Emirates Telecommunications Corp (Etisalat), the largest Arab telecom firm by market value, posted record profit in the first quarter after adding more mobile phone users in the United Arab Emirates. Net income in the three months to March 31 rose 15.5 percent to 2.12 billion dirhams ($577.3 million), or 0.35 dirhams per share, compared with 1.84 billion dirhams, or 0.31 dirhams per share, in the year-earlier period, the state-controlled company said in a statement on the Abu Dhabi bourse website. The number of mobile phone users in the UAE, the second-largest Arab economy, rose 4 percent to 6.63 million, compared with three months earlier, Etisalat said, without giving a year-earlier comparison. Chief Executive Officer Mohammed Al-Qamzi told Reuters the company was adding about 1 million mobile phone users per year in the UAE, and expected foreign operations to contribute more to profit this year as the UAE home market matures. “Foreign countries will contribute more this year,” Qamzi said. “Saudi Arabia will lead.” Full-year profit growth will exceed the 15 percent in the first quarter, Qamzi said. Etisalat said this week it sold 43.75 million shares in Saudi affiliate Etihad Etisalat (Mobily), generating returns of 2.33 billion dirhams ($634.3 million) that would be counted in the second quarter. The sale cut its stake in the second of Saudi Arabia's two mobile phone operators to 26.3 percent from 35 percent. Saudi Arabia is the world's largest oil exporter whose economy is growing on a near six-fold increase in oil prices during the last six years that has filled government coffers and boosted spending. Etisalat's first-quarter results exceeded two forecasts in a Reuters survey last month of 1.9 billion dirhams and 2.03 billion dirhams. Shares of the company, which are only open to ownership by UAE nationals, were up 14.1 percent this year to Wednesday's close. They fell 0.5 percent on Thursday, before the results were released. In contrast, shares of Kuwait's Mobile Telecommunications Co (Zain), another Arab telecom company which is expanding abroad, are down by almost 5 percent this year. Etisalat operates in 16 countries including Egypt, Pakistan and some African nations. It is looking to enter the Indian telecom market, and has said it held talks with several companies including Spice Communications about possibly making an acquisition. Etisalat said foreign operations will contribute more to profit this year as its United Arab Emirates home market matures. Operations in countries such as Saudi Arabia, where Etisalat has a stake in the one of two mobile phone operators, will lead the diversification of revenue, Chief Executive Officer Mohammed Al-Qamzi told Reuters on Thursday, after the company said it posted a record profit on more mobile phone users in the UAE. Profit growth this year will exceed 15 percent, Qamzi said. __
