Du, the UAE's second-biggest telecoms operator, reported a 1.3 per cent increase in second-quarter net profit on Thursday, as fixed-line revenues rose.
The Dubai-based operator made a net profit after royalty of Dh453 million in the three months to June, slightly up from Dh447m in the same period last year, it said in a statement on Thursday. EFG-Hermes forecast it would earn a quarterly profit of Dh429m. Total revenues grew 2.9 per cent to Dh3.35 billion but mobile revenues slid 1.6 per cent to Dh1.82bn while fixed-line revenue jumped 9.4 per cent to Dh583m.
"Top-line growth was supported by a solid performance in our fixed line business," Osman Sultan, Du's chief executive, said in the statement. "Mobile revenues, although impacted by seasonality with Ramadan and Eid being observed in the second quarter of the year, were stable."
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Omar Maher, head of telecom sector research at EFG Hermes said the second-quarter figures were more or less what was expected, with no major surprises "except maybe Ebitda margin, which came in a bit stronger, as we expected the margin to be softer due to the seasonality impact of Ramadan".
"I believe it is normal to see muted net profit growth considering: it is a mature market, growth is naturally slow; the UAE economy is slowing down; and competition is toughening up," he added.
He said for the full year, the main growth driver will remain data and ICT,and, from a macro perspective, the Expo 2020.
"Increasing visitors could help improve consumption a bit. In the longer run, the digitisation of the economy and increasing adoption of data across various applications will help ensure stable growth for telecom operators," Mr Maher said.
He said 2018 was likely to be a bit of an "uninspiring" year; the economy is slowing down and "we’re seeing evidence in other sectors, eg real estate, and this will affect the telecom sector and Du sooner or later".
But in the longer run, beyond 2018, he said the fundamentals of the UAE telecom sector remain the healthiest in GCC/Mena and said his firm's 2018 net profit estimate for Du is Du1.8bn.
Regarding Du's restructuring programme, he said it was too early to see the benefits yet.
"This is a longer-term exercise that will take time and investments before we actually start seeing its impact on the numbers." Mr Maher said.
The company said in May it would roll out this year a limited service of 5G, the ultra-high speed mobile broadband that is set to revolutionise the internet, ahead of a wider launch next year. The announcement followed the UAE's largest telecoms firm Etisalat's plans to roll out 5G commercial fixed devices and services this coming September.
Du said its board of directors proposed a dividend payment of 13 fils per share, subject to shareholder approval at its general meeting.
"Our company had a strong second quarter and a solid first half of the year in 2018, with growth across all our key indicators," said Mohamed Al Hussaini, chairman of Du. "Despite a maturing telecom market, we are pleased to deliver excellent growth in revenue and net profit."
Du paid Dh527.5m in government royalty tax in the second quarter, according to a statement on the Dubai Financial Market.
The firm's active mobile subscribers declined almost 4 per cent in the second quarter and is not expected to recover in the second half of 2018, Mr Sultan said. The company disconnected some mobile customers at an accelerated rate on the back of the UAE regulator's "My Number, My Identity" campaign.
"I do not see this reversing," he said. "A lot of action is taken to stimulate usage but when it comes to pre-paid, and we have a bigger proportion of subscribers that are pre-paid, I do not foresee a reversal."
Only 15 to 20 per cent of Du's mobile customer base is in the post-paid segment.
However, the average revenue per subscriber continues to grow, he said, without providing figures.
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Specs
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Know before you go
- Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
- If you’re driving, make sure your insurance covers Oman.
- By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
- Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
- Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.
Day 1 results:
Open Men (bonus points in brackets)
New Zealand 125 (1) beat UAE 111 (3)
India 111 (4) beat Singapore 75 (0)
South Africa 66 (2) beat Sri Lanka 57 (2)
Australia 126 (4) beat Malaysia -16 (0)
Open Women
New Zealand 64 (2) beat South Africa 57 (2)
England 69 (3) beat UAE 63 (1)
Australia 124 (4) beat UAE 23 (0)
New Zealand 74 (2) beat England 55 (2)
more from Janine di Giovanni
Surianah's top five jazz artists
Billie Holliday: for the burn and also the way she told stories.
Thelonius Monk: for his earnestness.
Duke Ellington: for his edge and spirituality.
Louis Armstrong: his legacy is undeniable. He is considered as one of the most revolutionary and influential musicians.
Terence Blanchard: very political - a lot of jazz musicians are making protest music right now.
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Price: From Dh280,000
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
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- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The specs
Engine: 4.0-litre flat-six
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
The story in numbers
18
This is how many recognised sects Lebanon is home to, along with about four million citizens
450,000
More than this many Palestinian refugees are registered with UNRWA in Lebanon, with about 45 per cent of them living in the country’s 12 refugee camps
1.5 million
There are just under 1 million Syrian refugees registered with the UN, although the government puts the figure upwards of 1.5m
73
The percentage of stateless people in Lebanon, who are not of Palestinian origin, born to a Lebanese mother, according to a 2012-2013 study by human rights organisation Frontiers Ruwad Association
18,000
The number of marriages recorded between Lebanese women and foreigners between the years 1995 and 2008, according to a 2009 study backed by the UN Development Programme
77,400
The number of people believed to be affected by the current nationality law, according to the 2009 UN study
4,926
This is how many Lebanese-Palestinian households there were in Lebanon in 2016, according to a census by the Lebanese-Palestinian dialogue committee
North Pole stats
Distance covered: 160km
Temperature: -40°C
Weight of equipment: 45kg
Altitude (metres above sea level): 0
Terrain: Ice rock
South Pole stats
Distance covered: 130km
Temperature: -50°C
Weight of equipment: 50kg
Altitude (metres above sea level): 3,300
Terrain: Flat ice
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Why your domicile status is important
Your UK residence status is assessed using the statutory residence test. While your residence status – ie where you live - is assessed every year, your domicile status is assessed over your lifetime.
Your domicile of origin generally comes from your parents and if your parents were not married, then it is decided by your father. Your domicile is generally the country your father considered his permanent home when you were born.
UK residents who have their permanent home ("domicile") outside the UK may not have to pay UK tax on foreign income. For example, they do not pay tax on foreign income or gains if they are less than £2,000 in the tax year and do not transfer that gain to a UK bank account.
A UK-domiciled person, however, is liable for UK tax on their worldwide income and gains when they are resident in the UK.
