UAE Telco e& Surges Ahead in Q1: Strong Financials and Strategic Growth Fuel Investor Confidence

UAE-based technology and telecommunications giant e& has delivered a robust start to 2025, reporting a 129.9% year-on-year surge in net profit to AED 5.4 billion (USD $1.48 billion) and 18.7% revenue growth to AED 16.9 billion (USD $4.6 billion) in Q1. The results, underscored by strategic divestments, AI-driven innovation, and global expansion, position e& as a key player in the digital transformation of industries worldwide.

Financial Fortitude Amid Expansion

e&’s Q1 performance reflects a company leveraging its scale and agility to capitalize on rising demand for connectivity and advanced technologies. Key highlights:
- EBITDA rose 15.4% YoY to AED 7.4 billion, driven by strong contributions from its core telecoms business and emerging tech divisions.
- Subscriber growth hit 12.9% YoY, with total users reaching 194.8 million globally, including 5.3% growth in the UAE to 15.3 million.
- The divestment of a 40% stake in Khazna, its digital payments arm, generated USD $2.2 billion, enabling debt reduction and sharpening focus on core operations.

Strategic Momentum: Tech and Sustainability

e& is doubling down on its transition to a “digital solutions provider”, with Q1 showcasing aggressive moves in artificial intelligence (AI), renewable energy, and global infrastructure:
1. AI Integration:
- Launched the AI Governance Platform with IBM and the Social & Climate Platform with UNDP/GSMA, demonstrating leadership in ethical AI and sustainable development.
- In the UAE, introduced Neo Home (1Gbps fiber broadband) and an AI Parental Control Service for kids’ SIM cards, signaling consumer tech innovation.
2. Global Expansion:
- Acquired Serbia Broadband, bolstering its footprint in Eastern Europe.
- The Africa-1 submarine cable project enhanced connectivity in Pakistan, while Mobily in Saudi Arabia was named the Middle East’s fastest-growing telecom brand.
3. Sustainability Push:
- Partnered with NYU Abu Dhabi on 6G research and expanded its Orva AI-powered healthcare solutions, including an operating room assistant.
- e& Money’s digital wallet surpassed 1 million cards issued, highlighting fintech growth.

Risks and Resilience

Despite the strong results, e& faces macroeconomic headwinds, including global inflation, regulatory shifts, and currency volatility. However, its financial discipline—net debt reduced by AED 8.0 billion post-Khazna sale—and a AAA-rated brand portfolio (USD $20 billion valuation) provide a buffer. CEO Hatem Dowidar emphasized that the company’s “flexible capital structure” and AI-driven operational efficiency will mitigate risks while fueling growth.

Outlook: Dividends, Debt, and Digital Dominance

Investors will welcome e&’s 5% dividend increase (effective May 2025), reflecting confidence in its financial health. With USD $2.2 billion from Khazna and a focus on low-debt targets, e& aims to further expand its 5G, fiber, and cloud infrastructure while scaling its AI and renewable energy initiatives.

Conclusion: A Catalyst for Long-Term Value

e&’s Q1 results are a milestone in its evolution from a traditional telecom operator to a global tech leader. The company’s ability to monetize non-core assets (like Khazna) while investing in high-growth areas—AI, 5G, and sustainable tech—aligns with the $2.3 trillion global digital infrastructure market opportunity. With a subscriber base growing faster than regional peers and a dividend yield now above 4%, e& offers both capital appreciation potential and income stability.

Crucially, e&’s AI-first strategy (evident in partnerships with IBM, Microsoft, and UNDP) positions it to capture the $150+ billion AI governance market, while its renewable energy ventures (e.g., the Texas SAF plant) align with ESG-driven investment trends. As the company executes its “Tech for Good” vision, investors can expect e& to remain a top-tier play in the digital economy’s next phase.

With a 129.9% YoY net profit surge and 194.8 million subscribers, e& is proving that innovation and financial prudence can coexist—making it a compelling buy for portfolios seeking exposure to the future of tech.