Saudi Telco Mobily Q2 Net Profit Slips 18.6%

The drop was caused by a provision against a scrapped network sharing deal with Atheeb Telecom.

Etihad Etisalat (Mobily), Saudi Arabia’s No.2 telecom operator, matched forecasts on Monday despite a 18.6 per cent fall in second-quarter net profit caused by a provision against a scrapped network sharing deal with Atheeb Telecom.

Mobily, an affiliate of the United Arab Emirates’ Etisalat , made a second-quarter net profit of SAR1.31 billion ($349.3 million), down from SAR1.61 billion in the prior-year period.

Analysts polled by Reuters on average forecast Mobily, which competes with the Gulf’s No.1 operator Saudi Telecom Co and Zain Saudi, would make a quarterly profit of SAR1.33 billion.

In June, Mobily warned its second-quarter profit would be cut by SAR338.7 million following the dissolution of a network sharing deal with fixed-line operator Atheeb. Mobily in May scrapped plans to buy into Atheeb following months of negotiations.

Mobily’s revenue for the three months to June 30 was SAR5.99 billion, according to Reuters calculations, flat to the same period of last year. Mobily didn’t provide a quarterly breakdown in its bourse filing.

For the first half of the year, data revenue contributed 39 per cent of the operator’s total revenue, up from 27 per cent in the same six months of last year.

Mobily’s board proposed paying a cash dividend of SAR1.25 per share for the second quarter, the statement added. This is marginally higher than the SAR1.2 the firm paid for the corresponding three months of 2013, according to Thomson Reuters data.