Etisalat to take Dh616m hit from Mobily accounting troubles

Telecom operator Etisalat will take a hit of Dh616 million before federal royalty, or tax paid to the government, after its Saudi unit, Mobily, said that accounting changes will increase its losses for last year.

Etisalat, which opened its stock to foreign investors last week, said that its 2015 net profit will also be affected by around Dh204m after Mobily increased its provisions related to receivables due from another operator that will be recognised in the second quarter, Etisalat said in an emailed statement on Sunday.

“We are currently in discussion with our external auditors on this matter,” the company said.

Its shares were unchanged in Abu Dhabi at 12.30pm UAE time on Sunday.

Etisalat’s 2014 revenues were Dh48.8 billion, up 26 per cent from a year earlier.

Mobily, also known as Etihad Etisalat, is Saudi Arabia’s second-biggest mobile phone operator, has been under investigation by the kingdom’s Capital Market Authority since last year because of alleged accounting irregularities that led to the company restating 18 months of earnings.

Mobily in November suspended its chief executive, Khalid Al Kaf, and said Serkan Okandan, the deputy chief executive, would be running the company’s operations.

In April, Etisalat posted a first quarter net profit increase of 8 per cent year-on-year to Dh2.2bn.

The Abu Dhabi firm operates in 19 markets in the Middle East, Africa and Asia, including Egypt, Morocco, Sri Lanka, and Afghanistan.

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