Abu Dhabi-based telecoms operator Etisalat is considering restructuring and outsourcing some of its operations in an attempt to cut costs, according to reports.
This comes as the company reported a 23% drop in its net profit to AED5.8bn (US$1.6bn) in…
Abu Dhabi-based telecoms operator Etisalat is considering restructuring and outsourcing some of its operations in an attempt to cut costs, according to reports.
This comes as the company reported a 23% drop in its net profit to AED5.8bn (US$1.6bn) in 2011 compared to 2010.
Etisalat blamed the impairment charge on its Indian joint venture Etisalat DB for this decline.
“Reported earnings for the year were noticeably impacted by the Supreme Court of India’s recent decision to cancel 122 licences – including that of our Indian subsidiary Etisalat DB,” the company wrote in its recent earnings release for 2011.
“In accordance with International Financial Reporting Standards (IFRS), Etisalat management decided to recognise an impairment charge in 2011 consolidated financial statements amounting to an aggregate of AED3.044bn (US$829m) before Federal Royalty against the full carrying value of goodwill. (…) The net impact of this charge on our consolidated net profit after Federal Royalty amounts to AED1.02bn (US$277m).”
The company posted a 1% increase in consolidated revenues to AED32.2bn (US$8.7bn) in 2011. This was mainly driven by a 17% growth in revenues from international operations, including Etisalat Misr in Egypt and Atlantique Telecom in West Africa.
It was recently reported that Etisalat is seeking to sell its telecoms towers in Africa, which would allow it to raise up to US$600m.
