Saudi Arabia’s Etihad Etisalat (Mobily), which restated 27 months of earnings earlier this year, said rising expenses were to blame as it swung to a third-quarter net loss yesterday despite slashing its capital expenditure.
Mobily, an affiliate of the United Arab Emirates’ Etisalat, made a net loss of 158mn riyals ($42.1mn) in the three months to September 30, it said in a bourse statement.
That compared with a profit of 129mn riyals in the prior-year period.
NCB Capital had forecast Mobily would make a quarterly profit of 245mn riyals.
Mobily, Saudi’s No 2 mobile operator, attributed its quarterly loss to a 235mn riyal increase in general and administrative expenses, plus an extra 56mn riyals in finance charges.
The company’s quarterly revenue was 3.69bn riyals, down 4.5% from a year earlier as interconnection income fell.
In February, the regulator slashed call interconnection charges. High fees benefit larger network operators, which have a bigger market share and fewer calls going “off-net” to other providers.
Mobily’s third-quarter capital expenditure was 789mn riyals, down from 1.85bn riyals. The company’s more parsimonious spending follows a series of shock earnings restatements.
In late July, Mobily altered its results for the 27 months to March 31, slashing total profits over the period by about 1.76bn riyals in its latest attempt to resolve an accounting scandal. It then reported a second-quarter loss of 900.9mn riyals.
The company had attributed its woes to the premature booking of revenue from wholesale broadband leases and mobile promotional campaigns and it has also made further changes to the way it accounts for some contracts and the depreciation of property and equipment.