UAE Etisalat says profit cut by $44 mln due to Mobily earnings debacle
The impact of this is to reduce Etisalat’s post-tax profit by 130 million dirhams for 2013 and by 32 million dirhams
Etisalat will cut its profits by 162 million dirhams ($44 million) because of the decision by Saudi Arabian affiliate Mobily to restate 18 months of earnings, the Abu Dhabi-based firm said on Wednesday.
The United Arab Emirates’ biggest telecommunications operator owns 27.5 percent of Mobily, which on Monday slashed its profits for 2013 and the first half of 2014 by a combined 1.43 billion riyals ($381.2 million), citing accounting errors.
The impact of this is to reduce Etisalat’s post-tax profit by 130 million dirhams for 2013 and by 32 million dirhams for the nine months to Sept. 30 this year. Etisalat will account for these reductions in its earnings statement for the fourth quarter of this year, it said in a bourse statement.
Etisalat previously announced a net profit of 7.08 billion dirhams in 2013, of which Mobily provided 1.18 billion dirhams - or 17 percent - prior to its earnings shock.
Serkan Okandan, Etisalat’s chief financial officer, was appointed deputy chief executive at Mobily in mid-October this year. He remains Etisalat’s finance head.
Mobily’s shares are down 18.5 percent in the two days since its earnings shock, which also included a 71 percent drop in third-quarter profit.
Etisalat’s shares, which can only be owned by UAE citizens and are closed to institutions and foreign investors, have fallen 0.9 percent over the same period.
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