[edit] Title updated from DU 2008 results forecast, press release (next post) is obscure about actual results for FY and Q4 2008 - giving figures before royalties, EBITDA, etc. I'll figure it out later. Presumably it was a loss otherwise they would have highlighted net profit due to shareholders? [/edit]
Du results forecast
This report of a results (loss) forecast for Du Telecom (DU) is the second half of a report from The National, the first half was about Etisalat profit forecast for 2008, which I've put in a separate topic with some comments. I haven't calculated PEs for Du because they'd be negative, and therefore meaningless.
The National 01 January 2009:
... Its domestic competitor, du (DU), also became profitable last year, although the huge costs of developing a national mobile network continue to weigh on the company’s bottom line. The investment bank EFG-Hermes predicts du will report a small net loss of Dh41 million for the year, but says it has become profitable on an earnings before interest, tax, depreciation and amortisation (ebitda) basis, with an ebitda profit of Dh250m for the year.
This year, du will invest at least Dh2bn into its infrastructure and management systems as it races to provide a quality service to a fast-growing customer base. The company says it adds more than twice as many new customers as Etisalat each month, but subscribers complain of poor quality on its network.
The continuous growth of the UAE mobile market has some analysts questioning the accuracy of official population figures and the methods used by the two companies to calculate subscriber numbers.
“For subscribers to continue to grow strongly while the penetration rate approaches 200 per cent, one has to at least question the accuracy of the data used in estimating this penetration rate,” said Marise Ananian, an associate on the equity research team at EFG Hermes. Ms Ananian believes that, like other growing Gulf economies such as Qatar and Bahrain, the UAE will soon revise its population figures significantly upwards.
Etisalat recently said that 90 per cent of its more than seven million UAE subscribers were active, meaning they had made or received calls or text messages in the preceding 90 days. For du, which reported 2.67 million customers in November, the active subscriber figure is about 80 per cent.
Osman Sultan, the chief executive at du, has said that many of the firm’s subscribers also had Etisalat lines, and convincing this segment of the customer base to become exclusive du subscribers was a priority for the company.
[edit] Title updated again and results summary added to this post [/edit]
DU 2008 Q4 profit Dh78m +153%, FY 4.1m +100% 09 Feb 2009
PE (annualised) 131.6 23.5 -82% 1784.7
Price to Book Value (PBV) 10.4 6.8 2.9 -72% -57% 10.4 2.9 -72%
Profit Margin (ROS) -23% 3% 6.4% 130% 110% -58% 0.1% 100%
Return on Assets (ROA) -13% 2.1% 4% 130% 89% -20% 0.053% 100%
Return on Equity (ROE) -23% 5.2% 12% 150% 140% -35% 0.16% 100%
PE, ROA, and ROE are annualised figures. DU 4th quarter data not supplied with financial statements so Q4 figures calculated from FY and M9 data and appear to agree with Q4 figures in Du press release.
- Records first profitable year achieved in less than two years of operation
- Strong quarter-on-quarter EBITDA growth throughout 2008
Dubai – Emirates Integrated Telecommunications Company (DU) today announced its first profitable full year to 31 December 2008, recording a net profit before Royalty of AED 8 million less than two years after launch and well ahead of analysts expectations. .
Highlights for the fourth quarter:
• 628,000 mobile customers added during the quarter
• Total revenues for the quarter reached AED 1,227 million, nearly double those for the same period in 2007 (AED 640 million)
• Gross margin of 66%, up from 58% in Q4 2007
• Earnings before interest, tax, depreciation and amortization (EBITDA ) of AED 236 million, compared to an EBITDA loss of AED 79 million in Q4 2007
• Net profit of AED 78 million, up from a net loss of AED 147 million in Q4 2007 and more than double Q3 2008 profit of AED 31 million
Highlights for the full year:
• 1,881,000 mobile customers acquired, with total active mobile subscribers increasing by 104% year-on-year to 2,498,000.
• 72% growth in du’s fixed line subscriber base from 163,000 to 280,000 active subscribers
• Total revenues more than doubled to AED 3,951 million compared to AED 1,537 million for 2007
• Gross margin of 64%, up from 56% in 2007
• EBITDA reached AED 368 million, up from an EBITDA loss of AED 706 million for FY 2007.
• Net profit before Royalty of AED 8 million up from a net loss of AED 885 million in FY 2007.
Commenting on the results, Ahmed Bin Byat, Chairman of du, said, “2008 was a year of milestones for du. Not only did we record a net profit for the first time – a substantial achievement in its own right – but we did this well ahead of expectations. In December, we passed the three million customers mark, more than doubling our customer base in less than a year. This is truly exceptional performance and testament to the hard work and dedication of du’s management and employees.
“We start 2009 stronger than ever before, but mindful of potential challenges ahead. We are not complacent – either in terms of our market share or the global economic environment. We will continue our focus on innovation and value for money to develop and launch services that our customers want to use. As a result, I feel confident that du is well positioned to prosper throughout 2009 and beyond.”
Osman Sultan, du’s Chief Executive Officer, said, “In less than two years, du has made remarkable progress. Throughout 2008, we built on the solid foundations already in place to grow our business substantially. Active mobile subscribers more than doubled year-on-year, with fixed line subscribers demonstrating strong growth. Furthermore, while we have upheld our quality offering and remained competitive on price, this has not been at the cost of profitability and the bottom line. In a mature telecoms market, we continue to offer our customers new and original packages that will also help grow our business across all segments.”
2008 results analysis
Focus on evolving du’s existing offering, as well as pioneering new products and services to deliver innovative, tailor-made packages reaped rewards in 2008.
Overall revenues for FY 2008 grew by 157% year-on-year to AED 3,951 million, compared to AED 1,537 million for 2007. This growth was primarily driven by the strong growth in mobile revenues from new subscribers aided by continued growth in our fixed subscriber base.
Over the twelve month period du added a further 1,881,000 mobile customers translating into a closing active subscriber base of 2,498,000 and a corresponding mobile revenue of AED 2,628 million, a substantial increase of 274% year on year.
During the year, mobile launches included the groundbreaking Freetime offer to all du mobile customers giving free credit on international calls, saving up to 60% on call rates, the ‘Alo’, Pay as you Go mobile service targeted at the large expatriate labour workforce in the UAE and MyFamily, another first of its kind offer in the region giving 50% discounts on calls between family members.
Fixed line revenue accounted for AED 830 million for the full year - a 58% year on year increase and 14% increase quarter-on-quarter, due to a significant increase in the subscriber base. Broadcasting revenues remained stable during the year in line with forecasts. In 2008, du introduced some of the fastest internet broadband speeds in the region offering 4, 8 and 12 MB broadband speeds. All fibre network infrastructure also replaced certain copper cabling to give customers the opportunity to increase their bandwidths to a maximum of 20MB per second, making it one of the fastest connections anywhere in the region. The du team also continued to work hard to deliver high-definition TV broadcasting to subscribers, providing access to over 165 TV channels from the company’s state of the art teleport facilities.
Earnings before interest, tax, depreciation and amortization (EBITDA ) increased significantly quarter on quarter from AED2 million in Q1 to AED 236 million by the end of the year.
2008 EBITDA growth
Capital expenditure continued with a total of AED AED1.9 billion invested into the development of du’s fixed and mobile networks in the UAE. We see this CAPEX programme as a fundamental part of our 2009 plan, and view a modern, reliable infrastructure as critical to our ability to offer an extensive and high quality service to our customers.
In 2008 we continued to build new base stations to expand our coverage and capacity across the UAE and so provide deeper access to du services to more people in more areas of the country.
Our state of the art 2.5G mobile network now covers over 94% of the UAE whilst we continued to build out our 3G capabilities. We aim to keep on improving on this achievement in 2009.
seems du are doing great despite the global economic crisis. how ever we need to see all the figures in the financial statment to be able to have a bigger picture .
i have great expectations for du and airarabia , so lets wait and see what airarabia results would be .
They are still on plan, and have not been impacted much so far
Remember,
1)they can not continue to grow at these rates for long. Population in UAE may actually drop over the next two years
2) even if they continue to grow at current rate in 2009 (and they should), their profit will still be less than Dhs 600m (15 Fils per share). P/E ratio is worse than Etisalat.
3) Did anyone notice that DU coverage is very bad in Abu Dhabi ?
In short, DU is doing OK, but the share price is not that attractive given the fantastic deals in the market today
2) even if they continue to grow at current rate in 2009 (and they should), their profit will still be ...
Given that the population is growing rather fast in the gulf states, and that half the population are "youngsters" expansion outside UAE must be tempting, even mergers might be considered. _________________ Nakheel bonds SOLD at a lovely lovely profit...My current holdings right now FGB, Deutsche Bank, Credit Suisse, Barclays and Aldar.
i believe du will be having great results this year . the setup has been made and its time to gain after spending on the infrastructure (systems and equipment) .
their products are improving and the services too , and with many users switching to their services we would see more revenue ( all the new land lines in dubai are supported by du )
their products are improving and the services too , and with many users switching to their services we ...
2009 should be anywhere between Dhs300m and 500m profit... Still not a great P/E ratio given the other opportunities in the market. May be by 2010
Selling these shares at Dhs 4.02 in the IPO 3 years ago was rather a high price ?
The company was evaluated to Dhs 32B... It will generate its first real profit 4 years after IPO and it will be limited to Dhs 300-500m ...
Moreover, there is no clear agreemnet how much the fedral government will tax the profit.
Moreover, there is no clear agreemnet how much the fedral government will tax the profit.
Du paid royalties of AED 4 million out of a profit of 8 million for the year. Isn't that a form of tax? Although that struck me as odd - I thought Etisalat were complaining last year that their royalty payments should be renegotiated as Du weren't paying any _________________ UAE IPO list | posting guidelines
I missed this press release . Nothing stands out as unusual in it. No dividends this year (which seems reasonable).
Press Release 10 March 2009:
Du holds its third Annual General Assembly Meeting
Emirates Integrated Telecommunications Company (DU) held the company's third Annual General Assembly Meeting.
At the meeting, Du's Chairman, Ahmad Bin Byat, presented a review of 2008 while highlighting the company's exceptional full year results.
Commenting on Du's performance, Mr Bin Byat said, "2008 was a transformational year for Du in more ways than one. A number of outstanding milestones were reached, notably achieving the company's first full year net profit of Dhs8m before royalty in less than two years of operation. Having exceeded 1 million mobile active subscribers during the fourth quarter of 2007, 2008 has seen us end the year with 2.5 million active mobile subscribers, a truly exceptional result."
The following resolutions were duly passed at the AGM:
To consider and approve the Board of Directors' report for the fiscal year ending 31 December 2008.
To consider and approve the Auditors' report for the fiscal year ending 31 December 2008.
To consider and approve the Company's financial statements along with the profit and loss account for the fiscal year ending 31 December 2008.
To discharge the members of the Board of Directors and the Auditors from their liabilities for the fiscal year ending 31 December 2008.
To approve the Board of Directors Remuneration.
The re-appointment of KPMG as Auditors for the fiscal year 2009 and their remuneration.
The Board of Directors for 2009 comprises: Ahmad Abdulla Bin Byat, Fadhel Abdulbaqi Al Ali, Eissa Mohammed Al Suwaidi, Abdulhamid Mohammed Saeed, Younis Haji Khoori, Waleed Almokarrab Al Muhairi, Jassem Mohamed Al Zaabi, Abdulla Hamad Rahma Al Shamsi and Ziad Abdulla Ibrahim Galadari.
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. Nothing stands out as unusual in it. No dividends this year (which seems reasonable).
