Etihad Etisalat announced its unaudited financial statements for the first quarter 2015 ending 31st March 2015.
The company managed to reduce its losses to SR199 millions in comparison to SR 3,410 Million during the previous quarter with 94%.
Deputy CEO Serkan Okandan said: Mobily is committed to two main priorities: firstly we are working to secure and strengthen our customer base, both with consumers and our fast-growing business segment. Secondly we aim to implement operational efficiencies to generate savings across the business. By focusing on these two important areas, we are confident that we can maintain and build on our position as the region most innovative provider of communications services.
Revenues for Q1 2015 amounted to SAR 3,613 million in comparison to SAR 5,094 million for the same quarter in 2014, representing a decrease of 29%. During Q1 2014, the Company booked SAR 1,265 million for non-recurring data revenue mainly of FTTH capital lease. Excluding that non-recurring FTTH capital lease revenue from Q1 2014 and equipment sales from both quarters, revenues for Q1 2015 would be 3% lower than the same quarter last year.
The reason for the net losses is mainly attributed to the higher increase in depreciation expenses by SAR 250 million; mainly related to (i) catch-up depreciation expenses related to capitalized fixed assets during the quarter (SAR 183 million), (ii) increase in depreciation expenses due to normal course of business (SAR 155 million), and (iii) lesser depreciation expense due to revised useful life of assets implemented effective from January 1st 2015 (SAR 88 million); as well as additional doubtful debt provisions amounting to SAR 133 million, mainly for the non-performing receivables from customers, in addition to the decrease in revenues attributed to the presence of non-recurring data revenue, mainly FTTH capital lease amounting to SAR 1,265 million, in the same quarter of the previous year.
The reason for the reduction in net losses is mainly attributed to the financial impact resulting from one-time adjustments that negatively impacted the net income of the previous quarter.
The company increased its focus on the optimization of the cost structure during the quarter. The Management believes that positive impacts of the actions being taken will be more visible in the coming quarters.
EBITDA for Q1 2015 amounted to SAR 908 million in comparison to SAR 2,485 million for the same quarter in 2014. EBITDA margin for the first quarter is 25% compared to 49% for the same quarter of the previous year. However, by eliminating the effect of the non-recurring data revenue FTTH capital lease amounting to SAR 1,265 million, the adjusted EBITDA margin for the first quarter of the previous year would be 34%.
Cash flow from operating activities during the quarter continued to generate SAR 1,166 million cash mainly as a result of efficient working capital management.
Capex for Q1 2015 amounted to SAR 1,461 million in comparison to SAR 1,513 million for the same quarter last year. The high capex/revenue ratio of 40% during the quarter was mainly due to capitalization of projects started in 2014 and before.
Gross debt as of March 31, 2015 amounted to SAR 16,176 million in comparison to SAR 16,993 million as of December 31, 2014. During the quarter, the Company serviced all its contractual debt obligations, amounting to SAR 872 million principal repayments and SAR 59 million accrued interest payments, to lenders in line with the existing facility agreements.