UAE telco du raises $1 billion from banks to expand 5G efforts

UAE telco du raises $1 billion from banks to expand 5G efforts

Dubai-based telco du announced Tuesday that is has raised a long-term debt finance of almost one billion dollars from a consortium of banks, as it looks to heavily grow and expand within the 5G market.

According to operator, the debt will be split a $539 million five-year revolving credit facility and a $484 million seven-year loan facility. While details surrounding the banks involved as well as the financial terms have not yet been made public, local corporations and government bodies are tapping sizeable debt funds as interest rates remain on the lower side.

The announcement comes merely a week following du’s release of its Q1 2021 earnings report that saw the company drop a whopping 27.6 percent in net profit from $70 million to $96.7 million the previous year.

The telco’s earnings report showed that revenues of $784.2 million – which was 5.2 percent higher than the previous quarter – which was 5.2 percent higher than the previous quarter, although it was 3.7 percent lower than the $814 million recorded for Q1 of 2020.

EBITDA stood at AED1.12 billion $305 million, 8.7 percent higher than the previous quarter, while its capital expenditures reached $154.7 million.

“Our capital allocation plan is validated by encouraging broadband net-adds trends and sell-through of iPhone 12. We added 13,000 Broadband customers during the quarter, which is nearly as much as the annual net-adds in previous years,” Fahad Al Hassawi, acting CEO of EITC, said in a statement.

Al Hassawi added that the new operating model seeks to deliver deeper and more personalized customer engagement, a faster go-to-market approach, and a purpose and performance driven culture.

In parallel, du rival and UAE telco giant Etisalat recorded a net profit of $626 million in the first quarter of the year, up 7.9 percent compared to the same three months in 2020, the company’s earnings report showed.

A company statement said its aggregate subscriber base reached 156 million, representing a year-on-year increase of 4 percent. Revenues reached $3.6 billion, while consolidated EBITDA totaled $1.85 billion, representing an increase of 0.7 percent on Q1 2020.

“Etisalat Group’s first quarter results are a continuation of the strong performance the company has achieved over the past year due to the resilience and agility shown across our business operations,” Hatem Dowidar, CEO, Etisalat Group, said in the statement.

Dowidar also highlighted that the company generated record results in the new hybrid scenario helping consumers adapt to a new work-and-learn-from-anywhere reality while continuing to deliver innovative services subscribers require and demand.