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Etihad Etisalat Co. (EEC) was headed for its biggest weekly gain in almost a year after the second- largest telecommunications operator in Saudi Arabia posted quarterly results that beat estimates.
Shares of the company also known as Mobily advanced 2.7 percent to 75 riyals, the highest level since April 2006, at the close in Riyadh. The shares have surged 5.6 percent since results were announced before the market open on Jan. 19, and are poised for the biggest weekly gain since February. The stock was the biggest gainer on the benchmark Tadawul All Share Index today, which increased 0.3 percent.
Mobily’s fourth-quarter profit rose to 1.9 billion riyals ($507 million) from 1.7 billion riyals after revenue rose 17 percent, helped by subscriber roaming charges and data services. That beat the 1.75 billion-riyal average estimate from 13 analysts, according to data compiled by Bloomberg.
“Mobily’s main focus in 2012 was to increase revenues generated from the business sector, which grew 71 percent year- on-year,” Asim Bukhtiar and Ahmed Korayem, analysts at Riyad Capital, said in an e-mailed note Jan. 20. The company also benefited from Muslim pilgrims heading to the country and using its mobile phone roaming services, he said. Bukhtiar has a buy rating on the stock with a 12-month price estimate of 80 riyals.
Mobily and other Saudi telecommunications companies benefited from economic growth of 6.8 percent last year in the Gulf Cooperation Council’s most-populous country. The kingdom, with a population of 28 million people, had 53.1 million mobile- phone subscriptions and 4.74 million for fixed lines at the end of the third quarter, according to the Communications and Information Technology Commission. Shares of Mobily rallied 45 percent in 2012, outpacing an advance of 6 percent for the benchmark Tadawul All Share Index. (SASEIDX)
Seventeen analysts recommend investors buy the shares, while two say hold, data compiled by Bloomberg show.
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