Saudi telco Mobily reports 8.6% profit rise

Kingdom’s No.2 telecom operator beats analysts’ forecasts with fourth-quarter results

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Etihad Etisalat (Mobily), Saudi Arabia’s No.2 telecom operator, beat analysts’ forecasts with an 8.6 percent rise in fourth-quarter net profit on Wednesday as revenue from corporate customers increased along with data income.

Mobily, an affiliate of the United Arab Emirates’ Etisalat, made a fourth-quarter net profit of 2.04 billion riyals, up from 1.88 billion riyals in the prior-year period, according to a bourse statement.

Analysts polled by Reuters on average forecast Mobily, which competes with the Gulf’s No.1 operator Saudi Telecom Co and Zain Saudi, would make a quarterly profit of 1.87 billion riyals.

Mobily’s revenue for the three months to Dec. 31 was 7.2 billion riyals, up from 6.76 billion riyals from the prior-year
period. It proposed a dividend of 1.25 riyals per share for the fourth quarter.

The firm’s full-year profit for 2013 was 6.68 billion riyals, up from 6.02 billion riyals a year earlier.

Annual revenue rose 7 percent to 25.2 billion riyals.

The company said more income from data and business clients were the reason for the quarterly and annual profit increases. Business sector revenue rose 23 percent.

Saudi operators have focused on data and combined services to help offset waning demand for conventional call and text services, which are under pressure due to the popularity of substitute applications such as Internet-based phone calls and instant messaging.

Data accounted for 28 percent of Mobily’s total revenue in 2013. It did not provide a comparative percentage for the previous year, but said revenue from its mobile and fixed broadband networks increased and forecast data would account for more than 32 percent of total revenue this year.

Mobily said more than 530,000 residential units were now connected to its fibre network and it aims to double this in 2014.

The firm plans to buy a stake in loss-making fixed line operator Etihad Atheeb, a move seen as helping it offer service bundles that include voice, data and television services.

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