The latest earnings from Saudi Arabia's Mobily reinforced analysts' bullish take on the Middle East's telecommunications industry, which is still regarded as having huge growth potential.
The kingdom's second-largest mobile operator reported a first-quarter net profit of 998 million Saudi riyals in the three months to the end of last month, up 40 per cent from 714m riyals in the same period last year, it said.
The company's shares have gained almost 23 per cent since hitting a 15-month low last month and yesterday the stock closed up 0.5 per cent to 52.75 riyals on the Saudi Tadawul All-Share Index.
With 20 "buys", just one "hold" and no "sells", analysts are still backing the stock.
Analysts at Al Mal Capital said Mobily "is our top growth pick in our GCC telecoms universe".
"It has the strongest position in the fastest-growing segment of the largest GCC telecoms market," the brokerage firm said in a note to clients yesterday.
Al Mal kept its "outperform" view on the stock with a price target of 67.68 riyals.
Mobily broke Saudi Telecom's GSM mobile operator monopoly when it was established in 2004 by Etisalat, the UAE's telecoms giant and Mobily's largest shareholder.
It attracted 3.8 million subscribers in its first year of operation, growing to more than 17 million subscribers by last year.
NCB Capital, based in Riyadh, was also optimistic on Mobily's "impressive top and bottom-line growth".
"We had been expecting strong growth, but largely through margin expansion; this was indeed the case, but also combined with better than expected top-line growth," said NCB Capital, whose analysts have an "overweight" rating and a target price of 66.9 riyals per share.
The company expects its data revenue to exceed 20 per cent of total revenue this year, up from 18 per cent last year and 14 per cent in 2009.
fhalime@thenational.ae
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Essentials
The flights
Return flights from Dubai to Windhoek, with a combination of Emirates and Air Namibia, cost from US$790 (Dh2,902) via Johannesburg.
The trip
A 10-day self-drive in Namibia staying at a combination of the safari camps mentioned – Okonjima AfriCat, Little Kulala, Desert Rhino/Damaraland, Ongava – costs from $7,000 (Dh25,711) per person, including car hire (Toyota 4x4 or similar), but excluding international flights, with The Luxury Safari Company.
When to go
The cooler winter months, from June to September, are best, especially for game viewing.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
