Mubasher: Mobily reported net profits of SAR 18.8 million in the second quarter of 2016, in line with Al Rajhi SAR 23 million estimates, and below consensus estimates of SAR 50 million, according to a report issued by Al Rajhi Capital Research.
Profits were mainly driven by cost optimisation benefits that were partially offset by growing interest costs (+141.6% y-o-y), the report said.
“Gross profit expanded on the back of on-going cost optimisation initiatives and lower sale of hand sets,” it added.
After previously reporting two consecutive quarterly profits, Mobily’s Q2 results confirmed the new profit normal for the company at around SAR15 million to SAR 20 million.
“Given the overall challenges, we believe any improvement is likely to be only gradual. For now, we remain neutral on the stock with a TP of SAR 28 per share,” Al Rajhi noted.
