Saudi Mobily posts 30pc jump in Q1 net
Riyadh, April 19, 2008
Etihad Etisalat (Mobily) posted a 30 per cent rise in first-quarter profit on growth of its mobile phone business, but missed all analysts' forecasts as it braces for greater competition in Saudi Arabia.
Mobily made SR326 million ($86.9 million), or 0.65 riyals per share, in the three months ended March 31, compared with 251 million riyals, or 0.5 riyals per share, a year earlier, it said in a statement on the Saudi bourse website.
That was the smallest gain in quarterly profit since the firm started operations in 2005. First-quarter profit missed four forecasts of analysts in a Reuters net profit survey last month that ranged from SR335.1 million to SR529 million.
Revenue rose 23 per cent to SR2.31 billion - also the smallest rise since its inception - while operating profit grew 17 per cent to SR371 million.
Profit growth resulted from 'putting the emphasis on developing mobile phone services inside the kingdom, increasing the sales outlets and developing customer service,' Mobily said in the statement, without elaborating.
Mobily shares were unchanged on Wednesday, the last trading day, at SR60.5, 33 per cent below a SR91.4-price target set by HSBC in February.
HSBC had raised its target price from SR81.3, citing the contribution from broadband internet services, even though it said over all subscriber growth appeared slower than expected.
Mobily, which started operations in May 2005, competes with incumbent Saudi Telecom Company, the 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 Company (Zain), plans to start operations this year after selling shares to the public in the first quarter.
Mobily, which did not release subscriber numbers, claims a 39 per cent 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 probably exceeds 100 per cent. Saudi mobile phone operators may be generating SR55 billion in revenue in 2010, 38 per cent more than 2006, the kingdom's telecom ministry Mohammed bin Jamil Al Mullah said last year.
Mobily's stock has fallen almost 18 percent this year, underperforming the index which is down about 13 per cent. Emirates Telecommunications Corporation (Etisalat) owns 26.25 per cent in Mobily, having sold an 8.74 per cent stake in the firm at 55 riyals per share this year.-Reuters