Mobily likely to incur SAR 391 mln loss in 2019: NCBC

Etihad Etisalat Co. (Mobily) is likely to incur a net loss of SAR 391 million this year, compared to a net loss of SAR 123 million in 2018, NCB Capital (NCBC) said in a recent report.

The telecom operator is expected to be hit by the government royalty fees, which might delay its profitability until 2021 instead of 2019.

Efficient cost management and focus on sales could offset the impact of government charges and a decline in the number of subscribers.

Meanwhile, Saudi Arabia's inclusion in global emerging markets indices is likely to shore up the stock price in the short term, NCBC added.

NCBC downgraded its rating on Mobily to "Underweight", setting the stock target price at SAR 18.80.

In December 2018, Mobily signed an agreement with the Ministry of Finance, the Ministry of Telecommunications and Information Technology, and the Communications and Information Technology Commission (CITC), Argaam reported.

The agreement was reached to settle all the old disputes and define a new investment framework and a new mechanism for the calculation of service royalties and license royalties, the statement said.