Abu Dhabi-listed telco blames troubled Saudi affiliate Mobily and foreign exchange losses for profit decline
Abu Dhabi-listed telecoms firm Etisalat missed analyst estimates by reporting a 40 percent fall in second-quarter net profit on Tuesday that it blamed on its troubled Saudi Arabia affiliate Mobily and foreign exchange losses.
Etisalat, which operates in about 19 countries across the Middle East, Africa and Asia, made a net profit of 1.5 billion dirhams ($408.4 million) in the three months to June 30, the company said in a statement.
It did not provide a year-earlier figure, but its previous financial statement showed Etisalat made a profit of 2.51 billion dirhams in the second quarter of 2014.
Analysts polled by Reuters had forecast the Gulf's No.2 telecom operator by market value would post a quarterly profit of 2.16 billion dirhams.
Saudi's Mobily, in which Etisalat owns a 27.5 percent stake, has been embroiled in an accounting scandal that has led the kingdom's No.2 operator to restate much of its earnings from 2013 onwards.
In June, Etisalat warned Mobily's latest restatement would cut its own 2015 net profit by 204 million dirhams.
Etisalat said its quarterly profit slump was due to Mobily, higher depreciation and amortisation charges, bigger finance costs and foreign exchange losses, but did not provide further details or publish its second-quarter financial report.
The United Arab Emirates' former monopoly generated second-quarter revenue of 13.3 billion dirhams, up 6 percent from a year earlier.
It has approved paying a half-year dividend of 0.4 dirhams per share, up 14 percent on the same period of 2014.
Etisalat's bought a 53 percent stake in Maroc Telecom for 4.14 billion euros in May 2014, boosting the UAE firm's foreign revenues.
Maroc Telecom has operations in Gabon, Mauritania, Burkina Faso and Mali and this year also acquired Etisalat's subsidiaries in six African countries. Maroc Telecom reported a second-quarter net profit of 1.51 billion Moroccan dirhams ($154.86 million), down from 1.61 billion Moroccan dirhams a year earlier, according to Reuters calculations.For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.