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Why parent firm, Etisalat UAE is helpless on Etisalat Nigeria’s N537bn debt

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Though the Nigerian affiliate of Abu Dhabi-listed telecoms company Etisalat, is in talks with 13 Nigerian banks to renegotiate the terms of a $1.2 billion loan, the profit it recorded in the recent results released at the Abu Dhabi Exchange may not be enough to drive a rescue operations after all.

Etisalat Nigeria had taken a cumulative and incremental facility in the last four years which now stands at N377 billion, less interests.

Based on its annual earnings statement, the company revealed consolidated revenue hit AED52.4 billion ($14.3 billion) in 2016, up from AED51.7 billion in 2015. In the UAE, its home market, revenue increased 5 per cent to AED30.3 billion.

Otherwise, Etisalat profit rose to AED8.4 billion compared to AED8.27 billion in 2015.

Analysts say the paltry rise in profit of the parent company could not encourage the firm to come to the rescue of the Nigerian arm as the total debt of $1.2bn is found to be higher than even the said profit recorded by the parent firm who may equally has other competing challenges in need of funding.

The CEO, Saleh Al Abdooli has however, hailed the company’s “ability to mitigate the pressures arising from the global economic slowdown”.

Profit in 2016 was boosted by a federal royalty payment and amounted to AED8.4 billion compared with AED8.27 billion in 2015. Notably, Etisalat’s subscriber base dropped to 162 million in 2016 from 167 million at the end of 2015.

Some 12.3 million of its customers at end-2016 were in the UAE, which represented a 6 per cent year-on-year increase, fuelled by strong performance of its mobile and eLife segments. The mobile subscriber base grew 7 per cent to 10.4 million.

Etisalat embarked on an internal restructure in early 2016, which was finalised during the second quarter of the year, and Abdooli said the company was now in “a stronger position to seize opportunities and overcome the challenges of our evolving industry”.

“In 2016, we have crossed another critical milestone in our journey as we started to pursue an ambitious agenda in the digital space,” he said. “The same is a necessity in order to maintain our leadership position in local and international markets as digital becomes the next big thing.”

Breaking out Q4 figures, Etisalat said consolidated revenue hit AED12.9 billion, a 3 per cent rise from AED12.7 billion in Q4 2015, but profit fell from AED2.6 billion to AED2.2 billion in the recent period. In the UAE, Q4 revenue increased by 14 per cent to AED7.9 billion.

The parent company also hinted that 2016 highlights included the acquisition of a 4G licence in Egypt, a 3G licence in Togo and a universal licence in Ivory Coast. As part of the company’s transformation, it also launched Etisalat Digital to oversee the group’s digital agenda. It also claimed a 5G first in the region after conducting live trials.


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