Riyadh – Mubasher: Etihad Etisalat Company (Mobily) achieved SAR 19 million profits in the second quarter of 2016 against SAR 901 million losses in the same period of 2015 missing the estimates of SAR 27 million.
The company’s profits hit SAR 35.4 million in H1-16 versus SAR 945 million in the year-ago period, according to a report released by Al Bilad Capital on Wednesday.
“The year-on-year improvement in bottom line in Q2 2016 was triggered by the exceptional provisions of SAR 800 million in Q2 2015, arising from the dispute with Zain KSA,” the report said.
Gross profit declined 11%, or SAR 206 million, to SAR 2,087 million in Q2-16, due to lower cost of services and devices, despite a 7.5% decrease in revenues to SAR 3,289 million in Q2 compared to SAR 3,556 million in the year-ago period.
“The slump in revenues was fueled by the decrease of interconnection revenues as a result of cutting interconnection rates in April 2016,” according to the report.
Sales were down 7% to SAR 6.729 million in H1-16 compared to SAR 7,236 million in H1-15, on the back of interconnection and devices revenues as, adding to slowdown in sales following the enforcement of fingerprint requirements.
Financing expenses surged 143% to SAR 141 million in Q2-16 from SAR 58 million in Q2-15.
“We expect the pressure on the company's performance to continue in Q3 2016 fueled by the suspension of services for subscribers that haven't documented their fingerprint, coupled with the continuation of some fingerprinting expenses,” Al Bilad reported.
It added that it does not expect significant impacts in the short term regarding the memorandum of understanding (MoU) signed between Mobily and Saudi Telecom Company (STC) in the field of communications towers.
Al Bilad maintained Mobily’s share at SAR 28.5, with an “Overweight” recommendation.
