Riyadh: Saudi Arabia's Etihad Etisalat Co, or Mobily, yesterday posted a 16 per cent rise in fourth-quarter net profit, beating most analyst expectations, on higher data revenue and a rise in mobile broadband subscribers.
In a statement posted on the Saudi bourse website, Saudi Arabia's number two telecom firm by market capitalisation said net profit reached 1.69 billion Saudi riyals (Dh1.65 billion), compared with 1.46 billion riyals a year earlier.
Bahrain-based Sico had expected Mobily to record a net profit of 1.34 billion riyals, while analysts at Cairo-based Beltone Fin-ancial had forecast 1.42 billion riyals.
Earnings per share for the year totalled 7.26 riyals, up from 6.02 riyals a year earlier, while fourth-quarter operating income rose 20 per cent to 1.75 billion riyals, Mobily said. Full-year net income stood at 5.1 billion riyals, compared with 4.2 billion riyals.
The telco's Chairman, Abdul Aziz Saleh Al Saghyir, said the rise in net profit was due to a 59 per cent year-on-year increase in data revenues-fixed and mobile-representing 22 per cent of total revenues, up from 18 per cent in 2010.
The number of mobile broadband subscribers reached 8.7 million at the end of 2011, compared with 2.3 million subscribers in the unlimited, 5GB, and 1GB bundles for the previous year, he added.
Margin of earnings
Total revenue for 2011 hit 20.1 billion riyals versus 16.01 billion riyals a year ago, while the margin for earnings before interest, taxes, depreciation and amortisation, or Ebitda, rose 21 per cent to 7.5 billion riyals. Ebitda margin rose to 40 per cent versus 44 per cent in the second quarter.
Mobily said its board of directors recommended two riyals per share, or 1.4 billion riyals, as a dividend for the second half of 2011. It previously paid 875 million riyals as an interim dividend for the first six months of last year.
Major telecoms companies in the Middle East and North Africa have battled to increase earnings as intense domestic competition continues to erode voice revenue and operators grapple with tapping into the potential of mobile broadband and data.
Mobily, which is 27.4 per cent owned by Emirates Telecommunications Corp, is employing networks that run on long-term evolution technology, which allows high-speed data transfers, to cope with rampant growth in data traffic from smartphones.
The service, which was launched mid-September, is expected to cover more than 32 cities and governorates.
Mobily said its focus in the coming period will be on increasing accessibility to the internet through both fixed and mobile broadband networks, and expects the kingdom to achieve the highest growth rate in terms of data transfer in the Middle East.