RIYADH — Etihad Etisalat (Mobily) reduced its losses by 94% to SR199 millions in the first quarter of 2015 against SR3,410 million during the previous quarter. Deputy CEO Serkan Okandan said “Mobily is committed to two main priorities: firstly we are working to secure and strengthen our customer base, both with consumers and our fast-growing business segment. Secondly we aim to implement operational efficiencies to generate savings across the business. By focusing on these two important areas, we are confident that we can maintain and build on our position as the region most innovative provider of communications services.” Revenues for Q1 2015 amounted to SR3,613 million in comparison to SR5,094 million for the same quarter in 2014, representing a decrease of 29%. During Q1 2014, the company booked SR1,265 million for non-recurring data revenue mainly of FTTH capital lease. Excluding that non-recurring FTTH capital lease revenue from Q1 2014 and equipment sales from both quarters, revenues for Q1 2015 would be 3% lower than the same quarter last year. EBITDA for Q1 2015 amounted to SR908 million in comparison to SR2,485 million for the same quarter in 2014. EBITDA margin for the first quarter is 25% compared to 49% for the same quarter of the previous year. However, by eliminating the effect of the non-recurring data revenue FTTH capital lease amounting to SR1,265 million, the adjusted EBITDA margin for the first quarter of the previous year would be 34%. Cash flow from operating activities during the quarter continued to generate SR1,166 million cash mainly as a result of efficient working capital management. Capex for Q1 2015 amounted to SR1,461 million in comparison to SR1,513 million for the same quarter last year. The high capex/revenue ratio of 40% during the quarter was mainly due to capitalization of projects started in 2014 and before. Gross debt as of March 31, 2015 amounted to SR16,176 million in comparison to SR16,993 million as of December 31, 2014. During the quarter, the company serviced all its contractual debt obligations, amounting to SR872 million principal repayments and SR59 million accrued interest payments, to lenders in line with the existing facility agreements. The reason for the net losses is mainly attributed to the higher increase in depreciation expenses by SR250 million — mainly related to (i) catch-up depreciation expenses related to capitalized fixed assets during the quarter (SR183 million), (ii) increase in depreciation expenses due to normal course of business (SR155 million), and (iii) lesser depreciation expense due to revised useful life of assets implemented effective from January 1, 2015 (SR88 million); as well as additional doubtful debt provisions amounting to SR133 million, mainly for the non-performing receivables from customers, in addition to the decrease in revenues attributed to the presence of non-recurring data revenue, mainly FTTH capital lease amounting to SR1,265 million, in the same quarter of the previous year. The reason for the reduction in net losses is mainly attributed to the financial impact resulting from one-time adjustments that negatively impacted the net income of the previous quarter. The company increased its focus on the optimization of the cost structure during the quarter. The Management believes that positive impacts of the actions being taken will be more visible in the coming quarters. — SG
