Mobily reduces its losses by 94% during Q1 2015
Etihad Etisalat announced its unaudited financial statements for the first quarter 2015 ending March 31, 2015.
The company managed to reduce its losses to SR199 million in comparison to SR3.410 billion during the previous quarter with 94 percent.
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 billion in comparison to SR5.094 billion for the same quarter in 2014, representing a decrease of 29 percent.
During Q1 2014, the company booked SR1.265 billion for nonrecurring 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 percent lower than the same quarter last year.
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 Jan. 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 billion, 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.
EBITDA for Q1 2015 amounted to SR908 million in comparison to SR2.485 billion for the same quarter in 2014. EBITDA margin for the first quarter is 25 percent compared to 49 percent 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 percent.
Cash flow from operating activities during the quarter continued to generate SR1.166 billion cash mainly as a result of efficient working capital management.
Capex for Q1 2015 amounted to SR1.461 billion in comparison to SR1.513 billion for the same quarter last year. The high capex/revenue ratio of 40 percent during the quarter was mainly due to capital- ization of projects started in 2014 and before.
Gross debt as of March 31, 2015 amounted to SR16.176 billion in comparison to SR16.993 billion 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 accrue gross debt as of March 31, 2015 amounted to SR16.176 billion in comparison to SR16.993 billion as of Dec. 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 management believes that positive impacts of the actions being taken will be more visible in the coming quarters.