Albilad Capital has rated Etihad Etisalat (Mobily) “overweight’’ with share target price of SAR 28 as the company is expected to swing to profit in 2016.
Mobily’s ability to turn to profit will mainly depend on its efforts to cut expenses as revenues stabilize, it added.
Saudi Arabia’s second-biggest telecom operator’s Q415 net profit beat Albilad’s estimates.
Mobily reported a net profit of SAR 11 million in Q4 compared to a net loss of SAR 2.1 billion in the same period of 2014, thanks to lower operating expenses. The company also said it offset negative impact from non-recurring adjustments that led to a SAR 1.6 million cut in gross profit in Q414.
For the full fiscal year, it reduced net losses by 30.7 percent year-on-year to SAR 1.1 billion, mainly due to a significant rise in earnings before interest, taxes, zakat, depreciation and amortization.
An accounting scandal at the telecom operator forced Mobily last year to revise its 2014 earnings to a loss of $243 million from the $58.6 million profit previously reported.
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