Mobily registered 34% increase in net profit for the first 6 months of 2011

Mobily announced interim consolidated financial results for the first 6 month period of the year ended 30 June, 2011, where revenues for the first half of 2011 amounted to SAR 9,611 million, as compared to SAR 7,554 million for the same period last year, with an increase of 27%.

The increase in revenues is attributable to higher minutes of usage, data transmission and increase in Smartphone sales. In spite of the intense competition in data services, data revenues showed a remarkable increase of 46% in the first half of the year 2011, as compared to the same period last year.

Data revenues reached 20% of the total revenues of the first half of year 2011, as compared to 17% for the same period last year. Postpaid revenues recorded an increase of 32% in the first half of this year, as compared to the same period last year. EBITDA for the first half of 2011 amounted to SAR 3,337 million, as compared to SAR 2,568 million for the same period last year, with an increase of 30%. The EBITDA margin for the first half of this year reached 35%, as compared to 34% for the same period last year. Net income for Q2 2011 amounted to SAR 1,164 million, as compared to SAR 901 million for the same period last year, with a growth of 29%, and a growth of 17% over Q1 2011 results of SAR 998 million.

Net profit for the first 6 month period amounted to SAR 2,162 million, as compared to SAR 1,615 million for the same period last year, with a growth of 34%. Earnings per share (EPS) for the first 6 month period amounted to SAR 3.09 as compared to SAR 2.31 for the same period last year.

On the other hand, the Board of Directors is scheduled to meet on Thursday 21/07/2011 to determine the amount of interim dividends for the first half of the year 2011, after the General Assembly held on 26/2/2011 had authorized the Board of Directors to distribute semi-annual dividends starting from the fiscal year 2011.

Engineer Abdulaziz Saleh Alsaghyir, Chairman of the Board stated that Mobily is developing and enhancing its infrastructure through its networks expansion, which will help the Company keep growing as per its declared business strategy. He indicated that Smartphone penetration in the Kingdom is estimated at 11% - according to some studies - and is still growing as more affordable mid-range and low end smart phones will be marketed to reach a wider audience and prices are going to drop on high-end models. He also highlighted the substantial increase in utility and usage of connected smart devices and the range of social networking websites applications, like Facebook, Twitter and YouTube, which is a major driver of demand for Internet connectivity in a youth-dominated society, especially some social media platforms releasing Arabic versions.

Eng. Alsaghyir maintained that the number of broadband users had exceeded 5 million, that Mobily has an estimated 75% share of mobile broadband subscriptions in the Kingdom, that daily Mobily 3G network traffic exceeded 100 terabyte and that WiMAX network carry the same volume of daily data traffic. In order to keep up with all these variables, Mobily adopted its strategic decision to add LTE services which will be a major factor for excellence and differentiation with the potential for broadband market share gains; because of LTE ability to provide higher capacity, higher data transfer speeds, higher peak rates, higher spectral efficiency, more scalability and lower latency, which will improve the customer experience and enable home users in the Kingdom, including communities beyond the reach of a fixed-line infrastructure, to have access to fast broadband speeds that exceed speeds of a fixed line connection.  

He added that Mobily LTE network operation is expected to start before the end of 2011, pointing out that the major cities of the Kingdom will be covered first and the remaining cities will be covered as per a well studied plan depending on many technical and marketing factors.

Eng. Alsaghyir continued that Bayanat Al Oula, the data arm of Mobily, signed an agreement for the construction of an advanced fiber optic network (FTTX) inside major cities at a cost of SAR 400 million. The agreement is intended to roll out 4,000 km fiber network reaching 70,000 homes within four major cities, namely Riyadh, Jeddah, Dammam and Al Khobar as a first phase of the project.

The Board Chairman stressed that despite the continuation of the Company's capital expenditure, free cash flow will remain on the rise, which is a positive indication of Mobily’s ability to increase its dividends.

Eng. Alsaghyir reiterated Mobily’s continuing determination to encourage technical innovation and enrich the Arabic content on the Internet, pointing out that the Company has launched an award for Mobily software developers in many areas, in the light of the growing numbers of subscribers looking for cultural, educational and recreational applications.

Eng. Alsaghyir said that business sector revenues registered 47% growth when compared to last year’s first half results, and that Mobily pays a special attention to this sector, providing a number of advanced products and services to companies and enterprises. It is to be mentioned that Mobily has recently linked a number of Saudi Basic Industries Corporation (SABIC) sites in major cities with Internet Protocol Virtual Private Network (IP VPN) and a strategic partnership agreement was signed with General Organization for Social Insurance (GOSI), whereby Mobily operates and manages the infrastructure of ICT networks in Granada Oasis project in Riyadh. In addition, Mobily provides hosting services and a number of other managed services to institutions.

With respect to Company’s social responsibility, Eng. Alsaghyir stated that Mobily has signed a strategic cooperation agreement with the Disabled Children Association to support the Association's plans through Mobily’s customer loyalty program ‘Neqaty’, which enables the subscribers to convert their earned points to financial support to the benefit of the Association, adding that Mobily has collected more than SAR 6.7 million as revenues from the charity auction to sell platinum numbers for the benefit of 10 charities. As usual in obtaining awards that reflect the important role it plays in the Saudi and world telecommunications markets, Mobily was recently named the best telecom company in Saudi Arabia for the year 2011 by business monthly ‘Arabian Business’.