Dubai’s du proposes higher dividend despite profit drop

Emirates Integrated Telecommunications Co. (du) has proposed paying a higher dividend at AED 0.43 per share for 2015 profit, up from AED 0.32 the year before.

The United Arab Emirates’ second-largest telecom operator said on Tuesday that the drop in its Q4 profit in 2015 was mainly due to higher royalty payments made to the government, as well as a more competitive environment within the sector.

‘’An increasingly competitive environment saw total revenue edge lower in the fourth quarter and a significant 30.1 percent rise in the amount of royalty paid to the government meant net profit after royalty declined on the year,’’ the company’s chief executive Osman Sultan said in a statement to the Dubai bourse regulator.

For FY-2015, royalties rose 20.6 percent from the previous year to AED 1.92 billion.  Net profit for the year after royalties stood at AED 1.94 billion, down from AED 2.11 billion in 2014.

Last month, the telco reported a 10.1 percent drop in profit for the fourth quarter of 2015.

The Dubai-listed company is 39.5 percent owned by Emirates Investment Authority, while Mubadala Development Company and Emirates Communications and Technology hold stakes of 20.08 percent and 19.5 percent, respectively. The remaining shares are owned by investors.