UPDATE 1-UAE's Etisalat Q3 profit up, acquisitions continue

ABU DHABI, Oct 18 (Reuters) - Emirates Telecommunications Corp posted a 5 percent increase in net profit for the third quarter on Sunday, in line with analysts forecasts, as it unveiled two acquisitions as part of its growth strategy.

Etisalat said it bought 16.6 percent in French software provider SoftAtHome, created by Orange, Thomson Telecom and Sagem, which provides digital services that combine and coordinate the use of television, computers and telephones. It did not state the value of the stake.

A day earlier, Etisalat, the second biggest Gulf telecoms firm after Saudi Telecom and the first to post results, bought Tigo Sri Lanka, a unit of Nasdaq-listed Millicom International Cellular, for $207 million.

Etisalat has been on an acquisition drive to diversify revenues as the domestic market becomes saturated and competition steps up from a second operator.

The acquisitions will deepen the firm's hold in its home market in the field of digital technology while extending its footprint in mobile telephony abroad.

'Etisalat is studying the opportunities of growth in some markets across Africa, Asia, the Middle East and the wider Arab world,' said Chairman Mohamed Omran in a statement.

'At this time, Etisalat is unlikely to look at European countries due to the lack of growth opportunities and limited openings there.'

'It is a better quarter than we expected in terms of headline numbers, given the economic slowdown,' said Irfan Ellam, telecom analyst at Al Mal Capital.

'Etisalat has also gained mobile subscribers in Q3 and Internet subscribers continues to be strong although fixed line subscribers have gone down. Overall good results,' he said.



CAPITAL EXPENDITURE

Etisalat spent 3.5 billion UAE dirhams ($953 million) on capital expenditure in the first nine months of this year, the statement said. The company said earlier on Sunday that it had no immediate plans to issue bonds but would review its options.

Etisalat posted a profit after minorities of 2.254 billion dirhams for the three month period.

Analysts had forecast profit of 2.27 billion dirhams, according to a Reuters survey.

Etisalat made a net profit of 2.145 billion dirhams in the third quarter of last year, according to the statement.

Revenue in the third quarter fell slightly to 7.36 billion dirhams versus 7.39 billion dirhams in the same quarter last year.

Earnings per share (EPS) stood at 0.31 dirhams versus 0.30 dirhams in third quarter 2008.

Etisalat earned a net profit of 6.847 billion dirhams in the first nine months of this year versus 7.189 billion dirhams last year, down 5 percent.

The company's earnings statement can be viewed at:

http://www.adx.ae/English/News/Pages/ETISALAT%20FINANCIAL%20STATEMENTS%20-%20Q3-09_10-18-09%202_18_53%20PM.pdf



(Reporting by Stanley Carvalho; editing by Thomas Atkins/Will Waterman)

($1=3.673 Uae Dirham)

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Keywords: ETISALAT RESULTS/

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