Mobily’s Q3 loss was more than expected, says Riyad Cap

Etihad Etisalat Co.’s (Mobily) third quarter net loss of SAR 168 million (6 percent YoY rise) exceeded the SAR 34 million net loss estimate set by Riyad Capital, the firm said in an earning review.

Mobily seems to have suffered more than the competition from the loss of subscribers due to biometric fingerprint verification, it said. In addition, the telco was unable to capitalize on a data driven market.

“After three consecutive quarters of profits, a net loss in Q3 is disappointing but was anticipated given market changes impacting Mobily more severely. Understandably, the market took it negatively and the stock fell –6 percent the following day,” the report said.

Although the company has taken steps to optimize expenses, it was unable to prevent an operating loss of SAR 137 million as revenue was not supportive.

“With the ongoing market and resultant revenue mix changes, we believe the company would do well to revisit its strategy in order to be able to rebuild its customer base and stabilize margins,” it said.

Riyad Capital maintained a “neutral” rating on Mobily and kept the target price at SAR 29 per share.