UAE's du telecom Q3 profit down 12.3% on higher royalty

The UAE's second largest telecommunications operator, du, reported Tuesday a 12.3 percent drop in profit in the third quarter, blaming a rise in royalty fees.

Net profit in the period ending September 30 stood at 489.8 million dirhams ($133.5 million), down from 558.7 million dirhams ($152.2 million) last year, the company said in a statement.

"While overall revenue edged higher to AED 3.05 billion in the third quarter, a 16.7% rise in the amount of royalty paid to the government more than outweighed this," said du's chief executive officer Osman Sultan commenting on the results.

Net profit before royalty was unchanged, standing at 971.7 million dirhams. 

But mobile revenues were down 3.3 percent to 2.16 billion dirhams, as the number of subscribers dropped by 3.2 percent to 7.275 million.

The company cited a new regulation imposing the registration of mobile numbers as a reason for the slide in subscriptions.   

The firm ended the domestic monopoly of rival Etisalat in 2007.

It is 39.5 percent-owned by the UAE federal government, 20.08 percent by Abu Dhabi's Mubadala Development Company, 19.5 percent by Emirates Communications and Technology Company and the rest by public shareholders.

du is listed on the Dubai Financial Market. 

Caption : du blames rise in royalty fees for drop in profit