ADDENDUM ANNOUNCEMENT FROM ETIHAD ETISALAT CO RELATED TO ANNUAL FINANCIAL RESULTS FOR THE PERIOD ENDING ON 31-12-2014 (Continue)
External auditors opinion note (b) and note 2.2 in the consolidated financial statements
Management Comment:
The net loss of for the fourth quarter of year 2014 amounted to SR 2,277 million as per the interim financial statements issued previously on January 21, 2014. The company has recorded additional charges of Saudi Riyals 1,133 million, resulting in a net loss for the fourth quarter of the year 2014 of SR 3,410 million. Also, the net loss for the year ended December 31, 2014 amounted to SR 913 million. Mobily would like to clarify herby the details of the additional charges as follows:
- The revenue decreased by SR 76 million as a result of changing the estimate for data revenue amortization by SR 42 million, in addition to SR 34 million resulting from difference of the consolidation of National Company for Business Solutions UAE (fully owned subsidiaries).
- The cost of services and sales was increased by SR 186 million as a result of SR 221 million deferred cost of customer premises equipment (CPE) charged to profit and loss based on additional information and revised assessments, in addition to the decrease in cost by SR 35 million as a resulted of the difference of the consolidation of National Company for Business Solutions UAE (fully owned subsidiaries).
- The general and administrative expenses were increased by SR 677 million as a result of the recording additional provisions of SR 657 million for recoverability of various outstanding short and long term receivables, ongoing litigation in addition to SR 20 million resulting from difference of the consolidation of National Company for Business Solutions UAE (fully owned subsidiaries).
- The other income was decreased by SR 194 million as a result of SR 153 million after reassessment of underlying agreement for fixed assets with network equipment vendor, in addition to SAR 50 million write-off costs incurred for a canceled project and the changes in Zakat and Depreciation and amortization by SR 9 million.
For more details about the movements between the Audited FS and unaudited FS please refer to the attached file.
What Mobily experienced during the third and fourth quarters of last year were exceptional and extraordinary circumstances that should not form the basis for assessing the company given the number of success factors it holds including stable cash flow, wide customer base and advanced infrastructure with a gross value exceeding SAR 35 billion by the end of 2014 and which includes a telecommunication network covering all inhabited areas of the Kingdom, a large Fiber-optic network (FFTH) and world class data centers. The decisions taken by the management are primarily aimed at putting the company back on the right track and this will constitute a new starting point.
Furthermore, we would like to indicate that the Company has not received some confirmations sent for some relatively important accounts receivable.
The Board of Directors declares that to the best of its knowledge there are currently no additional exceptional circumstances similar to the ones experienced by the company in 2014 and which affected the company profitability or resulted in restating its interim accounts. In addition, the Board of Directors is taking all necessary steps to prevent reoccurrence of the said circumstances.
Attached Documents
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