Mobily swings to fourth-quarter profit

24 January 2016

Full-year 2015 loss narrows for Saudi telecoms firm

Etihad Etisalat Company (Mobily), the Saudi phone company that restated financial results due to accounting errors last year, swung to a fourth-quarter profit in 2015.

The Riyadh-traded firm, a unit of the UAE’s biggest telecoms operator Emirates Telecommunications Corporation (Etisalat), reported a SR11m ($2.93m) profit for the three-month period ending 31 December 2015.

Mobily declared a loss of SR2.108bn for the same period a year earlier. Its 2015 full-year loss also narrowed to SR1.093bn, the company said in a stock exchange filing.

The absence of adjustments, which the company had to make in the fourth quarter of 2014, has helped it in posting a profit for the same period last year. Fourth-quarter revenues climbed to SR3.488m, compared with SR2.722m for the same period in 2014.

Despite signs of recovery, Mobily’s external auditors have expressed reservations on its ability to meet debt obligations.The company’s net current liabilities amounted to SR9.7bn at the end of 2015, an indication that its ability to meet obligations as they become due depends on its capability to enhance operational and cash flow performance.

At the end of last year, Mobily reached an agreement with some lenders to reset the financial covenants for certain long-term loans. It is at an advanced stage of negotiations with some lenders to obtain a reset of the financial covenants, according to the statement on the bourse.

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