Etisalat reports robust Q3 boosted by Maroc Telecom contribution

Etisalat posted a robust set of Q3 financials, enjoying double-digit growth in revenue and profit, but the performance would have been much more subdued had it not been for Maroc Telecom (part of consolidated results since May 2014).

Revenue for the three months ended September were up 38 per cent, year-on-year, to AED13.24 billion (US$3.6 billion). Take Maroc Telecom out the equation, however, and sales were up a more modest six per cent over the period. Strong domestic growth and a steady performance in Egypt largely explain the single-digit rise.

Nearly 50 per cent of Q3 group revenue now comes from Etisalat’s international operations, up from 35 per cent in the same quarter the year previously.

Quarterly underlying cash profits, or EBITDA, leapt 53 per cent over the same period, to AED6.97 billion. Without Maroc Telecom, the EBITDA rise would still have been an admirable 14 per cent, although clearly much lower.

Net profit for the quarter was up 22 per cent year-on-year, to AED2.22 billion.

The number of group subscribers was up 25 per cent, to 180 million, compared with end September 2013 (again, thanks largely to Maroc Telecom). More worryingly, the subscriber number was a four per cent drop compared with end Q2 2014. (Etisalat pinned much of the blame on its mobile operation in Pakistan, where it says political unrest has had an adverse impact.).

Total number of subscribers in Pakistan (fixed and mobile) fell from 28.5 million (September 2013) to 26.7 million 12 months later.

The number of mobile subscribers also fell in Etisalat’s home market during the quarter, from 9.33 million (end June) to 8.87 million.

Blended ARPU was up, however, to AED119 (Q2: AED115), helped by a slightly higher proportion of higher-paying post-paid customers in the mobile mix. Post-paid accounts for around 20 per cent of Etisalat’s domestic mobile subscriber base.

Group capex during Q3 was up 45 per cent, year-on-year, to AED1.84 billion. Etisalat attributes much of the increase to its UAE operations and the consolidation of Maroc Telecom.

International operations accounted for 63 per cent of consolidated capex in Q3 2014 (up 38 per cent year on year). Aside from the demands of the Maroc Telecom consolidation, 3G network rollout in Pakistan was a big factor in the spending ramp-up.

Etisalat secured a 3G licence in Pakistan for US$147.5 million during the summer.