Mobily Value Tumbles $1.83 Billion as Investors Seek Clarity

Etihad Etisalat Co. plunged after the Saudi phone operator posted its first loss since 2005, erasing $1.83 billion of market value.

Shares of the company, known as Mobily, declined by the daily limit for a second day, slumping 9.8 percent to 38.50 riyals at the close. The market value slid to 29.7 billion riyals ($7.9 billion), from 36.5 billion riyals on Jan. 21, according to data compiled by Bloomberg. The stock has dropped 57 percent in the past 12 months, compared with a 2.9 percent retreat for the country’s benchmark equity index.

Mobily, which suspended Chief Executive Officer Khalid Omar Al Kaf after accounting errors in November, reported a 2.28 billion-riyal loss for in the fourth quarter, after a profit a year earlier. The company cited a drop in non-recurring revenue and an increase in operating expenses.

“There is no respite for the stock in sight until the management explain the situation to investors,” Mohammed Al-Suwayed, a Riyadh-based financial analyst and partner at market-analytics company SPT Investors LLC, said by phone referring to the losses. “It’s going to keep falling and we might see it around the 20 riyal level in the next few weeks.”

Egyptian investment bank EFG-Hermes Holding SAE on Jan. 22 cut Mobily to sell from neutral with a share-price estimate of 38.1 riyals. Mobily was the biggest decliner on Saudi Arabia’s Tadawul All Share Index. The measure rose 0.7 percent in the first trading day since the death of King Abdullah on Jan. 23.

“Investors fear that they might see more disappointing performances in the next few quarters,” Al-Suwayed said.

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