Mobily’s net profit down 41% to SAR 2496m for the first nine months of 2014 and a net profit of SAR 472m for Q3

Etihad Etisalat Company (Mobily), a second mobile operator in Saudi Arabia, reported a net profit of SAR 2496m for the nine months ended September 30,2014, a 41% decrease compared to the same period last year.

A net profit of SAR 472m was reported for Q3-2014.

The Company attributed the decrease of the first nine months of 2014’s net profit compared to the same period last year to the presence of non-recurring revenue and profit of wholesale & carrier services in the same period of the previous year, in addition to the increase of provisions and higher depreciation expenses in the current period.

The Company attributed the decline of Q3-2014’s net profit compared to the same period last year to the presence of non-recurring revenue and profit of wholesale & carrier services in the same quarter of the previous year, in addition to the increase of provisions and higher depreciation expenses in the current quarter.

The increase of Q3-2014’s net profit compared to the previous period (Q2-2014) was attributed to the financial impact resulting from the cancellation of Etihad Atheeb right of use agreement which led to the cancellation of SAR 338.7 million from the net income of previous quarter, despite the increase of provisions and higher depreciation expenses in the current quarter.

External auditor’s report drew attention to:

It was stated in the chartered accountant report that: We draw attention to Note 14 to the accompanying interim consolidated financial statements, which outlines the impact of restatements of revenue and net income, in addition to retained earnings and related balances, in:

The consolidated financial statements for the year ended December 31, 2013 and the interim consolidated financial statements for the comparative period in 2013 and for the periods ended March 31, 2014 and June 30, 2014 as a result of an error in the timing of revenue recognition in respect of a promotional program, and

The interim consolidated financial statements for the period ended June 30, 2014 relating to the timing of revenue recognition in respect of leasing elements of the fiber-optic communication network due to a lack of readiness for use in full by the end user of the service.