Etisalat Q2 profit hit by Mobily and forex losses

Abu Dhabi-listed Etisalat  reported a 40 per cent fall in second-quarter net profit on Tuesday that it blamed on its Saudi Arabia affiliate Mobily and foreign exchange losses.

Etisalat, which operates in about 19 countries across the Middle East, Africa and Asia, made a net profit of Dh1.5 billion ($408.4 million) in the three months to June 30, the company said in a statement.

The company did not provide a year-earlier figure, but its previous financial statements showed the company made a profit of Dh2.51 billion in the second quarter of 2014.

Analysts polled by Reuters had forecast the Gulf's No.2 telecoms operator by market value would post a quarterly profit of Dh2.16 billion.

The UAE telecom major said “decline in net profit is attributed to higher depreciation and amortisation charges, impact of Mobily’s additional provision for accounts receivables, higher net finance costs, incurring forex losses during the period against forex gains in the same period last year, and higher Federal Royalty charges.”

Saudi's Mobily, in which Etisalat owns a 27.5 per cent stake, has been embroiled in an accounting scandal that has led the kingdom's No.2 operator to restate much of its earnings from 2013 onwards.

In June, Etisalat warned Mobily's latest restatement would cut its 2015 net profit by Dh204 million.

The UAE firm generated second quarter revenue of Dh13.3 billion, up about 6 per cent from a year earlier. In the UAE, revenue in the second quarter grew year on year by 9% to Dh7.5 billion and 4% quarter over quarter.

The Board of Directors has approved an interim dividend distribution for the six months period ended 30 June 2015 at the rate of 40 fils per share representing an increase of 14 per cent year-on-year.

Interim dividend distribution of 40 fils per share will commence from 18 August 2015 to those shareholders registered in the Shareholders’ Register at the close of the business day on 9 August 2015.

Aggregate subscriber base reached 168 million subscribers. In the UAE, the active subscriber base grew to 11.3 million subscribers in the second quarter of 2015. 

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