Du, the UAE’s No. 2 telco operator, reported a 6.7 percent fall in third-quarter net profit on Tuesday, extending an earnings slump to an eighth quarter, but beat analysts’ average estimate.
The firm had reported declining profits in the preceding seven quarters, according to Reuters data. Chief Executive Osman Sultan said in July the firm needed to regain momentum in the prepaid mobile market if it was to counteract the impact of higher government taxes.
Du, which ended rival Etisalat’s domestic monopoly in 2007, made a net profit of 457.2 million UAE dirhams in the three months to Sept. 30, down from 489.8 million dirhams in the year-earlier period.
Three analysts on average forecast du would make a quarterly profit of 435.2 million dirhams.
Third-quarter revenue was 3.14 billion dirhams. This compares with 3.05 billion dirhams a year ago.
Du paid quarterly royalties – or tax – of 537.9 million dirhams, up from 481.9 million dirhams in the prior-year period.
The company’s results have been squeezed since late 2014 as growth of the mobile market has been offset by a steady increase in the royalty – or tax – paid to the government.
For 2016, du will pay 15 percent of its regulated revenue – which excludes the likes of handset sales – and 30 percent of its regulated profit in royalties. These taxes are up from 12.5 and 30 percent respectively in 2015 and have steadily increased from 2012 onwards.
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