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Thu 30 Oct 2014 02:57 PM

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Saudi's Mobily asks for temporary suspension of shares

Telecom operator says its audit committee is considering 'significant matters relating to its financial statements'

Saudi's Mobily asks for temporary suspension of shares

Saudi Arabia's Mobily asked for its shares to be suspended and postponed publication of its quarterly earnings on Thursday, seeking more time to review unspecified "significant matters" in its financial statements.

Mobily, 28 percent owned by United Arab Emirates' Etisalat and formally called Etihad Etisalat, had been expected to report its third-quarter results last Sunday or Monday.

It now plans to publish the results this coming Sunday, a spokesman for the firm said. He declined to comment further.

Mobily, Saudi Arabia's second-largest telecoms firm, has long been a market darling, its profits climbing in the decade since it first challenged Saudi Telecom's monopoly cumulating with record profits last year.

But delayed results and growing uncertainty over its management sent its shares more than 8 percent lower over three days this week to a 16-month low. Earlier this month, parent Etisalat's chief financial officer Serkan Okandan was appointed Mobily's deputy CEO.

Mobily said via Twitter on Thursday that long-standing chief executive Khalid al-Kaf had not resigned and had not failed to follow accounting standards.

Asked about a potential departure, Kaf told Reuters on Wednesday there was "nothing like that for the time being". He declined to comment further and could not be reached on Thursday.

Mobily asked for its shares to be suspended on Thursday morning, citing a meeting of its audit committee to consider "significant matters relating to its financial statements".

It later delayed results, explaining it had been unable to complete "required amendments" to the financial statements.

Analysts polled by Reuters on average forecast Mobily will report a third-quarter net profit of SR1.67 billion ($445 million), a slight drop from a year earlier.

Mobily began operations in 2005 and it turned profitable the following year. Its annual profits more than quadrupled from 2006 to 2009 to reach SR3 billion ($799.68 million) that year, according to Reuters data.

In 2013, Mobily made a record annual profit of SR6.68 billion, up 11 percent from a year earlier.

But this also represented its smallest year-on-year profit rise as market saturation and stiffer competition from STC and third entrant Zain Saudi crimped growth.

Etisalat received AED973.3 million ($265 million) in dividends from Mobily in 2013, according to the UAE company's annual report.

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