Mobily chairman clarifies final 2014 financial results

04/03/2015 07:41 AST

Etihad Etisalat (Mobily) Chairman Sulaiman Al-Gwaiz confirmed that the final financial results of 2014 reflect the revisions considering all precaution measures to ensure the mitigation of future risks.

Al-Gwaiz stressed in a press statement released earlier by the company that what Mobily had experienced during the third and fourth quarters of last year was extraordinary, and the company cannot be assessed on this basis as Mobily has the factors of success such as stable cash flow, a wide customer base, and advanced infrastructures which, in gross value, amounted to more than SR35 billion by the end of 2014, and include networks covering all inhabited areas in the Kingdom, in addition to a large Fiber network (FFTH) as well as the-state-of-the-art data centers.

The chairman said that the additional reported losses of SR1,133 million for Q4, 2014 are primarily attributed to the precautionary measures, which have recently been approved by the board of directors to mitigate medium- and long-term risks.

He clarified that the details of the additional amount mentioned above are as follows: Recording the amount of SR677 million as an extra general and administrative expense regarding provisions for existent short-term and long-term receivables, for running lawsuits and others, reducing other income by SR194 million after the re-evaluation of an agreement with one of the network providers and others, recording SR186 million to cost of services and sales which are related to the amortization of deferred costs of devices for customers based on additional information and revised estimates and others, and finally recording the reduction in amount of SR76 for revenue.

Al-Gwaiz added that the company has fulfilled all financial obligations regarding to repayment of loans and the related murabaha expenses for 2014, and the company does not foresee any potential difficulties with regard to the repayment of future loan installments and the related murabaha expenses.

As of Dec. 31, 2014, the company was unable to fulfill one of the financial covenants only (net debt/earnings before interest, taxes, depreciation, amortization and zakat, that is EBITDA) under the long-term loan obtained from several lenders, he said.

He added that the company is confident that the current negotiations with the lenders to reassign the financial covenants will succeed during the second quarter of 2015. A disclosure will be announced if there is any update. Only SR2.4 billion of these obligations will be due during 2015, and SR2.1 billion will be due in 2016. The remaining amounts are to be paid during the following years until 2024. The cash and cash equivalent balance and short-term investments reached SR3 billion as of Dec. 31, 2014.

The company's revenues for 2014 reached SR15.7 billion resulting in SR6 billion in net cash from operations. The total assets of the company are SR47.5 billion and shareholders’ equity is SR19.4 billion as of Dec. 31, 2014. The chairman pointed out that the decision taken by the board of directors is aimed at putting the company back on the right track and this will be a new starting point.

Arab News