Emirates Telecommunications Corp.’s second-quarter profit declined after it increased provisions for Etihad Etisalat Co., its unit in Saudi Arabia.
Profit after federal royalty was 1.5 billion dirhams ($408 million), the company said in an e-mailed statement, without giving a comparative figure. Net income was 2.51 billion dirhams in the same period last year, data compiled by Bloomberg show. The board has approved a dividend of 40 fils a share for the first half of the year, 14 percent more than last year, according to the statement.
Profit fell “due to higher depreciation and amortization charges, the impact of Mobily’s additional provision for accounts receivables, higher net finance costs and incurring forex losses during the period against forex gains in the same period last year,” Group Chief Executive Officer Ahmad Julfar said in the statement.
Etisalat’s unit in Saudi Arabia known as Mobily lost more than $9 billion of its value since October after accounting errors were first reported. Etisalat owns about 27 percent of Mobily, data compiled by Bloomberg show.
The U.A.E.-based phone operator raised $400 million in the sale of bonds in April. It’s stock surged 49 percent this year after the company said it would allow foreign investors to own its shares. The government holds 60 percent of the company through the Emirates Investment Authority, its only sovereign wealth fund.