Mobily 2014 Loss to Rise by $221 Million After Accounting ChangeMatthew Martin
Etihad Etisalat Co., the Saudi phone operator that lost more than half of its market value since October, said its 2014 loss will increase by about $221 million after revising accounting policies following a probe.
Mobily, as the company is known, will change the accounting for some of its contracts in response to a review by a team appointed by the Capital Market Authority, the company said in a statement to the stock exchange Sunday. The 2014 loss will increase to 1.745 billion riyals ($465 million), while the first-quarter loss will decrease by 207 million riyals, resulting in a profit of 8 million riyals.
The operator has lost more than $9 billion of its market value since accounting errors were first reported. Trading in the shares has been suspended since June 9 as the regulator waited for a response to its initial report into suspected violations of rules related to the disclosure of financial information, market manipulation and insider trading.
Revised accounts for 2014 and the first quarter will be published before the second-quarter results are announced, the company said. The changes to the accounting policies relate to its Fiber-To-The-Home and Brand Reseller contracts. Mobily has also increased provisions related to receivables from Zain Saudi Arabia by 800 million riyals. The provisions will take effect in the second quarter.
Separately, Emirates Telecommunications Corp., which owns 27.45 percent of Mobily, said the Saudi phone operator’s revisions and provisions will cost it about 820 million dirhams ($223 million), according to a statement.