Etisalat will cut its profits by Dhs162 million ($44 million) because of the decision by its Saudi Arabian affiliate Mobily to restate 18 months of earnings, the Abu Dhabi-based firm said on Wednesday.
The United Arab Emirates’ biggest telecommunications operator owns 27.5 per cent of Mobily, which on Monday cut its profits for 2013 and the first half of 2014 by a combined SAR1.43 billion ($381.2 million), citing accounting errors.
The impact of this is to reduce Etisalat’s post-tax profit by Dhs130 million for 2013 and by Dhs32 million for the nine months to Sept. 30 this year. Etisalat will account for these reductions in its earnings statement for the fourth quarter of this year, it said in a bourse statement.
Etisalat previously announced a net profit of Dhs7.08 billion in 2013, of which Mobily provided Dhs1.18 billion – or 17 per cent – prior to its earnings shock.
Serkan Okandan, Etisalat’s chief financial officer, was appointed deputy chief executive at Mobily in mid-October this year. He remains Etisalat’s finance head.
Mobily’s shares are down 18.5 per cent in the two days since its earnings shock, which also included a 71 per cent drop in third-quarter profit.
Etisalat’s shares, which can only be owned by UAE citizens and are closed to institutions and foreign investors, have fallen 0.9 per cent over the same period.