UAE telecom giant Etisalat said on Tuesday its net profit plunged 40 percent in the second quarter because of higher depreciation and the impact of its troubled Saudi unit Mobily.
Etisalat posted a consolidated net profit of 1.5 billion dirhams ($409 million) in the April to June period, compared with 2.53 billion dirhams ($689 million) in the same period last year, a company statement said.
“The decline in net profit after Federal Royalty is attributed to higher depreciation and amortisation charges, the impact of Mobily’s additional provision… (and) incurring forex losses,” it said.
Consolidated revenues in the second quarter, however, rose by 6.4 percent to $3.6 billion from $3.4 billion, said the company which serves 168 million clients in the Middle East, Asia and Africa.
Etisalat’s net profit in the first half of 2015 also dropped 20 percent to $1.0 billion from $1.23 billion a year ago.
But its consolidated revenues in the first six months of the year rose 16.4 percent to $7.14 billion from $6.13 billion a year ago.
“This quarter’s 6 percent increase in revenue is an indicator that Etisalat’s long-term strategy for sustainable growth in our markets is the right approach, despite the decline in profit in Quarter 2,” CEO Ahmad Julfar said.
Last year, the company’s net profit surged 26 percent to $2.43 billion as Etisalat saw a hike in subscribers after acquiring a Morocco operator stake.
The UAE government, which owns a 60 percent stake in the company, decided to open it up to foreigners for the first time in June.
Etisalat had said the federal government had decided to allow foreign investors to buy 20 percent of the company’s shares.