The Emirati Telecommunications company Etisalat saw its second quarter profits decline nearly 15 percent, the Abu Dhabi-based English daily The National reported Monday. Etisalat posted a 1.59 billion Emerati Dirhams (Dh), or $434 million for quarter two, as opposed to 1.87 billion Dh, or $509 million, for the same period last year. The decline translates to 14.97 percent. The slump in profits was far larger than expected. Analysts at EFG Hermes, an Egyptian investment firm, told the Qatari Gulf Times that they expected a 3 percent decline in quarter two profits. Etisalat reported higher operating costs, which rose from 4.94 billion Dh, or $1.34 billion, in the second quarter to 4.99 billion ($1.35 billion) for the same period last year. Staff costs rose 17.5 percent to 1.25 billion dirhams, or $340 million. Nishit Lakhotia, a telecoms analyst at Bahrain-based Securities & Investment Company told Reuters that “Etisalat has been facing tough competition at home, which is its key market, contributing more than 70 percent of Etisalat's revenues.” The decline in profits affected the share price, which was down 0.9 percent on Monday to 10.90 Dh ($2.97). Etislat also announced a mid-year dividend of 25 fils a share, or $0.06. Etislat operates in 18 countries, and is the third largest mobile operator in Egypt. The company has 14 million mobile subscribers in Egypt. Etislat is based in Abu Dhabi, United Arab Emirates. BM
