Mobily reduce its losses by more than half for the second consecutive quarter

Mobily reduced its net losses from SAR 172 million in H1 2018 to SAR 352.7 million in H1 2017 representing a decrease in net losses by 51.2%. This is mainly due to the increase in gross profit driven by revenues increase, and decrease in cost of sales due to the reduction of mobile termination rates.

Revenues

H1 2018 revenues increased slightly by 0.14% to SAR 5,727 million versus SAR 5,719 million in H1 2017. This has been achieved despite the market, regulatory and economic challenges, including:

(1) The reduction of mobile termination rates.

(2) The continuous impact from permitting of VoIP application on international calls revenue.

Taking out the impact of the decrease of the mobile interconnection rates, revenues would have grown by 2.1%

Gross profit

H1 2018 Gross profit increased by 4.2% to SAR 3,438 million versus SAR 3,298 million in H1 2017. This is mainly due to the reduction of cost of sales as a result of mobile termination rates.

EBITDA

The company successfully improved its EBITDA to reach SAR 2,103 million for H1 2018 compared to SAR 1,832 million for H1 2017 resulting in an increase of 15%. This is due to the company efficiency in managing its expenses, the reversal of certain provisions, and the implementation of IFRS 15 and 9. H1 2018 EBITDA margin reached 36.7% versus 32% for H1 2017.

Operational profit (EBIT)

H1 2018 operational profit amounted to SAR 228 million versus SAR 30 million in H1 2017.

Financial charges

Despite the company success in deleveraging net debt, H1 2018 interest and financial charges increased to SAR 380 million compared with 357. This is mainly due to ceasing capitalization of some expenses related to the debt and the increase in SIBOR.

Total comprehensive loss

H1 2018 total comprehensive losses decreased by 43%, to SAR 196 million versus SAR 346 million losses for H1 2017.

Mobily in reducing its losses for the second consecutive quarter, as Q2 2018 net results improved by 58.5% from net losses of SAR 189.6 million in Q2 2017 to net losses of SAR 78.6 million in Q2 2018. This is mainly due to the increase in gross profit as a result of revenue growth and decrease in cost of sales.

YoY revenues:

Mobily succeeded for the first time in the last five years in growing its quarterly revenues (YoY), as Q2 2018 revenues amounted to SAR 2,895 million versus SAR 2,854 million for Q2 2017 reflecting an increase of 1.4%. This is mainly due to the stabilization of subscriber’s base, the improvement of subscribers mix, the increase of data and the growth of FTTH and business unit’s revenues.

This was achieved despite the market, regulatory and economic challenges including the reduction of mobile termination rates.

Taking out the impact of the decrease of the mobile termination rates, revenues would have grown by 3.4%.

Gross profit

Q2 2018 Gross profit increased by 8.7% to SAR 1,775 million versus SAR 1,633 million in Q2 2017. This is mainly due to the increase in revenues and the decrease in cost of sales resulting from the reduction of the mobile termination rates.

EBITDA

Mobily continued for the 4th consecutive quarter to improving its EBITDA which reached in Q2 2018 SAR 1,066 million versus SAR 900 million in Q2 2017, an increase by 18%. This is reflecting the company efficiency in managing its operational expenses. EBITDA margin reached 36.8% for Q2 2018 versus 31.5% for the same quarter last year.

Operational profit (EBIT)

Q2 2018 operational profit reached SAR 127 million compared to operational losses of SAR 5.5 million in Q2 2017 reflecting the improvement in EBITDA which was partially reduced by the increase in depreciation and amortization, due to the company continues investments.

Financial charges

Q2 2018 financial charges increased to SAR 192 million versus SAR 162.7 million in Q2 2017 as a result of ceasing capitalization of some expenses related to the debt and the increase in SIBOR.

Total comprehensive loss

Q2 2018 total comprehensive loss amounted to SAR 104 million versus loss of SAR 190 million for the same quarter last year, a reduction in losses by 45%.