Etisalat ‘s UAE unit remains the primary subscriber to Etisalat ‘s overall value with a several weight of 88.8 % . The UAE ‘s turning expatriate population is driving, in peculiar, the nomadic section of Etisalat ‘s operation, which constitutes the majority of Etisalat ‘s overall gross. They forecast that Etisalat ‘s focal point on nomadic net endorser acquisition should go secondary, as they believe that it will concentrate more on supplying value-added services to retain its high net-worth clients and prolong its nomadic ARPU. Throughout our prognosis period, they believe that cyberspace and broadband endorsers will be the following gross growing driver, with broadband endorsers capturing the majority of this growing.
Competition in the local market:
Despite incredulity refering sustained nomadic endorser growing at a clip when incursion rate in the UAE was already 130 % at the terminal of 2006, with the launch of du, the 2nd Mobile operator in February 2007, quarterly cyberspace nomadic endorser add-ons for the entire market about doubled, making an approximative 570,000 per one-fourth during 2007, compared to an norm of 247,000 endorsers per one-fourth in 2006. They do non anticipate to witness a monetary value war between the two UAE operators in the short term, given the significantly smaller graduated table of operations that ‘du ‘ manages, compared to Etisalat. Given that the degree of engineering deployed by both operators is similar, they believe that the quality and diverseness of bundled services and publicities will be the base for competition in the short term.
Consolidation of international operations:
Throughout 2007, Etisalat increased its bets in most of its international operations, enabling it to to the full consolidate them into its fiscal statements which, they believe, will increase the value of Etisalat in the medium to long term. In the short term, nevertheless, they expect Etisalat ‘s operational public presentation to diminish or decelerate down, as most of these operations are still loss devising.
Strong hard currency place:
Prior to 2006, Etisalat had no debt on its fiscal statements, bring forthing all of its hard currency demands internally. However, with Etisalat ‘s increased focal point on its international operations, direction adopted an external funding policy to fund its growing scheme in these states. On the other manus, despite Etisalat ‘s new debt policy, net debt/EBITDA remains negative, connoting much more room for extra debt capacity and improved leaden mean cost of capital.
Foreign stock ownership prohibition:
Presently, Etisalat is in treatments with both the UAE authorities and the capital market governments to alter it to a corporation governed by commercial jurisprudence. If Etisalat obtains blessing to alter to a corporation licensed by commercial jurisprudence, so it would go eligible for foreign ownership. Presently, merely UAE subjects are allowed to merchandise the stock. In the event that the foreign ownership prohibition is lifted, they anticipate a rise in turnover and portion monetary value.
Aim of the company.
Profile:
Etisalat has been the telecommunications service supplier in the UAE since 1976, and has built up a modern telecom substructure and established itself as an advanced and dependable operator.
A Etisalat stands 140th among the Financial Times Top 500 Corporations in the universe in footings of market capitalisation, and is ranked by The Middle East magazine as the 6th largest company in the Middle East in footings of capitalisation and grosss. The Corporation is the largest subscriber outside the oil sector to development plans of the UAE Federal Government, and is an award-winning socially responsible corporation. Etisalat has besides won awards from across the part for its nationalisation plan.
A Apart from enabling the state with basic telecommunication services, Etisalat besides offers a scope of advanced and modern services that have served to place the UAE as one of the most advanced states in footings of telecom services. Mobile users enjoy the benefits of first-class voice and information applications like WAP, GPRS, 3G, MMS, Push To Talk, BlackBerry services and others. Enterprise and single clients on the fixed-line web besides benefit from services such as ATM ( Asynchronous Transfer Mode ) , Frame Relay, VSAT and ISDN.
A The Corporation offers fixed line services over the Following Generation Network, and has been migrating subdivisions of its users onto the advanced web. The timeline for completion of migration is the terminal of 2007. By set uping NGN, Etisalat will be able to offer voice, picture and information over one individual beginning, enabling true Triple-Play functionality.
A Mobile endorsers exceeded 4.5 million by the terminal of 2005, up 23 % from 2004. This represents incursion of about 100 per cent, a singular figure regionally and internationally. Internet and broadband incursion besides witnessed immense growing during 2005, with incursion at about 51 % . Etisalat has concluded rolling understandings with over 265 operators, and even Etisalat ‘s prepaid Mobile endorsers can roll in many of these webs.
A
In 1982, Etisalat was the first telecom operator in the part to present a nomadic phone service, and was one of the early adoptive parents of GSM engineering, presenting it to clients in 1994. Since so it has established itself as a regional innovator by presenting both 3G and MMS in 2003, and most late, the BlackBerry service in 2006.
Vision:
A universe where people ‘s range is non limited by affair or distance.
Peoples will effortlessly travel around the universe, remaining in touch with household, doing new friends as they go, every bit good as developing new involvements. Businesss of all sizes, no longer limited by distance, will be able to make new markets. Advanced engineerings will open up fresh chances across the Earth, leting the supply of new goods and services to everyone who wants them.
Mission:
To widen people ‘s range.
At Etisalat, we are actively developing advanced webs that will enable people to develop, to larn and to turn.
The Future.
A universe in which engineering extends our range.
Already, music, books and services no longer have to hold a physical format to be sold on-line. Advanced webs will progressively supply instruction, health care and other services and goods. For case, telemedicine already allows patients to seek the best advice from physicians around the universe ; now robotic AIDSs are get downing to do distant surgery possible. As the gait of technological alteration additions, Etisalat will widen its range into new engineerings, services and markets to make chances for our clients.
Business Divisions:
Etisalat University College
UAEnic ( United Arab Emirates Network Information Center )
e-vision
Ebtikar
The Contact Centre
e-Academy
Subordinates:
E-marine.
Etisalat has been in the pigboat overseas telegram concern since 1990 through an in-house overseas telegram care division. In 1998, this activity was spun off as an independent entity incorporated into Emirates Telecommunications and Marine Services FZE ( e-marine ) . The following stage of growing and development for e-marine is the planned restructuring of the concern with a proposal to offer a portion of its equity to strategic spouses. Partnerships will complement the company ‘s bing strengths, open up new markets, and heighten regional coverage. Specific programs for 2007 are in topographic point with the scheduled bringing in July of a multi intent DP2 Vessel, which will function chiefly in the moneymaking offshore oil industry. In the 3rd one-fourth, the berthing agreements on the Arabian Gulf will be shifted to a new port with a much larger terminal. A 2nd berthing/depot installation is under building on the Arabian Sea in Oman and when commissioned in the 4th one-fourth will widen e-marine ‘s range to the Red Sea, down the seashore of East Africa and farther into the Indian Ocean.
Emirates Cable Television and Multimedia E-Vision:
E-Vision is the UAE ‘s taking overseas telegram Television supplier, offering close to 200 channels in over 21 linguistic communications and offering diverse scheduling suited to the diverse population base of the UAE. With the basic bundle entirely incorporating 85 channels, and other options including Showtime Cable, Orbit Vision, ART, Firstnet and Pehla, E-VISION is the most comprehensive overseas telegram Television supplier in the Middle East. Service is now available in Abu Dhabi, Dubai, Sharjah, Ajman and Al-Ain, and is expected to be rolled out across the state shortly.
Emirates Telecommunications and Marine Services FZE- e-marine.
E-marine operates in the field of pigboat overseas telegram installing, care and fix throughout the part and beyond. E-marine is the lone company of its sort in the Middle Eastern part, and handles regional and international undertakings with easiness. This subordinate owns three to the full equipped overseas telegram ships and a modern overseas telegram terminal in Abu Dhabi. Major international undertakings have been undertaken by e-marine including the recent block-2 of the SMW-4 overseas telegram, FOG and FLAG.
Carrier and Wholesale.
Etisalat ‘s Carrier & A ; Wholesale Services Division ( C & A ; WS ) is dedicated to presenting a comprehensive portfolio of high quality wholesale services, widening the range of Mobile operators, bearers and ISP ‘s globally.A
We operate the part ‘s most extended international web, with direct links to over 118 finishs ; an international Mobile web that reaches over 450 finishs. We are the part ‘s largest cyberspace hub and the regional hub for intercontinental overseas telegram systems. C & A ; WS besides provides national wholesale services to the UAE competitory market.
Etisalat ‘s Carrier & A ; Wholesale Services Division provides the undermentioned services:
e-Voice
e-Mobile
Emix – IP Transit Services
e-Capacity
e-Connect
e-Broadcast
ETISALAT INTERNATIONAL:
Etisalat direction recognizes the importance and duty of equilibrating profitableness and growing with long-run sustainability. Over the last five old ages, the Corporation has continued its high growing flight and has been increasingly looking beyond the boundary lines of the UAE.A
All of these enterprises are geared towards carry throughing its vision of fall ining the conference of major telecommunication participants in the universe.
A Its nucleus scheme for market choice remains woven around low incursion and high population. This is backed by strong market research on high growing potency, consumer behaviour, and value creative activity chances.
Today, clients demand non merely basic services but besides want to take advantage of the value concatenation in footings of merchandise and service sections.
Innovative engineering offerings from Etisalat ‘s stable green goods a strong ‘me excessively ‘ component. Etisalat ‘s UAE scheme of presenting the latest engineering has established its repute across the universe, so its subordinates find it easier to come in new markets.
As a consequence, Etisalat is heartily welcomed as a new entrant whose new merchandises and services are thirstily anticipated.
As it expands its planetary footmark, the Corporation has been witting of guaranting that it optimizes the synergisms bing in regional markets such as the Middle East or West Africa. In add-on, it encourages sharing lessons learned in one operation with others.
It has efficaciously utilized its experience of puting up Greenfield operations in Mobily in Saudi Arabia to the market in Egypt. This ensured Etisalat ‘s Egyptian operations passed the 1 million endorser grade within 50 yearss of get downing operations.
Over the old ages, Etisalat ‘s trade name equity has grown in profile. In order to leverage its strong trade name, the Corporation launches all Greenfield undertakings under the ‘Etisalat ‘ trade name.
However, in acquired assets where there is an bing strong trade name ( like ‘Moov ‘ in West Africa ) , it nurtures and strengthens the bing trade name.
In 2007 Etisalat acquired new assets and consolidated its place in bing markets.
It entered two new and exciting markets Nigeria and Indonesia. With their big populations and comparatively low incursion, these markets match Etisalat ‘s nucleus corporate scheme absolutely.
Aligned with the Corporation ‘s mission of widening people ‘s range, other assuring add-ons to Etisalat ‘s investing portfolio can be expected in 2008 and beyond.
FINANCIAL STATEMENT ANALYSIS
Financial ratio analysis is an of import subject. It is widely used to sum up the information in a company ‘s fiscal statements in measuring its fiscal wellness. In today ‘s information engineering universe, existent clip fiscal informations are readily available via the Internet.
We can utilize several tools to measure a company, but some of the most valuable are “ fiscal ratios ” . Ratios are an analyst ‘s microscope: they allow us acquire a better position of the house ‘s fiscal wellness than merely looking at the natural fiscal statements. Ratios are utile both to internal and external analysts of the house. For internal intents: ratios can be utile in be aftering for the hereafter, puting ends, and measuring the public presentation of directors. External analysts use ratios to make up one’s mind whether to allow recognition, to supervise fiscal public presentation, to calculate fiscal public presentation, and to make up one’s mind whether to put in the company.
Calculating fiscal ratios is a pointless exercising unless we understand how to utilize them. One overruling regulation of ratio analysis is this: A individual ratio provides really small information, and may be misdirecting. We should ne’er pull decisions from a individual ratio. Alternatively, several ratios should back up any decisions that we make. With that safeguard in head, there are several ways that ratios can be used to pull of import decisions.
With this “ Fiscal Statement Analysis Tools ” station series, depict what fiscal ratios are and who uses them, specify the five major classs of ratios ( liquidness, efficiency, purchase, coverage, and profitableness ) , calculate the common ratios for any house by utilizing income statement and balance sheet informations, use fiscal ratios to measure a house ‘s past public presentation, place its current jobs, and suggest schemes for covering with these jobs, cipher the economic net income of a house.
We will look at many different ratios, but you should be cognizant that these are, of necessity, merely a sampling of the ratios that might be utile. Furthermore, different analysts may cipher ratios somewhat otherwise, so we will necessitate to cognize precisely how the ratios are calculated in a given state of affairs. The keys to understanding ratio analysis are experience and an analytical head.
We will split our treatment of the ratios into five classs based on the information provided:
Liquidity Ratios, describe the ability of a house to run into its current duties. Consisted of:
The Current Ratio= ( current assets / current liabilities )
The Acid Test Ratio= ( current assets-inventories/current liabilities )
Average Collection Period= ( account receivable/daily recognition gross revenues )
A Efficiency Ratios, ( profitableness ) describe how good the house is utilizing its investing in assets to bring forth gross revenues, consisted of:
Inventory Turnover Ratio= ( cost of goods sold/ stock list )
Fixed Asset Turnover Ratio= ( Sales/ cyberspace fixed assets )
Entire Asset Turnover Ratio= ( gross revenues / entire assets )
Account Receivable Turnover= ( recognition sales/ history receivable )
runing income return on investing = ( runing income / entire assets )
A Leverage Ratios, ( Financing determination ) uncover the grade to which debt has been used to finance the house ‘s plus purchases, consisted of:
The Entire Debt Ratio= ( entire Debt / entire assets )
Timess involvement earned= ( runing income / involvement disbursal )
Tax return on equity = ( net income / common equity )
Tax return On Equity ( ROE ) it shows how are the houses troughs are maximising stockholder welth.
ROE = ( net income / common equity )
statement. And here are “ Income Statement ” and “ Balance Sheet ” of ETISALAT for the old ages 2006, 2007, 2008 and 2004 as informations sourceA we are traveling to utilize through this chief subject.
A The Income Statement.
The income statement is a reasonably simple papers that begins by naming a house ‘s grosss ( possibly by beginnings or in entire ) followed by all of the house ‘s disbursals. The consequence of the income statement is the net income for the period. Net income represents the accounting net income left over after all disbursals have been paid from the gross for the period, and below is the ETISALAT ‘s Income Statement for the twelvemonth of 2006, 2007, 2008 and 2009.
INCOME STATEMENT
Figures in AED million
2006
2007
2008
2009
Grosss
16,290
21,340
27,095
33,156
Entire Operating Expenses
-10,694
-14,730
-19,228
-23,173
Entire Operating Income ( EBIT )
5,596
6,610
7,868
9,983
Depreciation
-1,391
-1,368
-2,147
-2,487
Amortization
-6
-594
-672
-668
Earnings before interest taxes depreciation and amortization
6,993
8,571
10,686
13,139
Interest Income
476
623
722
868
Interest Expense
-262
-503
-426
-349
NPBT
5,810
6,843
8,114
10,448
Deferred Tax
0
-122
-122
-122
Net Income Before Minority Interest
5,810
6,720
7,991
10,326
Minority Interest
50
576
390
389
Net Income
5,860
7,297
8,381
10,715
Income Statement:
The Balance Sheet:
The balance sheet is normally divided in two subdivisions: the assets subdivision at the top or left side, and the liabilities and proprietor ‘s equity subdivision at the underside or right side. It is of import to recognize that the balance sheet must equilibrate ( therefore the name ) . That is, entire assets must be the amount of entire liabilities and entire proprietor ‘s equity. Each of these subdivisions is normally farther divided into subdivisions.
On the plus side, there are two subdivisions. The current assets subdivision describes the value of the house ‘s short-run assets. Short-run, in this instance, is defined as one twelvemonth or the clip it takes for the plus to travel through one hard currency flow rhythm ( i.e. , from purchase to sale to aggregation ) . Typical current assets are: hard currency, histories receivable, and stock lists. Fixed assets are those assets with lives longer than one twelvemonth. Examples of fixed assets include vehicles, belongings, edifices, etc. Like assets, liabilities can be subdivided into two subdivisions. Current liabilities are those liabilities that are expected to be retired within one twelvemonth. Examples are points such as histories collectible, rewards collectible, etc. Long-run liabilities are those that will non be paid off within the current twelvemonth. Generally, long-run liabilities are made up of assorted types of bonds, bank loans, etc. Owner ‘s equity represents the difference between the value of the entire assets and liabilities of the house. This portion of the balance sheet is subdivided into contributed capital and retained net incomes. Contributed capital Bali Cumberland is the investing made by the common and preferable shareholders of the house. Retained earning is the accretion of the undistributed net incomes of the house. And below is the ETISALAT ‘s Balance Sheet for 2006, 2007, 2008 and 2009.
Balance Sheet
Figures in AED million
2006
2007
2008
2009
Cash
10,304
9,433
14,025
17,657
Receivabless
1,091
2,047
3,762
4,509
Shops
66
175
222
272
Other Current Assetss
2,093
1,246
1,139
1,276
Entire Current Assets
13,553
12,901
19,149
23,713
Net Fixed Assetss
8,496
11,876
14,155
15,490
Other Long Term Assetss
23,859
27,671
27,949
27,086
Entire Long Term Assetss
32,355
39,547
42,104
42,576
Entire Assetss
45,908
52,448
61,253
66,289
Short Term Debt
0
343
3,874
775
Payabless
8,568
13,231
14,212
17,212
Other Current Liabilitiess
5,037
4,092
4,321
4,459
Entire Current Liabilitiess
13,605
17,665
22,408
22,447
Entire Grey Area
2,208
1,838
1,448
1,059
Long Term Debt
6,981
3,141
2,635
1,860
Other Long Term Liabilities
3,928
5,746
5,618
4,658
Entire Long Term Liabilities
10,909
8,887
8,253
6,518
Net Worth
19,187
24,057
29,144
36,265
Entire Liabilitiess and Equity
45,908
52,448
61,253
66,289
Balance Sheet Graph.
Cash Flow Statement:
Cash Flow statement
Figures in AED million
2006
2007
2008
2009
Net Net income
5,859,747
7,296,644
8,664,984
8,546,432
Depreciation
1,391,349
1,368,182
1,708,289
2,113,870
Amortization of licences
5,729
593,756
809,283
982,956
Other accommodations
( 538,352 )
( 896,711 )
( 2,423,411 )
( 289,594 )
Operating hard currency flows before alteration in
Working capital
6,718,473
8,361,871
8,759,145
11,136,663
Shops
38,688
( 46,960 )
( 27,638 )
( 40,569 )
Debtors and Prepayments
( 375,655 )
( 262,364 )
( 494,944 )
( 875,115 )
Sums due from/to other telecom
Administrators
( 81,008 )
( 353,675 )
( 503,094 )
( 235,572 )
Creditors and Accumulations
2,208,252
3,175,454
3,119,591
( 930,109 )
Net hard currency from operating activities
8,508,750
10,874,326
10,853,060
9,055,298
Returns from disposal of an investing
–
–
2,324,994
–
Investings
( 4,823,902 )
( 2,488,938 )
( 2,128,196 )
( 1,968,950 )
Intangibles
–
–
–
( 706,396 )
Dividends Received
259,796
194,931
136,371
–
Purchases of fixed assets
( 1,432,084 )
( 3,460,275 )
( 3,661,196 )
( 2,641,489 )
Acquisition of Subordinates
–
( 754,466 )
–
( 875,560 )
License Fees Paid
( 11,236,127 )
( 126,696 )
–
( 1,399,501 )
Interest income received
475,704
622,715
425,804
677,692
Net hard currency used in puting activities
( 16,756,613 )
( 6,012,729 )
2 ( 2,902,223 )
( 6,914,203 )
Due from Associates
–
1,174,579
( 256,616 )
( 123,845 )
Loans to associates
( 422,105 )
–
–
10,287
Loans installment repaid by associates
–
130,495
–
–
Advances/loans from investing spouses
2,088,485
57,804
180,665
–
Repayment/ proceedings
6,980,600
( 4,131,956 )
( 2,164,545 )
2,468,430
Sums contributed by minority portion holders
2,175,321
124,165
–
–
Finance cost paid
( 129,038 )
( 443,462 )
( 413,564 )
( 424,646 )
Dividends Paid
( 2,041,875 )
( 2,835,938 )
( 3,244,312 )
( 5,600,362 )
Net hard currency from funding activities
8,651,338
( 5,924,313 )
( 5898,372 )
( 2,472,236 )
Net alteration in hard currency
403,525
( 1,062,716 )
2,052,465
( 331,142 )
Get downing hard currency
9,658,510
10,304,033
9,432,564
11,294,868
Exchange differences on interlingual renditions
Of abroad operations
241,998
191,247
( 190,161 )
–
Cash at terminal
10,304,033
9,432,564
11,294,868
10,963,726
Tendency Analysis
TREND ANALYSIS
Trend analysis provides signals as to whether the company ‘s fiscal wellness is likely to better or deteriorate. The tendency analysis based upon the undermentioned fiscal ratios:
Leverage Ratios: to mensurate the extent to which the company ‘s assets are financed with debt
Liquidity Ratios: to mensurate the company ‘s ability to pay its measures
Profitability Ratios: to mensurate the company ‘s ability to bring forth net incomes
Efficiency Ratios: to mensurate the company ‘s ability to use its assets
Market Value Ratios: to mensurate the market perceptual experience about the company ‘s future chances.
The downloaded four old ages ‘ balance sheets and income statements are to be used to cipher the fiscal ratios. For illustration, four purchase ratios ( Debt/Equity, LT Debt/ Cap, LT Debt/Tot Debt, and LT Debt/Tot Assets ) are reported, but the involvement coverage ratio ( = net incomes available for interest/interest disbursals ) is losing in the DJI. Students are required to obtain the net incomes and involvement disbursals information from the income statements and cipher this ratio to mensurate the company ‘s ability to serve the debt. In the country of liquidness, current ratio ( = current assets/current liabilities ) and speedy ratio ( = promptly assets/ current liabilities ) are reported, but the interval step ( = quick assets/daily runing outgos ) is non. Students are required to obtain speedy assets ( = hard currency & A ; tantamount + receivables ) from the balance sheets and runing outgos from the income statements, and cipher this ratio to mensurate how long the company can maintain up with its measures utilizing merely bing speedy assets.
FACT SHEETS:
Fact Sheets
2006
2007
2008
2009
Liquidity Ratio
Current Ratio
1.0
.7
.7
.9
Acid trial ratio
Sodium
Sodium
Sodium
Sodium
Average aggregation period
Sodium
Sodium
Sodium
Sodium
Efficiency Ratios
Inventory Turnover Ratio=
Sodium
Sodium
Sodium
Sodium
Fixed Asset Turnover Ratio=
1.92
1.79
1.91
2.14
Entire Asset Turnover Ratio=
0.35
0.41
0.44
0.5
Account Receivable Turnover=
Sodium
Sodium
Sodium
Sodium
Operating income return on investing
12.1 %
12.6 %
12.8 %
15 %
Leverage Ratios
The Entire Debt Ratio=
Timess involvement earned=
21.4
13.1
18.4
28.6
Tax return On Equity
Roe
Growth Rate of Etisalat.
Profitability Ratio.
Liquidity Ratio
Activity Ratio
Decision:
Despite intense competition and planetary market conditions, Etisalat has reported amalgamate grosss of AED 26.21 bn in 2008 an addition of 22.4 % over 2007revenues. Gross from international operations increased by 14.7 % and formed 9 % of group ‘s gross.
With the UAE nomadic market nearing impregnation, the belief is that the nomadic operators will concentrate on high quality value added services. The migration to NGN ( Next Generation Network ) in UAE will enable Etisalat to foster present more value added services. It is believed that UAE will still be the gross driver for Etisalat. A strong fiscal place will enable Etisalat to go on prosecuting its enlargement scheme and oculus strategic acquisition.
The portion of international operations of the groups is expected to turn every bit good as the grosss generated by them which is clear from the fact sheets above.
With the launch of du, the 2nd Mobile operator in February 2007, quarterly cyberspace nomadic endorser add-ons for the entire market about doubled, making an approximative 570,000 per one-fourth during 2007, compared to an norm of 247,000 endorsers per one-fourth in 2006. They do non anticipate to witness a monetary value war between the two UAE operators in the short term, given the significantly smaller graduated table of operations that ‘du ‘ manages, compared to Etisalat. Given that the degree of engineering deployed by both operators is similar, they believe that the quality and diverseness of bundled services and publicities will be the base for competition in the short term.
