Mobily’s Q3 net profit misses estimates; flat margins remain positive: NCB Capital

Etihad Etisalat Co.’s (Mobily) net profit of SAR 51 million for Q3 2019 missed NCB Capital and consensus’ estimates of SAR 74 million and SAR 68 million, respectively, the research firm said in an earnings review.

The variance was likely due to the higher than expected depreciation expense, as it stood at SAR 1.015 billion in Q3 19, versus a forecast of SAR 972 million.

Revenue rose 14.4 percent year-on-year (YoY) to SAR 3.4 billion, as expected.

Gross margins came in at 59.2 percent, slightly higher than the estimates of 58.4 percent, but in-line with Q3 2018 margins.

“We believe the company’s ability to maintain its margin despite expanding its wholesale and corporate segments is a key positive,” the report said.

NCB Capital recommended an “Underweight” rating on the stock with a target price of SAR 18.8 per share.