Dubai: Etisalat will cut its profits by Dh162 million due to a year-and-a-half earnings restatements announced by Etihad Etisalat (Mobily) on Monday.

Saudi Arabia’s Mobily slashed its profits for 2013 and the first half of 2014, citing accounting errors, by a combined 1.43 billion riyals.

The UAE operator said on the Abu Dhabi bourse that the financial impact on Etisalat Group’s net profit after royalty will be Dh130 million for 2013 and Dh32 million for the year till September.

Etisalat owns 27.46 per cent and consequently accounts for Mobily’s results by applying the equity accounting method under the share of results of associates and joint ventures line in the consolidated statement of profit or loss.

Etisalat said that Mobily’s financial statements are not consolidated line by line with Etisalat Group’s financial statements as per international financial reporting standards.

Mobily contributed Dh1.18 billion to Etisalat’s Dh7.08 billion profit in 2013 and Dh469 million to Etisalat’s Dh6.75 billion profit for the nine months this year.

The Saudi telecom operator also posted a 71 per cent plunge in third-quarter profit.

The reason for the decrease in net income for the third quarter compared to the same quarter of last year is attributed to several factors, and the most important factor is the presence of non- recurring revenues for the wholesale and carrier services during the same period of last year.

Mobily reported a net income of 2.5 billion riyals during the quarter compared to 4.24 billion riyals during the same period last year, registering a fall of more than 41 per cent.

“Etisalat will be getting less money from Mobily now. It is more of a restatement of numbers and more on the accounting side,” Bhanu Chaddha, telecommunications research manager at International Data Corporation (IDC), told Gulf News.

He said that there will be no impact on the operational side. Operations will continue “interrupted” and business will be as usual.

“The impact of Mobily’s restatement on our financials is immaterial, and will be accounted for in the fourth-quarter results,” Etisalat said in its statement. Etisalat shares closed 0.87 per cent lower at Dh11.45 on Wednesday while Mobily shares closed 9.72 per cent down at 65 riyals, taking its losses to 18.5 per cent in two days since resuming trading.