* Has money to maintain dividend payout – CEO
* Payout can be regardless of decrease income in 2016
* Earnings progress down for eight quarters; Q3 6.6 per cent decrease
Du, the United Arab Emirates’ second largest telecoms community operator, doesn’t anticipate a fall in its internet revenue this yr brought on by larger taxes to have an effect on its means to pay a dividend, its chief government stated on Tuesday.
Osman Sultan’s feedback got here after the corporate reported a 6.6 % fall in third-quarter internet revenue to 457.2 million dirhams ($124.5 million), a fall in earnings for the eighth successive quarter.
“The state of affairs when it comes to money within the firm is wholesome and may maintain the dividend,” Sultan stated on a convention name with reporters.
Du, which ended rival Etisalat’s home monopoly in 2007, raised its 2015 dividend to zero.forty three dirhams per share. The agency’s half-yr payout for 2016, introduced in July, was maintained at zero.thirteen dirhams however didn’t embrace a zero.1 dirham particular dividend which was paid final yr.
When requested for additional readability, Sultan stated in an e mail to Reuters, “The dividend coverage is finally a choice for the board, who will proceed to think about present and anticipated enterprise efficiency and future progress plans of their evaluate.”
Sultan stated the payouts can be sustained regardless that its full-yr revenue progress was unlikely to offset a rise in royalty funds because of the UAE authorities. Du made a internet revenue final yr of 1.ninety four billion dirhams.
Outcomes have been beneath strain since late 2014, with the tempo of progress within the cellular market unable to maintain up with the rise within the price of royalties paid to the federal government, which have elevated steadily since 2012.
For 2016 du can pay 15 % of its regulated service revenues, which excludes telephone gross sales, and 30 % of its income from regulated providers, in royalties. These tax charges are up from 12.5 and 30 % respectively in 2015.
The royalty cost within the third quarter was 537.9 million dirhams, up from 481.9 million dirhams within the prior-yr interval. Revenues have been up 2.9 % at three.14 billion dirhams.
A marketing campaign to take away unregistered SIM playing cards by the UAE authorities additionally continues to have an effect on the corporate’s subscriber base, Sultan stated, including that although a decline in pay as you go subscribers was not getting worse, strain on that phase would proceed.
“We’re seeing a type of stagnation within the decline,” he stated.
Pay as you go, or pay-as-you-go, connections are extra extensively utilized by low-revenue staff, who’ve been hit by decreased state spending throughout the Gulf within the wake of decrease oil costs, notably on development tasks.
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Supply: Press Launch