Emirates Integrated Telecommunications Company (EITC) became a debt-free company in the third quarter ending 30 September 2022, during which its net profit increased by 12.7 percent to AED319 million ($86.86 million).
The UAE’s second licensed telecommunications operator, EITC was founded in 2005 and owns two brands – du (launched in 2007) and Virgin Mobile (launched in 2017).
Filing its financial results with the Dubai Financial Market (DFM), the company said its revenues increased by 10.5 percent to AED3.17 billion (up 49.8 percent compared to same quarter last year) on sustained demand for broadband and mobile services. EBITDA grew 18.5 percent to AED1.3 billion because of a sharp increase in service revenues and gross margin expansion.
Revenues from mobile service continued its recovery, increasing by 10.7 percent to AED1,443 million while equipment sales generated revenues of AED176 million. Fixed services revenues soared 22.2 percent to AED892 million. In aggregate, service revenues increased 14.8 percent to AED2,335 million.
The increase in service revenues, which inherently leads to higher profitability, lifted gross margin to 65.2 percent (Q3’21 62.2 percent). As a result, EBITDA margin expanded by 277bp to 41.0 percent.
The company now has a debt-free balance sheet. During the quarter, it fully repaid the AED200 million drawn on its revolving credit facilities. This leaves EITC with a net cash position of AED910 million and AED3.8 billion of undrawn facilities.
Fahad Al Hassawi, CEO, commented: “This quarter’s results have been excellent on all fronts. Our business environment has clearly transitioned to post-pandemic normality. We are benefiting from the UAE’s economic dynamism and healthy macro trends.
“Our service revenues are recovering and growing at an encouraging pace: we generated service revenues in excess of AED2 billion for a fifth consecutive quarter. Our profitability continued to improve on a sequential and year-on-year basis.
“We have invested and will continue to invest in our infrastructure to give our customers a simple and the best available experience in the UAE.”
The company spend AED724 million on capex (capital intensity of 22.8 percent), which also reflected the seasonality effect most of the capex spend is skewed towards the second half of the year.
The company reported a 14.7 percent growth in its mobile customer base to 7.4 million subscribers, spurred by postpaid segment where the company added 32,000 subscribers. This marked a fifth consecutive quarter of growth to reach 1.4 million post-paid subscribers. The prepaid customer base of six million remained stable compared to the previous quarter.
With 37,000 new customers during the quarter in the consumer broadband section, its base increased 53.8 percent to 510,000.
Listed on DFM, EITC’s core shareholders are government-related entities, with Emirates Investment Authority holding 50.12 percent stake, Emirates International Telecommunications Company LLC 19.7 percent and Mamoura Diversified Global Holding PJSC 10.06 percent.
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