Etihad Etisalat Co. shares fell to the lowest level in more than six years as the Saudi Arabian phone operator resumed trading following a two-month suspension.
The stock retreated 7.8 percent to 31.18 riyals at the close in Riyadh, the lowest level since June 2009. About 15 million shares changed hands, almost 12 times the three-month daily trading average, making the stock the third-most traded on Saudi Arabia’s Tadawul All Share Index. The gauge rose 0.2 percent.
Etihad Etisalat, also known as Mobily, last traded on June 8, when the market regulator raised concern about its contracts and asked the company to reconsider accounting methods. The company resumed trading after reporting a second-quarter loss and restating financial results following a market probe. Abdullah Alkahtani, spokesman at the Riyadh-based Capital Market Authority spokesman, declined to comment on Mobily and the regulator’s ongoing investigation.
“Aside from the regulator’s probe and the revised financial statements, which is definitely adding negative sentiment among investors, the company seems to be struggling with growth,” said Mazen Al-Sudairi, the Riyadh-based head of sell-side research at Alistithmar Capital, a unit of Saudi Investment Bank. “We are not seeing any improvements in their business model or strategies at a time when there’s definitely a price war among other competing phone operators.”
Mobily, which lost more than $9 billion of market value since the regulator started a probe into accounting errors in October, reported a loss Sunday of 901 million riyals ($240 million) in the second quarter after posting a profit of 92.5 million riyals a year earlier. Last week, it restated the 2014 loss to 1.58 billion riyals from 913 million riyals, and the 2013 loss to 4.7 billion riyals from 5.9 billion riyals.
The company in July hired a new management team to steer it through the financial difficulties. Ahmad Farroukh, a former chief executive officer of MTN Group Ltd.’s South Africa unit, joined the Riyadh-based operator in July. Kais Ben Hamida, who previously worked for Orange SA, Egyptian Co. for Mobile Services and Societe Generale SA, was also hired as the chief financial officer.
Mobily removed CEO Khalid Omar Al Kaf in February after saying accounting errors affected financial statements of 2013 and 2014. Mobily is an affiliate of Emirates Telecommunications Corp., the United Arab Emirates’ biggest phone company.