Dubai telecom operator du reports 19.8% net profit increase in Q1 2025
Total revenues increased by 7.4 per cent year-over-year, driven by solid performance across both service and non-service segments. EBITDA rose by an impressive 15.0 per cent supported by improved revenue mix and efficient cost management, resulting in an exceptional EBITDA margin of 47.4 per cent.
This operational strength translated into a net profit increase of 19.8 per cent, underscoring our continued momentum and financial discipline, according to a press statement released by the company today.
Fahad Al Hassawi, CEO commented, 'We started the year with a very strong first quarter, delivering growth across all key financial metrics and making meaningful progress on our strategy to diversify revenue streams as witnessed by the strategic partnership with Microsoft to develop a hyperscale data centre. The resilient UAE environment coupled with the quality of our offerings and our ability to respond to evolving customer needs contributed to the solid growth in our subscriber base with our mobile base now exceeding the 9 million mark and our revenues witnessing a remarkable 7.4 per cent growth."
He added, "We also achieved a strong margin expansion, with EBITDA margin rising to 47.4 per cent while net profit grew by 19.8 per cent, reflecting disciplined execution of our strategy and effective cost management. Our balance sheet remains robust supported by strong cash generation and the continuing normalisation of capital expenditures in our connectivity business, enabling us to strategically expand into high-potential growth areas. We have reiterated our guidance, highlighting our confidence in maintaining this strong momentum throughout the year.'
According to the company's statement, Q1 revenues grew by 7.4 per cent year-over-year reaching Dh3.8 billion with growth in both service and non-service revenues primarily driven by the strong macro environment in the UAE, our ability to gain market share, as well as our sustained focus on high ARPU products and mix improvement.
Q1 Mobile service revenues increased by 7.4 per cent year-over-year to Dh1.7 billion driven by the growth of our customer base, improved mix and enhanced ability to capture demand for higher ARPU products through higher offer personalisation and data driven Customer Value Management, as well as some non-recurring revenues.
Q1 Fixed service revenues rose by 10.2 per cent year-over-year reaching Dh1.1 billion mainly driven by the higher fibre penetration and the continuing success of our Home Wireless product and Enterprise connectivity solutions.
Q1 'Other revenues' grew by 4.8 per cent year-over-year to Dh1.1 billion driven by the expansion of our ICT business as we continue to seek new revenue streams beyond our core business. The growth was also driven by higher in-bound roaming revenues supported by higher tourists' inflow and higher interconnection revenues reflecting our higher mobile base. This was partly offset by lower handset sale mainly reflecting a phasing effect, with Q1'24 handset sales benefitting from a pull-forward in demand due to supply constraints in the prior quarter, resulting in a higher comparison base.
Q1 EBITDA grew by 15.0 per cent to Dh1.8 billion, with an EBITDA margin of 47.4 per cent. The strong revenues' growth, improved Mix, increased ARPU, lower handset sales and lower authentication costs, as well as the positive impact of the non-recurring revenue items resulted in higher gross margin. This was coupled with improved collections performance and our continuous focus on operational efficiency and strong control of indirect costs.
Q1 Net Profit witnessed a 19.8 per cent growth year-over-year to Dh722 million, representing a Net Profit margin of 18.8% reflecting the strong EBITDA performance and positive interest result.
Q1 Capex was at Dh377 million (Q1 2024: Dh359 million), a capex intensity of 9.8 per cent (Q1 2024 capex intensity of 10.0 per cent). Our core investments remain focused on 5G densification, enhancing indoor coverage and expanding Fibre deployment, and we will further allocate capital to continue developing our ICT activities. We will also continue improving our infrastructure and transforming our IT systems to further enhance the quality of our network and elevate customer experience.
Q1 Operating free cash flow (EBITDA – Capex) increased by 17.9 per cent to Dh1.4 billion, mainly driven by EBITDA growth.
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