The Emirati Telecommunications company Etisalat saw its second quarter profits decline nearly 15 percent, the Abu Dhabi-based English daily The National reported Monday.
Etisalat posted a 1.59-billion Emerati Dirhams (Dh), or $434-million for quarter two, as opposed to 1.87-billion Dh, or $509-million, for the same period last year. This decline translates to roughly 15%.
The slump in profit was far larger than expected, and analysts at EFG Hermes, an Egyptian investment firm, told the Qatari Gulf Times that they expected a 3% decline in Q2 two profits.
Etisalat reported higher operating costs, which rose from 4.94-billion Dh, or $1.34-billion, in the second quarter to 4.99 billion ($1.35-billion) for the same period last year. Staff costs rose 17.5% to 1.25-billion dirhams, or $340-million.
Nishit Lakhotia, a telecoms analyst at Bahrain-based Securities & Investment Company, told Reuters that “Etisalat has been facing tough competition at home, which is its key market, contributing more than 70% of Etisalat’s revenues.”
The decline in profits affected the share price, which was down 0.9% on Monday to 10.90 Dh ($2.97). Etislat also announced a mid-year dividend of 25 fils a share, or $0.06.
Etislat operates in 18 countries, and is the third largest mobile operator in Egypt. The company has 14 million mobile subscribers in Egypt.