Saudi Telco Mobily Swings To Q1 Net Loss, Misses Forecasts - Gulf Business
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Saudi Telco Mobily Swings To Q1 Net Loss, Misses Forecasts

Saudi Telco Mobily Swings To Q1 Net Loss, Misses Forecasts

Mobily, an affiliate of the United Arab Emirates’ Etisalat, made a net profit of SAR199 million in the first quarter of 2015.

Saudi Arabia’s Etihad Etisalat (Mobily), which is under investigation by the bourse regulator for insider trading and share price manipulation, missed forecasts as it swung to a SAR199 million ($53 million) net loss in the first quarter.

The loss comes after the company restated 18 months of earnings covering 2013 and 2014 and then posted a huge loss in the final quarter of last year.

The No. 2 telecom operator in the kingdom has been hit by accounting errors related to the excessive booking of revenue from wholesale broadband leases and mobile promotional campaigns.

The company on Tuesday blamed its latest loss on a SAR250 million riyal rise in depreciation expenses, a further provision of SAR133 million riyals to cover customer payments it was doubtful about receiving, as well as lower overall revenue.

Mobily, an affiliate of the United Arab Emirates’ Etisalat , made a net profit of SAR1.61 billion in the prior-year period, it said in a statement.

The first-quarter earnings fell short of estimates of two analysts, who forecast Mobily, which competes with Saudi Telecom Co and Zain Saudi, would make a quarterly profit of SAR470.1 million and SAR515.0 million.

The company reiterated an earlier commitment to meeting its debt obligations, which amounted to SAR15.8 billion at the end of March.

Mobily said in March it did not expect to meet a net-debt-to-EBITDA (earnings before interest, taxes, depreciation and amortisation) covenant as of last Dec. 31 under its long-term financing facilities with various lenders.

Discussions with lenders about a reset of the covenant were ongoing and were expected to be finalised during the second quarter of 2015, it said.

In November, Mobily cut its profits for 2013 and the first half of 2014 by a combined SAR1.43 billion, citing accounting errors, and also reported a 71 per cent drop in third-quarter profit.

Mobily’s actions prompted the bourse regulator to launch a probe. It said it was investigating Mobily for insider trading and share price manipulation.

Mobily shares are down 49 per cent since its earnings restatement.

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