Financial Results : Mobily’s net profit down 41% to SAR 2496m for the first nine months of 2014 and a net profit of SAR 472m for Q3

Mobily’s net profit down 41% to SAR 2496m for the first nine months of 2014 and a net profit of SAR 472m for Q3

30/09/2014 Argaam Exclusive

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Etihad Etisalat Company (Mobily), a second mobile operator in Saudi Arabia, reported a net profit of SAR 2496m for the nine months ended September 30,2014, a 41% decrease compared to the same period last year.

A net profit of SAR 472m was reported for Q3-2014.



Financials (M)

Item 9m 2013 9m 2014 Change‬
Revenues 14,015.55 11,281.45 (19.5 %)
Gross Income 8,617.44 6,248.34 (27.5 %)
Operating Income 4,303.58 601.22 (86.0 %)
Net Income 4,244.31 532.65 (87.5 %)
Average Shares 770.00 770.00 -
EPS (Riyals) 5.51 0.69 (87.5 %)

The Company attributed the decrease of the first nine months of 2014’s net profit compared to the same period last year to the presence of non-recurring revenue and profit of wholesale & carrier services in the same period of the previous year, in addition to the increase of provisions and higher depreciation expenses in the current period.

The Company attributed the decline of Q3-2014’s net profit compared to the same period last year to the presence of non-recurring revenue and profit of wholesale & carrier services in the same quarter of the previous year, in addition to the increase of provisions and higher depreciation expenses in the current quarter.

The increase of Q3-2014’s net profit compared to the previous period (Q2-2014) was attributed to the financial impact resulting from the cancellation of Etihad Atheeb right of use agreement which led to the cancellation of SAR 338.7 million from the net income of previous quarter, despite the increase of provisions and higher depreciation expenses in the current quarter.

 

External auditor’s report drew attention to:

It was stated in the chartered accountant report that: We draw attention to Note 14 to the accompanying interim consolidated financial statements, which outlines the impact of restatements of revenue and net income, in addition to retained earnings and related balances, in:

The consolidated financial statements for the year ended December 31, 2013 and the interim consolidated financial statements for the comparative period in 2013 and for the periods ended March 31, 2014 and June 30, 2014 as a result of an error in the timing of revenue recognition in respect of a promotional program, and

The interim consolidated financial statements for the period ended June 30, 2014 relating to the timing of revenue recognition in respect of leasing elements of the fiber-optic communication network due to a lack of readiness for use in full by the end user of the service.



Current Quarter Comparison (M)

Compared With The
Item Q3 2013 Q3 2014 Change‬
Revenues 4,883.46 3,859.86 (21.0 %)
Gross Income 3,292.03 2,182.85 (33.7 %)
Operating Income 1,675.24 127.01 (92.4 %)
Net Income 1,631.94 129.46 (92.1 %)
Average Shares 770.00 770.00 -
EPS (Riyals) 2.12 0.17 (92.1 %)


Financial results (Million)

Period Revenues Change Gross Income Change Operating Income Change
Q1 2005 - - - - (337.86) -
Q2 2005 58.46 - 3.54 - (363.19) -
Q3 2005 566.41 - 260.00 - (107.25) -
Q4 2005 1,036.87 - 430.96 - (43.61) -
Q1 2006 1,126.54 - 607.18 - 130.54 138.6 %
Q2 2006 1,450.06 2380.5 % 802.46 22581.2 % 237.34 165.3 %
Q3 2006 1,705.38 201.1 % 956.76 268.0 % 342.46 419.3 %
Q4 2006 1,901.26 83.4 % 1,155.65 168.2 % 445.19 1120.8 %
Q1 2007 1,876.72 66.6 % 987.29 62.6 % 370.92 184.1 %
Q2 2007 2,028.88 39.9 % 1,111.54 38.5 % 429.04 80.8 %
Q3 2007 2,124.14 24.6 % 1,175.69 22.9 % 450.37 31.5 %
Q4 2007 2,410.70 26.8 % 1,373.72 18.9 % 665.56 49.5 %
Q1 2008 2,307.79 23.0 % 1,223.60 23.9 % 433.91 17.0 %
Q2 2008 2,543.55 25.4 % 1,413.01 27.1 % 530.45 23.6 %
Q3 2008 2,833.73 33.4 % 1,566.76 33.3 % 650.78 44.5 %
Q4 2008 3,109.47 29.0 % 1,817.68 32.3 % 880.78 32.3 %
Q1 2009 2,810.46 21.8 % 1,616.66 32.1 % 533.50 23.0 %
Q2 2009 3,199.37 25.8 % 1,833.25 29.7 % 727.31 37.1 %
Q3 2009 3,511.17 23.9 % 1,982.11 26.5 % 861.69 32.4 %
Q4 2009 3,537.27 13.8 % 2,114.53 16.3 % 1,085.38 23.2 %
Q1 2010 3,581.38 27.4 % 1,827.12 13.0 % 762.94 43.0 %
Q2 2010 3,972.33 24.2 % 2,073.83 13.1 % 940.34 29.3 %
Q3 2010 3,988.50 13.6 % 2,309.86 16.5 % 1,186.77 37.7 %
Q4 2010 4,470.94 26.4 % 2,572.61 21.7 % 1,464.74 35.0 %
Q1 2011 4,484.30 25.2 % 2,289.13 25.3 % 1,053.67 38.1 %
Q2 2011 5,126.64 29.1 % 2,477.75 19.5 % 1,223.32 30.1 %
Q3 2011 4,639.69 16.3 % 2,472.28 7.0 % 1,274.05 7.4 %
Q4 2011 5,801.62 29.8 % 3,086.91 20.0 % 1,754.32 19.8 %
Q1 2012 5,008.63 11.7 % 2,613.09 14.2 % 1,253.50 19.0 %
Q2 2012 5,678.49 10.8 % 2,955.86 19.3 % 1,467.73 20.0 %
Q3 2012 6,183.15 33.3 % 2,986.06 20.8 % 1,569.10 23.2 %
Q4 2012 6,715.03 15.7 % 3,421.97 10.9 % 1,844.72 5.2 %
Q1 2013 5,593.04 11.7 % 2,693.80 3.1 % 1,327.05 5.9 %
Q2 2013 5,960.05 5.0 % 2,975.14 0.7 % 1,639.60 11.7 %
Q3 2013 4,883.46 (21.0 %) 3,292.03 10.2 % 1,675.24 6.8 %
Q4 2013 4,087.12 (39.1 %) 2,589.22 (24.3 %) 401.13 (78.3 %)
Q1 2014 3,853.06 (31.1 %) 2,163.70 (19.7 %) 420.73 (68.3 %)
Q2 2014 3,568.53 (40.1 %) 1,901.79 (36.1 %) 53.47 (96.7 %)
Q3 2014 3,859.86 (21.0 %) 2,182.85 (33.7 %) 127.01 (92.4 %)


Profit Performance (Million)

Period Net Income Change EPS(Riyal) Extraordinary Income/Expense Net Profit Before Unusual Items EPS Before XO Items
Q1 2005 (412.48) - (0.59) - (412.48) (0.59)
Q2 2005 (422.08) - (0.61) - (422.08) (0.61)
Q3 2005 (165.63) - (0.24) - (165.63) (0.24)
Q4 2005 (167.19) - (0.24) - (167.19) (0.24)
Q1 2006 37.49 109.1 % 0.05 - 37.49 0.05
Q2 2006 116.13 127.5 % 0.17 - 116.13 0.17
Q3 2006 216.85 230.9 % 0.31 - 216.85 0.31
Q4 2006 329.89 297.3 % 0.47 - 329.89 0.47
Q1 2007 250.61 568.5 % 0.36 - 250.61 0.36
Q2 2007 303.85 161.7 % 0.44 - 303.85 0.44
Q3 2007 310.62 43.2 % 0.45 - 310.62 0.45
Q4 2007 514.47 56.0 % 0.74 - 514.47 0.74
Q1 2008 326.01 30.1 % 0.47 - 326.01 0.47
Q2 2008 448.41 47.6 % 0.64 - 448.41 0.64
Q3 2008 539.43 73.7 % 0.77 - 539.43 0.77
Q4 2008 777.93 51.2 % 1.01 - 777.93 1.01
Q1 2009 480.16 47.3 % 0.62 - 480.16 0.62
Q2 2009 674.93 50.5 % 0.88 - 674.93 0.88
Q3 2009 806.85 49.6 % 1.05 - 806.85 1.05
Q4 2009 1,051.93 35.2 % 1.37 - 1,051.93 1.37
Q1 2010 714.06 48.7 % 0.93 - 714.06 0.93
Q2 2010 901.02 33.5 % 1.17 - 901.02 1.17
Q3 2010 1,137.55 41.0 % 1.48 - 1,137.55 1.48
Q4 2010 1,458.84 38.7 % 1.89 - 1,458.84 1.89
Q1 2011 998.23 39.8 % 1.30 - 998.23 1.30
Q2 2011 1,164.07 29.2 % 1.51 - 1,164.07 1.51
Q3 2011 1,223.77 7.6 % 1.59 - 1,223.77 1.59
Q4 2011 1,697.39 16.4 % 2.20 - 1,697.39 2.20
Q1 2012 1,207.45 21.0 % 1.57 - 1,207.45 1.57
Q2 2012 1,421.26 22.1 % 1.85 - 1,421.26 1.85
Q3 2012 1,511.41 23.5 % 1.96 - 1,511.41 1.96
Q4 2012 1,877.54 10.6 % 2.44 - 1,877.54 2.44
Q1 2013 1,339.64 10.9 % 1.74 - 1,339.64 1.74
Q2 2013 1,611.04 13.4 % 2.09 - 1,611.04 2.09
Q3 2013 1,631.94 8.0 % 2.12 - 1,631.94 2.12
Q4 2013 447.60 (76.2 %) 0.58 - 447.60 0.58
Q1 2014 310.69 (76.8 %) 0.40 - 310.69 0.40
Q2 2014 92.50 (94.3 %) 0.12 - 92.50 0.12
Q3 2014 129.46 (92.1 %) 0.17 - 129.46 0.17

Profitability

Period Gross Margin OIBDA Margin Net Margin Before Unusual Items
Q1 2005 - - -
Q2 2005 - - -
Q3 2005 - - -
Q4 2005 41.79 % (6.79 %) (70.25 %)
Q1 2006 46.68 % 14.82 % (25.73 %)
Q2 2006 50.25 % 23.95 % (4.29 %)
Q3 2006 52.59 % 27.49 % 3.82 %
Q4 2006 56.96 % 32.35 % 11.33 %
Q1 2007 56.28 % 32.91 % 13.18 %
Q2 2007 56.06 % 33.32 % 14.66 %
Q3 2007 55.86 % 33.53 % 15.07 %
Q4 2007 55.07 % 34.91 % 16.34 %
Q1 2008 55.06 % 34.49 % 16.40 %
Q2 2008 55.25 % 34.50 % 17.04 %
Q3 2008 55.24 % 34.64 % 18.11 %
Q4 2008 55.78 % 35.15 % 19.38 %
Q1 2009 56.78 % 35.20 % 19.88 %
Q2 2009 57.18 % 35.61 % 20.68 %
Q3 2009 57.40 % 36.11 % 21.69 %
Q4 2009 57.79 % 37.04 % 23.08 %
Q1 2010 56.09 % 36.94 % 23.48 %
Q2 2010 54.77 % 36.75 % 23.79 %
Q3 2010 55.21 % 38.04 % 25.23 %
Q4 2010 54.85 % 38.50 % 26.30 %
Q1 2011 54.65 % 38.01 % 26.58 %
Q2 2011 53.40 % 38.37 % 26.33 %
Q3 2011 52.41 % 37.91 % 25.88 %
Q4 2011 51.50 % 37.17 % 25.35 %
Q1 2012 51.76 % 38.00 % 25.72 %
Q2 2012 52.67 % 37.71 % 26.27 %
Q3 2012 51.35 % 36.85 % 25.75 %
Q4 2012 50.78 % 36.18 % 25.51 %
Q1 2013 49.89 % 35.84 % 25.44 %
Q2 2013 49.39 % 36.50 % 25.93 %
Q3 2013 53.49 % 39.23 % 27.90 %
Q4 2013 56.28 % 38.02 % 24.51 %
Q1 2014 58.67 % 37.38 % 21.30 %
Q2 2014 60.68 % 35.19 % 15.15 %
Q3 2014 57.50 % 28.75 % 6.38 %


Per Share Data (Riyal)

Compared With The
Period Shares Outstanding (M) EPS (Riyal) Adjusted EPS (Riyal) Book Value (BV)
Q1 2005 696.67 - - 6.58
Q2 2005 696.67 - - 5.98
Q3 2005 696.67 - - 5.74
Q4 2005 696.67 (1.68) (1.68) 5.50
Q1 2006 696.67 (1.03) (1.03) 5.56
Q2 2006 696.67 (0.26) (0.26) 5.72
Q3 2006 696.67 0.29 0.29 6.03
Q4 2006 696.67 1.01 1.01 6.51
Q1 2007 696.67 1.31 1.31 6.87
Q2 2007 696.67 1.58 1.58 7.30
Q3 2007 696.67 1.72 1.72 7.75
Q4 2007 696.67 1.98 1.98 8.49
Q1 2008 696.67 2.09 2.09 8.60
Q2 2008 696.67 2.30 2.30 9.24
Q3 2008 696.67 2.62 2.62 10.01
Q4 2008 770.00 2.72 2.72 12.67
Q1 2009 770.00 2.92 2.92 12.61
Q2 2009 770.00 3.21 3.21 13.49
Q3 2009 770.00 3.56 3.56 14.53
Q4 2009 770.00 3.91 3.91 15.90
Q1 2010 770.00 4.22 4.22 15.69
Q2 2010 770.00 4.51 4.51 16.86
Q3 2010 770.00 4.94 4.94 18.34
Q4 2010 770.00 5.47 5.47 20.23
Q1 2011 770.00 5.84 5.84 19.71
Q2 2011 770.00 6.18 6.18 21.22
Q3 2011 770.00 6.29 6.29 21.68
Q4 2011 770.00 6.60 6.60 23.88
Q1 2012 770.00 6.87 6.87 23.63
Q2 2012 770.00 7.21 7.21 24.57
Q3 2012 770.00 7.58 7.58 25.62
Q4 2012 770.00 7.82 7.82 27.15
Q1 2013 770.00 7.99 7.99 27.74
Q2 2013 770.00 8.23 8.23 28.68
Q3 2013 770.00 8.39 8.39 29.16
Q4 2013 770.00 6.53 6.53 27.42
Q1 2014 770.00 5.20 5.20 26.58
Q2 2014 770.00 3.22 3.22 25.45
Q3 2014 770.00 1.27 1.27 24.36

Multiple Ratios (End of Period Price)

Compared With The
Period P/E Adjusted P/E Price/book
Q1 2005 - - 11.84
Q2 2005 - - 17.14
Q3 2005 - - 17.15
Q4 2005 NEG NEG 20.19
Q1 2006 NEG NEG 17.54
Q2 2006 NEG NEG 12.06
Q3 2006 More than 100 More than 100 9.83
Q4 2006 41.03 41.03 6.34
Q1 2007 29.65 29.65 5.66
Q2 2007 24.09 24.09 5.21
Q3 2007 30.76 30.76 6.81
Q4 2007 29.44 29.44 6.87
Q1 2008 22.13 22.13 5.38
Q2 2008 18.49 18.49 4.59
Q3 2008 13.67 13.67 3.58
Q4 2008 10.37 10.37 2.22
Q1 2009 10.75 10.75 2.49
Q2 2009 9.94 9.94 2.37
Q3 2009 10.63 10.63 2.60
Q4 2009 10.08 10.08 2.48
Q1 2010 10.83 10.83 2.91
Q2 2010 9.65 9.65 2.58
Q3 2010 9.80 9.80 2.64
Q4 2010 9.18 9.18 2.48
Q1 2011 8.02 8.02 2.38
Q2 2011 7.72 7.72 2.25
Q3 2011 7.66 7.66 2.22
Q4 2011 7.23 7.23 2.00
Q1 2012 8.66 8.66 2.52
Q2 2012 7.92 7.92 2.32
Q3 2012 8.12 8.12 2.40
Q4 2012 8.84 8.84 2.54
Q1 2013 10.24 10.24 2.95
Q2 2013 9.84 9.84 2.82
Q3 2013 10.10 10.10 2.91
Q4 2013 13.09 13.09 3.12
Q1 2014 17.85 17.85 3.49
Q2 2014 25.37 25.37 3.21
Q3 2014 70.85 70.85 3.70

Current
Market Cap (M Riyal) 41,118.00
Enterprise Value (EV) (M) 44,652.68
Shares Outstanding ((M)) 770.00
EPS ( Riyal) (TTM) 3.73
Book Value (BV) ( Riyal) 23.24
Par Value ( Riyal) 10.00
Adjusted P/E (Last12) 14.71
P/E (TTM) 14.31
Price/book 2.30
Return on Average Assets (%) (TTM) 7.4
Return on Average Equity (%) (TTM) 16.5

Share Price

53.40
(1.10) (2.02 %)

Etihad Etisalat Co. (ETIHAD ETISALAT)


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