DUBAI, April 24 Saudi Arabia's second largest
telecoms firm, Mobily, slumped on a disappointing set of first
quarter results on Monday, as profit-taking hit other shares.
Riyadh's index slipped 0.3 percent, retreating from
a 1.0-percent gain in the previous session on Saturday's news
that the government had reversed the public sector workers'
Consumer cyclical shares, which were the chief performers on
Sunday, fell with home improvement retailer Saudi Hardware
Company down 1.9 percent.
Shares of Etihad Etisalat (Mobily) tumbled 7.6
percent to 20.70 riyals after it swung to a net loss of 163
million riyals ($43.47 million) in the first quarter, compared
with a net profit of 20 million riyals in the prior-year period
and below the average of four analysts' forecast of a net loss
of 69.39 million riyals.
Mobily attributed the net loss to a fall in revenue and
higher interest and financial charges because of higher interest
Analysts at NCB Capital said the lower revenue could be
blamed on the impact of the authority's finger print initiative
and higher competition.
"The ongoing losses combined with the strong decline in
sales are the key concerns. Progress in tower sale MoU with STC
will be a key catalyst going forward," said NCB Capital, which
has a "neutral" recommendation on the stock with a price target
of 25.00 riyals.
This marks the company's third consecutive quarterly loss.
Shares in Saudi retailer Fawaz Alhokair, which
were suspended on Sunday, surged 10 percent after reporting a
net profit of 79.4 million riyals ($21.2 million) in the fourth
quarter, significantly higher than 3.17 million riyals made in
prior year period and ahead of analysts' expectation of a net
profit of 61.7 million riyals.
The company attributed the improving bottom line to better
control of operational costs, though fourth-quarter sales were
down 6.3 percent from the prior year period to 1.42 billion
Analysts at Alrajhi Capital said the improving gross margin,
which had been squeezed over the last few quarters, is
encouraging and the company may be able to maintain a margin at
around 20 percent in the coming quarters.
Alhkair's 2016 full-year net profit came in at 391.2 million
riyals, compared to 615.8 million riyals in 2015. The company's
financial year starts on April 1.
In Qatar, the index fell 0.3 percent, dragged lower
by oil-related shares; commodities shipper Qatar Gas Transport
lost 2.3 percent.
Dubai's index, which was shut on Sunday for a
public holiday, was down 0.2 percent. Union Properties
, which had surged in unusually heavy trade in the
prior session, fell 1.9 percent.
In neighbouring emirate Abu Dhabi, the index added
0.1 percent with main support from blue chips. First Abu Dhabi
Bank was up 0.5 percent and telecommunications
operator Etisalat rose 0.3 percent.
(Reporting by Celine Aswad; Editing by Andrew Heavens)