* Q4 profit 994 mln dirhams vs 440 mln dirhams a yr ago
* Q4 revenue 2.74 bln dirhams vs 2.4 bln dirhams a yr ago
* Proposes cash dividend of 30 fils per share
* Shares surge to four-year high on results
(Recasts, adds CEO comments, details)
By Matt Smith
DUBAI, Feb 19 - Du, the United Arab Emirates' No. 2
telecom operator, beat quarterly profit forecasts, helped by a
buoyant local economy, and said it was dropping plans to expand
into Saudi Arabia because it would need to find a partner.
Chief executive Osman Sultan said on Tuesday du did not meet
the criteria to bid for one of three so-called mobile virtual
network operator (MVNO) licences for sale in Saudi Arabia.
"We wouldn't qualify directly (and) going there through some
kind of partnership would make the financial equation less
interesting," he told reporters. "I don't see us going into
regional expansion at least in the coming two years in the
traditional way, which is new licences."
MVNOs lease capacity from conventional mobile operators and
pay a percentage of their revenue to them, as well as fees.
Dubai-based du had hoped to expand beyond its UAE base as
mobile penetration growth stagnated, but with the country's
economy buoyant this now appears less of a priority.
The UAE government has estimated GDP grew around 4 percent
in 2012, while it attracted 30 billion dirhams ($8.2 billion) of
direct foreign investment last year.
Du said its fourth-quarter net profit more than doubled
after it wrote back tax provisions. Its per-customer revenue
also rose and its mobile subscriber base increased by nearly a
quarter from a year earlier.
Sultan said du's 2013 capital expenditure would be roughly
the same as last year's 1.7 billion dirhams, with the money to
be spent on expanding and improving its mobile network and
Du, which ended rival Etisalat's domestic monopoly
in 2007, made net profit of 994 million dirhams in the three
months to Dec. 31, up from 440 million dirhams in the
year-earlier period. Analysts had on average forecast a profit
of 809.7 million dirhams, in a Reuters poll.
Du's shares surged 11.7 percent to their highest close since
Fourth-quarter revenue was 2.74 billion dirhams. This
compares with 2.4 billion dirhams a year earlier.
UAE telecom operators are taxed via royalties under licenses
from the federal government. The latter announced a new formula
in December that includes a levy on revenues as well as profits.
Du had expected to pay 50 percent of its profit in royalty
fees through the year, the same rate as the longer-established
Etisalat. But the new formula means it pays less tax as a
percentage of profit than 2011, enabling it to write back some
of the provisions it set aside in the first nine months of 2012.
Du proposed a cash dividend of 30 fils per share.
The operator had 6.46 million mobile subscribers as of Dec.
31, up from 5.2 million a year earlier, giving it a market share
of 48.7 percent. Average revenue per user rose to 117 dirhams in
the quarter from 110 dirhams in the third quarter.
The company has sought to sign up more mobile customers to
monthly, or post-paid, contracts, with these customers typically
spending more and being less likely to switch provider.
Post-paid subscribers accounted for about a quarter of du's
fourth-quarter mobile revenue of 2.18 billion dirhams, but less
than a tenth of subscribers.
($1 = 3.6730 UAE dirhams)
(Reporting by Matt Smith; Editing by Amran Abocar and Mark