quarter was focused on expanding its fibre network and its ongoing IT transformation. Operating free cash flow (EBITDA – Capex) was stable at AED958 million.

 

Commercial momentum

Fahad Al Hassawi, EITC CEO, said: “Our commercial momentum remains intact and our portfolio of products and services continues to attract customers across all units. During the quarter, we added 48,000 mobile postpaid customers on strong enterprise demand and the attractiveness of our Unlimited Data Power Plans. We continued growing our broadband customers base by adding 18,000 home wireless and fibre clients. 

 

"We delivered a remarkable performance in the first quarter with double-digit revenue growth. Service revenues increased 9.4% as a result of a consistent and disciplined implementation of our commercial strategy.  

 

“While we continue to seek revenue growth and improve our market position, we are determined to improve profitability and generate higher shareholder value. We are monitoring our cost base for efficiency and focusing the spend on growth opportunities. As we transition to a digital-first telecom operator, our infrastructure investments remain a key element to provide best-in-class customer experience.”-- TradeArabia News Service