Albilad Capital recommended on Thursday an overweight rating on the stocks of Etihad Etisalat Mobily, while slashing its fair value to SAR 43.50.
 
Mobily, the kingdom's second-largest telecom operator, attributed its poor performance over the previous period to market-related factors; namely fierce competition, Saudi Arabia’s Nitaqat Program, and a drop in the number of visitors coming to the kingdom for pilgrimage, according to Albilad.
 
Mobily’s accounting restatements gave an accurate portrayal of the company’s operational, as well as financial performance, Albilad noted. 
 
The firm expects Mobily’s results to remain in status quo throughout fiscal year 2015. 
 
The bourse-listed telecom operator indicated that shareholders should base their decisions on first quarter 2015 financials.
 
Based on its conservative analytics, Albilad expects Mobily to generate SAR 16.6 billion in revenues during fiscal year 2016. 
 
It also forecasted that operational cash flows may weigh on dividend payouts compared to previous years, given lower profitability and higher leverage.
 
Mobily’s profit decline in 2014 was mainly attributed to one-off items and non-cash expenses. However, the operator is also expected to cut its investment spending over the coming period, according to Albilad.

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