Shares in Saudi Arabia’s Mobily tumbled for a third day on Thursday as more investors dumped the stock after the telecommunications firm revised 18 months of prior profits and announced a shock third-quarter profit drop.
Before trading started, Abu Dhabi-listed Etisalat, which owns 27.5 per cent of Mobily, said it was confident its affiliate would return to growth soon.
But Etisalat’s statement appears to have done little to bolster investor sentiment, with Mobily’s shares down the maximum 10 per cent at SAR58.50 as of 0801 GMT to reach a 27-month low.
Mobily’s latest drop takes the stock’s losses to 27 per cent since resuming trading on Tuesday.
On Monday, Mobily cut its profits for 2013 and the first half of 2014 by a combined SAR1.43 billion ($381.2 million), 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.
“We do believe there are major risks – at least over the short run,” MubasherTrade wrote in a note.
“Mobily’s future dividends may be reduced, especially (as) the company has a large capital expenditure plan in 2014 and beyond. The lack of clarity surrounding the incident – with the detailed financials not yet published – will likely deter potential investment from investors.”