Etisalat’s net profit falls 40%

Thursday, 30 July 2015 00:00 - - {{hitsCtrl.values.hits}}

Dubai (Reuters): Abu Dhabi-listed telecoms firm Etisalat missed analyst estimates by reporting a 40% fall in second-quarter net profit on Tuesday that it blamed on its troubled 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 1.5 billion dirhams ($ 408.4 million) in the three months to 30 June, the company said in a statement.

It did not provide a year-earlier figure, but its previous financial statement showed Etisalat made a profit of 2.51 billion dirhams in the second quarter of 2014.

Analysts polled by Reuters had forecast the Gulf’s No.2 telecom operator by market value would post a quarterly profit of 2.16 billion dirhams.

Saudi’s Mobily, in which Etisalat owns a 27.5% 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 own 2015 net profit by 204 million dirhams.

Etisalat said its quarterly profit slump was due to Mobily, higher depreciation and amortisation charges, bigger finance costs and foreign exchange losses, but did not provide further details or publish its second-quarter financial report.

The United Arab Emirates’ former monopoly generated second-quarter revenue of 13.3 billion dirhams, up 6% from a year earlier.

It has approved paying a half-year dividend of 0.4 dirhams per share, up 14% on the same period of 2014.

Etisalat’s bought a 53% stake in Maroc Telecom for 4.14 billion euros in May 2014, boosting the UAE firm’s foreign revenues.

Maroc Telecom has operations in Gabon, Mauritania, Burkina Faso and Mali and this year also acquired Etisalat’s subsidiaries in six African countries. Maroc Telecom reported a second-quarter net profit of 1.51 billion Moroccan dirhams ($ 154.86 million), down from 1.61 billion Moroccan dirhams a year earlier, according to Reuters calculations.