(Adds CEO comments)
DUBAI, July 19 (Reuters) - Emirates Integrated Telecommunications Co (EITC), also known as du, posted a 1.3 percent rise in second-quarter net profit on Thursday, buoyed by an increase in fixed line revenue.
Net profit after royalties for the three months to June 30 rose to 453 million dirhams ($123.34 million) from 447 million a year earlier.
SICO Bahrain and EFG Hermes forecast du would make a profit of 430.4 million and 428.7 million dirhams, respectively.
Revenue rose 2.9 percent to 3.4 billion dirhams, the United Arab Emirates’ No.2 telecom operator said.
Top line growth was supported by a 9.4 percent increase in revenue from its fixed line business, Chief Executive Osman Sultan said, adding that its mobile revenue, which fell 1.6 percent, was affected during the Muslim fasting month of Ramadan and the Eid al-Fitr holiday.
Mobile subscribers on the du brand fell around 4 percent in the second quarter, largely due to a government policy to disconnect numbers not used for a prolonged period of time or were not registered, Sultan told reporters on a conference call. He said he did not expect this to reverse in the third quarter.
Sultan did not disclose the number mobile subscribers and said that the majority were prepaid customers with postpaid users accounting for about 15 percent to 20 percent.
EITC also operates a service using the Virgin Mobile brand, which Sultan said was still in its “infancy” declining to comment on its performance since it launched last year.
The company is on track to meet its three-year plan launched in 2017 to find savings of around 1 billion dirhams, Sultan said.
The telecom company and rival Etisalat have to pay the United Arab Emirates government a royalty tax on their revenue and profit. In the second quarter, du paid 528 million dirhams in royalties. ($1 = 3.6728 UAE dirham) (Reporting by Alexander Cornwell; editing by Sherry Jacob-Phillips and Jason Neely)