Data revenues drive Mobily net profit to 11% increase

Etihad Etisalat (Mobily) has announced an 11 percent rise in first-quarter net profit.
Mobily made a first-quarter net profit of SR 1.340 billion, up from SR 1.207 billion in the prior-year period.
The board of directors is likely to meet today (April 21) to decide interim dividend distribution for Q1 and payment to shareholders.
Announcing its preliminary consolidated financial results for the three-month period ended March 31, 2013, Mobily said the increase in its net profit was mainly due to growth in data revenues and maintaining the trend of increased revenues from the business sector.
Although Q1 net profit is less than in Q4 2012, this is a standard seasonal deviation attributable to the final quarter coinciding with the Haj season and year-end events.
A reasonable comparison is with the results for Q1 2012 (Q1 2013 revenues were SR 5,628 million compared to SR 5,009 million for the corresponding quarter, an increase of 12 percent).
This stems from the growth in sales of smart phones and the increase in data revenues, which accounted for 30 percent of turnover for the period compared to 23 percent in Q1 2012; besides, business sector revenues increased by 43 percent compared to the same period of 2012, Mobily stated.
Mobily Chairman Abdul Aziz Al-Saghyir said the growth of the company will continue to come from the business and data sectors, as the company has a clear vision of these needs in the Kingdom, backed by ownership of the largest 3G and 4G networks in the Middle East and North Africa (MENA) region.
The growth of the Saudi telecoms sector will be strongly supported by the positive nature of the Kingdom’s economy and increased governmental spending.
Business and data sectors are expected to contribute 12 percent and 30 percent respectively to 2013 total revenues, he said.
Mobily has signed a strategic partnership agreement with (Virtustream) to provide cloud computing services and create the necessary infrastructure to support the business sector based on international standards of efficiency and reliability.
The company will also provide all adjacent services.Mobily has also signed an agreement with (Jasper), the international provider of M2M solutions, enabling increased efficiency of wireless connectivity between different systems and offering services in smart navigation and remote control systems.
Another contract has been signed to build, connect, and operate integrated telecommunication services for the (Burj Rafal Community) in Riyadh, which includes residential apartments, a hotel, and other amenities.
The volume of data being transmitted on Mobily’s 4G network, which covers more than 78 percent of inhabited areas in Saudi Arabia, has now overtaken the advanced 3G network.
Average daily volume on the 4G network registered 400 terabytes compared to 350 terabytes on the advanced 3G network, underlining Mobily’s execution capability and its exceptional success in launching 4G services in the Kingdom.
Transmitting such huge daily volumes not only requires a solid infrastructure, but also the professional competences, experience, and skilled policy making in choosing the right technologies.
Al-Saghyir said Mobily has adopted innovation as a key theme and driver for growth, working to a clearly defined vision and with the ability to astutely identify investment opportunities.
Mobily is one of the few companies in the global telecoms sector that enjoys such flexibility in increasing capital expenditure while still raising its cash dividend distribution to shareholders.
This is due to its strong financial position, very positive cash flows, and low levels of debt.
The following are Mobily’s consolidated Q1 financial results:
Net profit is SR 1,340 million compared to SR 1,207 million for the corresponding period of 2012, an increase of 11 percent, and SR 1,878 million for the previous quarter, a decrease of 29 percent.
Gross profit was SR 2,729 million compared to SR 2,613 million for the corresponding quarter of 2012, an increase of 4 percent.
Operating profit was SR 1,362 million, compared to SR 1,254 million for the corresponding quarter, an increase of 9 percent.
Earning per share was SR 1.74 compared to SR 1.57 for the corresponding quarter. Earning per share from net profit for the period is calculated based on the weighted average for the outstanding number of ordinary shares amounting to 770 million shares as at March 31, 2013 and 2012.
The increase in net profit was mainly due to growth in data revenues and maintaining the trend of increased revenues from the business sector.
Although Q1 net profit is less than in Q4 2012, this is a standard seasonal deviation attributable to the final quarter coinciding with the Haj season and year-end events.
A reasonable comparison is with the results for Q1 2012 (Q1 2013 revenues were SR 5,628 million compared to SR 5,009 million for the corresponding quarter, an increase of 12 percent).
This stems from the growth in sales of smart phones and the increase in data revenues, which accounted for 30 percent of turnover for the period compared to 23 percent in Q1 2012; besides, business sector revenues increased by 43 percent compared to the same period of 2012.
EBITDA amounted to SR 1,975 million compared to SR 1,811 million in Q1 2012, an increase of SR 164 million. Despite lower margins on sales of smart phones, the EBITDA margin for Q1 was 35 percent (Q1 2012: 36 percent).