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Mobily swings to 2014 loss; trading in shares suspended

RIYADH, 2 days ago

Saudi Arabia’s Mobily on Wednesday said it swung to a full-year loss in 2014 after the telecommunications operator announced its audited results, also revealing it had breached loan covenants with various lenders.

Mobily — formally called Etihad Etisalat — made a loss of SR913 million ($243.4 million) in 2014 after it took an additional charge of SR1.13 billion, it said in a statement to Riyadh’s bourse.

Saudi Arabia’s Capital Market Authority suspended trading in Mobily shares after the firm revised its 2014 financials. It said the shares would be suspended until Mobily discloses detailed reasons for the revisions and all other relevant developments.

Earlier on Wednesday, Mobily announced the departure of its long-serving chief executive Khalid Al-Kaf.

In January, the company announced its unaudited 2014 results, which showed it made a full-year profit of SR219.8 million that included a fourth-quarter loss of SR2.28 billion.

The revised full-year earnings is another setback for Mobily, whose problems stem from what it describes as accounting errors relating to the booking of revenue from wholesale broadband leases and mobile promotional campaigns.

These mistakes also led it to cut its profits for 2013 and the first half of 2014 by a combined SR1.43 billion in November.

Consequently, the company — 27.5 per cent owned by Abu Dhabi-listed Etisalat — has breached covenants on long-term loans with various lenders, it said in Wednesday’s statement without elaborating what terms had been violated.

Mobily said it expects negotiations with lenders to amend the loan covenants will be successfully concluded in the second quarter of 2015.

It did not specify whether its earnings for the fourth-quarter of 2014 had also been revised in the audited results. – Reuters
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