CEO: Mobily aims to become profitable again in short term
Mobily’s CEO Ahmed Farroukh believes that the cleanup has been made and the company is in a better position.
“After what happened, if you really ask me what you are going to do, I will say that we will go back to basics; trying to bring clarity across the organization,” Farroukh told Reuters.
“Sometimes you do some health check, and from this health check you can run further and long marathons and this is what we intend to do. Our strategy is to bring back confidence and deliver value to our shareholders. What can bring back confidence is the consistency of the performance. This is a journey that we need to embark and it needs some patience,” the CEO said.
Supporting his belief that the company is now in a better position after the cleanup, the CEO said: “We adopted many of the rules of IFRS 15, the accounting standards that is coming to the Kingdom early 2017 and we made changes to our accounting policies. Mobily improved its corporate governance model in a way that ensures such violation will not happen again.”
He added: “The consistency is working on a plan, coming from the red into neutral then into profitability… Hopefully going back to profitability won’t be too far. It won’t be too far…Hopefully it is a short-term and short term may be estimated at one to twelve months … though it may take longer. We have a lot of revenue stream areas such as data services especially, FTTH services, for which Mobily has already the strong infrastructure to be able to deliver and develop. It is all of this; you need to be innovative to increase your top line.”
Farroukh added: “If you look at the bottom line across all operators, you will find it went down and this is an indication that there is a pressure on the prices, there is a pressure on the revenues. The viability of the telecom industry is a national interest, so we need to be reasonable on our offering, and we just need to be innovative and find another avenues of revenue….there is value added services, we are still trying to convince our financial regulators to consider monetary transactions. There are lots of examples across the world and this is where we need to go further. it is challenging but it is possible as well.”
Farroukh pointed out that Mobily is not in default of payment of any due payments, the only thing we have is a default over one covenant, which states that our debt to EBITDA ratio should be below 2.5, and unfortunately when we did certain reversals and adopted new accounting recognitions, this affected the ratio.
“The issue is that, yes it took some long time, as we are discussing with about many different parties and you need to get them to agree and then there is the legal contract and I am confident we will be closing this issue this quarter. There were no plans to raise debt or issue sukuk for the time being. We have a reasonable cash position and some other facilities that have not been fully utilized,” the Farroukh said.
In this context, the CEO pointed out that tower sales are about maximizing value for your shareholders from selling assets… “Yes, we are thinking about selling our towers, but so far we are not at any stage to disclose anything materially. If we have to go to the sale again, and this is subject to the regulatory and board approval, it will be selling our towers and leasing them back. We are doing this to bring value to shareholders and to better utilize an asset that is laid down, not because of any financial or cash constraint or funding concerns.”