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Etihad Etisalat Co. announces the interim financial results for the period ending on 30-09-2019 (Nine Months)

Element ListCurrent QuarterSimilar quarter for previous year%ChangePrevious Quarter% Change
Sales/Revenue 3,4042,97614.3813,3312.191
Gross Profit (Loss) 2,0151,75814.6181,9563.016
Operational Profit (Loss) 262108142.5922610.383
Net Profit (Loss) after Zakat and Tax 51.06-30.92-37.7735.186
Total Comprehensive Income 40.79-36.69-16.21151.634
All figures are in (Millions) Saudi Arabia, Riyals
Element ListCurrent PeriodSimilar period for previous year%Change
Sales/Revenue 9,9368,70314.167
Gross Profit (Loss) 5,8105,19611.816
Operational Profit (Loss) 801336138.392
Net Profit (Loss) after Zakat and Tax 156-203-
Total Comprehensive Income 104.38-232.92-
Total Share Holders Equity (after Deducting Minority Equity) 13,87413,8070.485
Profit (Loss) per Share 0.2-0.26
All figures are in (Millions) Saudi Arabia, Riyals
Element ListExplanation
Increase (Decrease) in Net Profit for Current Quarter Compared to the Same Quarter of the Previous Year is Attributed to Mobily continued delivering positive net results for the fourth consecutive quarter, as Q3 2019 net result reached SAR 51 million compared to a loss of SAR 31 million in Q3 2018. This is mainly due to the following:

Revenues

Mobily continued to grow its revenues for the eighth consecutive quarter. Q3 2019 revenues amounted to SAR 3,404 million versus SAR 2,976 million in Q3 2018, or a YoY growth of 14.4%. This is mainly attributed to the continued growth of the subscribers base, the growth of business revenues and wholesale units and the growth of FTTH active base.

Gross profit

Q3 2019 gross profit amounted to SAR 2,015 million versus SAR 1,758 million in Q3 2018, a growth of 14.6%. This is mainly attributed to the improvement in revenues that absorbed the impact of the new government royalties mechanism previously announced, and the implementation of IFRS16.

EBITDA

Mobily succeeded in increasing its EBITDA to reach SAR 1,277 million in Q3 2019 versus SAR 1,087 million in Q3 2018, or an increase of 17.4%. The EBITDA increase is attributed to the growth of revenues, the improvement in operational performance and the implementation of IFRS16.

Without IFRS 16 impact, EBITDA would have amounted to SAR 1,113 million, or an increase of 2.4% compared to Q3 2018.

EBITDA margin was stable at 38% for Q3 2019.

Operational profit (EBIT)

Q3 2019 operational profit amounted to SAR 262 million compared to an operational profit of SAR 108 million in Q3 2018, an increase of 142.7% reflecting the improvement in EBITDA.

Without IFRS 16 impact, EBIT would have amounted to SAR 237 million; representing an increase of 119% compared to Q3 2018.

Financial charges and Zakat

Financial charges for Q3 2019 amounted to SAR 206 million similar to the finance charges in Q3 2018, despite the negative impact of the implementation of IFRS 16.

Without IFRS 16 impact, the financial charges would have amounted to SAR 171 million representing a decrease of 17% compared to Q3 2018.

Zakat expenses amounted to SAR 16 million compared to zakat expense reversal of SAR 55 million in Q3 2018.

Increase (Decrease) in Net Profit for Current Quarter Compared to the Previous Quarter is Attributed to Mobily continued delivering positive net results for the fourth consecutive quarter, as Q3 2019 net result reached SAR 51 million compared to a net income of SAR 38 million in Q2 2019. This is mainly due to the following:

Revenues

Mobily continued to grow its revenues for the eighth consecutive quarter, as Q3 2019 revenues increased by 2.2% to reach SAR 3,404 million versus SAR 3,331 million in Q2 2019. This is mainly attributed to the continued growth of subscribers base, the growth in business unit and FTTH revenues.

Gross profit

Q3 2019 gross profit amounted to SAR 2,015 million versus SAR 1,956 million in Q2 2019, a growth of 3%. This increase is mainly attributed to the improvement in revenues.

EBITDA

Q3 2019 EBITDA amounted to SAR 1,277 million versus SAR 1,221 million in Q2 2019, representing an increase of 4.5%, this is mainly attributed to the improvement in revenues and the company efficiency in managing its operations.

EBITDA margin increased to 38% in Q3 2019 versus 37% in Q2 2019.

Operational profit (EBIT)

Operational profit amounted to SAR 262 million versus SAR 261 million in Q2 2019.

Financial charges and Zakat

Financial charges for Q3 2019 decreased to reach SAR 206 million versus SAR 217 million in Q2 2019; representing an increase of 5.1% due to the decrease in SIBOR

Increase (Decrease) in Net Profit for Current Period Compared to the Similar Period of the Previous Year is Attributed to Mobily succeeded in achieving a positive net profit for the nine months of 2019, reaching SAR 156 million compared to net loss amounted to SAR 203 million in nine months of 2018. This is mainly due to the following:

Revenues

Mobily succeeded in growing its revenues where nine months of 2019 revenues increased by 14% to reach SAR 9,936 million versus SAR 8,703 million in nine months of 2018. This is mainly attributed to the growth and improvement of subscribers base, the growth of business and wholesale units revenues and the growth of FTTH active base.

Gross profit

Gross profit for the nine months of 2019 amounted to SAR 5,810 million versus SAR 5,196 million in nine months of 2018, a growth of 11.8%. This is mainly attributed to the improvement in revenues that absorbed the impact of the new government royalties mechanism previously announced, and the implementation of IFRS16.

EBITDA

Mobily succeeded in increasing its EBITDA to reach SAR 3,770 million in nine months of 2019 versus SAR 3,190 million in nine months of 2018, or an increase of 18.2%. The increase in EBITDA is mainly attributed to the growth of revenues, the improvement in operational performance and the implementation of IFRS16.

Without IFRS 16 impact, the EBITDA would have amounted to SAR 3,307 million, or an increase of 4% compared to nine months of 2018.

EBITDA margin reached 38% for nine months of 2019 versus 37% for nine months of 2018.

Operational profit (EBIT)

Nine months of 2019 operational profit amounted to SAR 801 million compared to an operational profit of SAR 336 million in nine months of 2018, or an increase of 138.3%; reflecting the improvement in EBITDA.

Without IFRS 16 impact, EBIT would have amounted to SAR 717 million; representing an increase of 113% compared to nine months of 2018.

Financial charges and Zakat

Financial charges for nine months of 2019 increased to reach SAR 635 million compared to SAR 585 million in nine months of 2018; representing an increase of 8.5% that is mainly due to IFRS 16 implementation.

Without IFRS 16 impact, the financial charges would have amounted to SAR 535 million; representing a decrease of 9% compared to nine months of 2018.

Zakat expenses for the current period amounted to SAR 40 million compared to zakat expense reversal of SAR 24 million in nine months of 2018.

Basis of the External Auditor's Opinion Unmodified opinion
Reclassification of Comparison Items Certain figures for the comparative period have been reclassified to conform to the current period presentation.
Additional Information Net debt:

Mobily net debt amounted to SAR 10,877 million at the end of Q3 2019 versus SAR 11,645 million at the end of Q3 2018, a decrease of SAR 768 million.

CAPEX:

Capex in nine months of 2019 decreased to reach SAR 1,464 million versus SAR 2,113 million in nine months of 2018 due to the capitalization of spectrum in Q1 2018 with an amount of SAR 310 million.

Operational Cash Flow:

Mobily substantially improved its nine months of 2019 operational cash flow (EBITDA-CAPEX) to reach SAR 2,307 million versus SAR 1,077 million in the nine months of 2018; representing an increase of 114%.

Without IFRS 16 impact, operational cash flow would have amounted to SAR 1,841 million; representing an increase of 71% compared to the nine months of 2018.

There are no accumulated losses at the end of Q3 2019.

The Capital Market Authority and the Saudi Stock Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.

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