Saudi telco Mobily swings to Q2 net profit
Saudi Arabia’s Etihad Etisalat (Mobily) swung to a net profit in the second quarter, according to a statement on Tuesday, after not repeating a significant provision recorded in the corresponding quarter of last year.
Mobily, which had slashed 27 months of previously-reported earnings by nearly $1 billion, made a net profit of 18.8 million riyals in the three months to June 30. This compares with a loss of 901 million riyals in the prior-year period, according to a bourse statement.
Three analysts polled by Reuters had forecast Mobily, an affiliate of the United Arab Emirates’ Etisalat, would make a quarterly net profit of 52.5 million riyals for the period.
Its return to profit was attributed to Mobily not repeating an 800 million riyal provision which it made in the second quarter of 2015, relating to a dispute with rival telecom operator Zain Saudi.
Reduced costs from a programme to cut expenses also helped offset higher financial charges, the statement said.
Quarterly revenue fell 7.5 percent to 3.29 billion riyals though, which the company blamed on lower interconnection revenues from mobile termination rate changes introduced in April.
The Gulf Cooperation Council countries cut telecom roaming charges for making and receiving calls and sending text messages within the six-nation bloc by an average of 40 percent from April 1.
Mobily, which competes with Saudi Telecom Co and Zain Saudi, is still recovering from an accountancy scandal which stemmed from the premature booking of revenue from wholesale broadband leases and mobile promotional campaigns.
In July 2015, Mobily made the last in a series of earnings restatements that in total cut 27 months of profits to March 31, 2015, by 3.63 billion riyals.