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Etisalat’s Earnings Disappoint

ABU DHABI - The Emirates Telecommunication Company, or Etisalat, posted a four per cent increase in its net income in the first quarter, well below analysts’ expectations, but saw its corresponding revenues jump by 13 per cent over the same period last year.

Etisalat earned a net profit of Dh2.18 billion in the first quarter of 2009 compared to Dh2.10 billion in 2008, the company said in a release on its Web site. Net revenues to Dh7.12 billion from Dh6.28 billion.

Mohammad Ali Yasin, chief executive of Shuaa Securities, told Khaleej Times that the market was expecting 10-15 per cent growth in net profit, even during these tougheconomic conditions.

He said that the telecom giant performed much better in the fourth quarter of 2008, when the crisis was already having an effect.

Etisalat said that it has adopted International Financial Reporting Standards, in accordance with the Securities and Commodities Authority’s regulation.

“It is a very positive move. Etisalat views itself as an international company and wants to be in the Top-10,” said Irfan Ellam, telecommunication analyst at Al Mal Capital.

“It is a matter of time before it gets there. Etisalat is one of our top picks.”

Etisalat’s mobile subscribers in the first quarter of 2009 numbered 7.341 million, against 7.285 million in December 2008.

Although the number of fixed-line subscribers fell by 9,000 to 1.349 million, the company added 49,000 Internet customers in the first three months of the year.

Mohammad Omran, Chairman of Etisalat, said that Etisalat continues to achieve growth in both revenues and profits in spite of many economic challenges.

“No sector is immune to the effect of today’s financial climate, but we are delighted that we are continuing to achieve growth,” he said.

Syria and Lebanon Eyed

The chairman said that the telecom operator will continue to expand and strengthen overseas, with Syria and Lebanon identified for potential investments in 2009.

“We await an appropriate opportunity to participate in these markets,” he said. The commercial launch of its India joint-venture is expected during the second half of 2009, the company said.

Mohammad Al Qamzi, Chief Executive Officer of Etisalat, said that the company has completed the testing of a new high-speed mobile network that offers data downloads at 20.37Mb per second.

Abu Dhabi will become the first capital city in the world to become fully connected by Fibre-to-the-Home in the second half of 2009, Al Qamzi said.

· haseebhaider@khaleejtimes.com