Du proposes 1st Dividend Payment to Shareholders

Dubai Telecom operator Du proposed its first dividend payment to shareholders on Tuesday despite seeing its full-year net profit hit by an increased royalty fee to the UAE Federal Government.

The company made a net profit of Dh1.1 billion ($300 million) in 2011, up from Dh1 billion ($270 million) in 2010, after taking into account the newly structured royalty fee, which stood at Dh715 million, compared to Dh184 million ($50.10 million) in the year-before period.

Du, which is proposing a dividend of Dh0.15 (0.04 cents) per share, paid a fee comprising of 15 percent of net profit and 5 percent of total revenues for the first time.

“The decision to pay dividends celebrates the position we have built in the market,” said Ahmad Bin Byat, Du’s chairman in an e-mailed statement.

“By the end of 2011 we served more than 46 per cent of the UAE mobile market according to the Telecommunications Regulatory Authority an enviable achievement in just five years. Today, more than five million people across the Emirates actively use our services,” he added.

Du’s net profit for 2011 before royalty grew by 47.8 percent year-on-year to Dh1.8 billion ($490 million), up from Dh1.2 billion ($330 million) in 2010.

Revenues stood at Dh8.9 billion ($2.42 billion), a 25.2 percent increase on the year-before period. In the fourth-quarter, 278,100 net active mobile customers were added, bringing Du’s total mobile customer base to 5.2 million.

Last month, rival Telco Etisalat proposed a 60 fils (0.16 cents) per share dividend for 2011 after posting a 23.4 percent slump in full-year net profit.