Etihad Etisalat's Q1 net profit rises 47%

Saudi's 2nd largest mobile phone firm adds more broadband clients & cashes in revenues from other operators.

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By  Souhail Karam Published  April 21, 2009

Etihad Etisalat, Saudi Arabia's second largest mobile phone firm, added more broadband clients and cashed in revenues from other operators to post a 47 percent rise in first-quarter net profit.

The firm, better known as Mobily, made SAR480m ($128m) in the three months to Mar 31 up from SAR326m ($87m) in the year-earlier period, it said in a statement.

The earnings came below average forecasts by analysts surveyed by Reuters who had expected Mobily to post SAR576.86m ($153.8m).

Revenues rose 22 percent to 2.81 billion riyals leading to a 23 percent increase in operating income at 534 million riyals, the company said.

"The increase in revenues stems ... from usage revenues with rising demand on broadband services and a rise in the wholesale sales business," it added.

"We had expected a quarterly decline in revenue due to seasonality as Hajj boosted fourth quarter 2008 usage significantly," said EFG-Hermes telecom's analyst Nadine Ghobrial.

"Yearly growth in revenue is due to focus on broadband and data segments, which Mobily is doing a good job at raising awareness of in the Saudi market ... in addition to a rise in voice revenue."

Mobily's spokesman Humoud al-Ghobaini said revenues were bolstered by an agreement that allows new fixed line operator Etihad Atheeb Telecom to use Mobily's fiber optic network".

The affiliate of Emirates Telecommunications also made additional money through a national roaming agreement with Zain Saudi Arabia, Saudi Arabia's third mobile operator that began operations last year.

"It was an exclusive deal that allows Zain users to switch to Mobily's network in areas that are not yet covered by Zain," Ghobaini said.

Earnings per share rose to 0.69 riyals in the first-quarter up from 0.64 riyals a year earlier. The company raised its capital by 40 percent in a rights issue in the fourth-quarter.

"Usually, the first quarter is the weakest so we expect stronger results in the coming quarters of 2009," Ghobrial said.

Mobily competes with Saudi Telecom Co (STC), the largest Arab telecom firm by market value, and Zain Saudi Arabia for mobile phone users in the kingdom, the world's largest oil exporter where mobile phone penetration exceeds 100 percent.

STC reported a worse-than-expected 17.9 percent fall in first-quarter net profit.

Mobily said in July it had a 39 percent market share with 11.1 million subscribers.

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