Etisalat will cut its profit by Dh162 million because of the decision by its Saudi Arabian associate, Mobily, to restate 18 months of earnings, the UAE telecoms operator said yesterday.
Etisalat owns 27.46 per cent of Mobily – also known as Etihad Etisalat – which on Monday slashed its profit for last year and the first half of this year by a combined 1.43 billion Saudi riyals (Dh1.4bn), citing accounting errors.
The effect of this is to reduce Etisalat's post-tax profit by Dh130m for last year and by Dh32m for the nine months to September 30 this year. Etisalat will account for these reductions in its earnings statement for the fourth quarter of this year, it said.
Etisalat previously announced a net profit of Dh7.08bn last year, of which Mobily provided Dh1.17bn – or 17 per cent – before its earnings shock.
Serkan Okandan, Etisalat’s chief financial officer, was appointed deputy chief executive at Mobily in the middle of last month. He still remains Etisalat’s finance head.
Mobily’s shares are down 18.5 per cent in the two days since its earnings shock, which also included a 71 per cent drop in third-quarter profit.
Saudi Arabia’s Capital Market Authority has launched an investigation into the matter.
Etisalat’s shares, which can only be owned by UAE citizens and are closed to institutions and foreign investors, have fallen 0.9 per cent over the same period.
They were down less than 1 per cent yesterday as the overall Abu Dhabi market closed lower.
Etisalat last month reported a 22 per cent increase in third-quarter net profit after royalty to Dh2.2bn as it added subscribers on the back of the inclusion of its Maroc Telecom consolidation.
* with Reuters
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