Mobily sees profit jump almost 50%

Saudi mobile phone company posts Q2 income of $119.5mn, at top end of analysts' forecasts.

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By  Souhail Karam Published  July 19, 2008

Etihad Etisalat (Mobily), Saudi Arabia's second-largest mobile phone company by market value, reported a 47.4 percent rise in second-quarter net profit, close to the top range of analysts' forecasts.

Mobily, an affiliate of Emirates Telecommunications Corp (Etisalat), said the quarterly net profit was 448 million riyals ($119.5 million), compared with 304 million riyals in the year-earlier period.

The earnings came close to the top range of analysts' forecasts for Mobily's second-quarter profit which ranged from 345 million riyals to 486.4 million riyals in a survey by newswire Reuters last month.

Operating profit rose 24 percent to 530 million riyals on the back of a 25 percent rise in revenues.

Mobily said the rise in net profit was mainly the result of better mobile phone services and more sales outlets.

Etisalat posted a 58 percent jump in second-quarter profit on a capital gain it made after it reduced its stake in Mobily to 26.25 percent from 35 percent.

The rise in Mobily's second-quarter net profit compared with a 30 percent annual increase in the first-quarter which came was both the smallest gain in quarterly profit since the firm started operations in 2005 and below all analysts' forecasts.

Mobily competes with Saudi Telecom Co, the second-largest Arab telecom firm by market value, for mobile phone users in the kingdom, the world's largest oil exporter and home to 25 million people.

Zain Saudi Arabia, an affiliate of Kuwait's Mobile Telecommunications Co (Zain), plans to start operations this year after selling shares to the public in the first quarter.

Mobily, which did not release subscriber numbers, says it has a 39 percent market share with 11.1 million subscribers, its Chief Executive Officer Khaled Al-Kaf told a shareholders' assembly this month.

Mobile phone penetration in the largest Arab economy exceeds 100 percent.

Mobily's stock has fallen almost 35 percent this year, underperforming the index, which is down about 20 percent but in line with the telecom sector index which is down also 35 percent. (Reuters)

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