ETIHAD ETISALAT COMPANY (A Saudi Joint Stock

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ETIHAD ETISALAT COMPANY (A Saudi Joint Stock ETIHAD ETISALAT COMPANY (A Saudi Joint Stock Company) CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited) For the three-month and six-month periods ended 30 June 2020 Together with Independent Auditor’s Review Report Contents Independent Auditor’s Review Report .................................................................................................................... 2 Condensed consolidated interim statement of financial position ............................................................................. 4 Condensed consolidated interim statement of profit or loss .................................................................................... 5 Condensed consolidated interim statement of comprehensive income .................................................................... 6 Condensed consolidated interim statement of changes in shareholders’ equity ...................................................... 7 Condensed consolidated interim statement of cash flows ....................................................................................... 8 Notes to the condensed consolidated interim financial statements ..................................................................... 9-18 KPMG Al Fozan & Partners Telephone +966 11 874 8500 Certified Public Accountants Fax +966 11 874 8600 Riyadh Front, Airport Road, Internet www.kpmg.com/sa P. O. Box 92876 Riyadh 11663 License No. 46/11/323 issued 11/3/1992 Kingdom of Saudi Arabia Independent auditor’s report on review of condensed consolidated interim financial statements To the Shareholders of Etihad Etisalat Company Introduction We have reviewed the accompanying 30 June 2020 condensed consolidated interim financial statements of Etihad Etisalat Company (“the Company”) and its subsidiaries (“the Group”) which comprise: • the condensed consolidated interim statement of financial position as at 30 June 2020; • the condensed consolidated interim statement of profit or loss for the three-month and six-month periods ended 30 June 2020; • the condensed consolidated interim statement of comprehensive income for the three-month and six-month periods ended 30 June 2020; • the condensed consolidated interim statement of changes in equity for the six-month period ended 30 June 2020; • the condensed consolidated interim statement of cash flows for the six-month period ended 30 June 2020; and • the notes to the condensed consolidated interim financial statements. Management is responsible for the preparation and presentation of these condensed consolidated interim financial statements in accordance with IAS 34, ‘Interim Financial Reporting’ that is endorsed in the Kingdom of Saudi Arabia. Our responsibility is to express a conclusion on these condensed consolidated interim financial statements based on our review. Scope of review We conducted our review in accordance with the International Standard on Review Engagements 2410, ‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’ that is endorsed in the Kingdom of Saudi Arabia. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing that are endorsed in the Kingdom of Saudi Arabia, and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. KPMG Al Fozan & Partners Certified Public Accountants, a registered company in the Kingdom of Saudi Arabia, and a non- partner member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative, a Swiss entity. Independent auditor’s report on review of condensed consolidated interim financial statements (continued) Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying 30 June 2020 condensed consolidated interim financial statements of Etihad Etisalat Company and its subsidiaries are not prepared, in all material respects, in accordance with IAS 34, ‘Interim Financial Reporting’ that is endorsed in the Kingdom of Saudi Arabia. For KPMG Al Fozan & Partners Certified Public Accountants Khalil Ibrahim Al Sedais License No. 371 Riyadh on: 29 Dhul Qa’adah 1441H Corresponding to: 20 July 2020 3 Etihad Etisalat Company (A Saudi Joint Stock Company) Condensed consolidated interim statement of financial position As at 30 June 2020 (All amounts in Saudi Riyals thousands unless otherwise stated) Unaudited Audited 30 June 31 December Notes 2020 2019 Assets Non-current assets Property and equipment 5 21,109,376 21,651,369 Right of use assets 6 2,275,604 2,378,958 Intangible assets 7 8,390,507 8,566,577 Capital advances 85,059 99,469 Financial assets 7,636 7,636 Total non-current assets 31,868,182 32,704,009 Current assets Inventories 30,732 104,747 Contract assets 551,093 387,879 Accounts receivable 8 3,744,210 3,034,222 Due from related parties 9 85,615 90,266 Prepaid expenses and other assets 763,654 850,658 Other financial assets 815,000 839,000 Derivatives financial instruments 15,839 - Cash and cash equivalents 1,089,586 1,251,680 Total current assets 7,095,729 6,558,452 Total assets 38,963,911 39,262,461 equity and liabilities equity Share capital 1 7,700,000 7,700,000 Statutory reserve 2,648,971 2,648,971 Retained earnings 3,794,130 3,469,231 Foreign currency translation reserve (13,245) (10,979) Hedging reserve (110,325) (56,238) Fair value reserve 365 365 14,019,896 13,751,350 Non-current liabilities Loans and notes payable 10 10,623,320 11,227,540 Lease liabilities 1,808,475 1,857,052 414,604 438,030 Contract liabilities 11,146 22,292 Deferred government grants income 112,758 122,373 Other financial liabilities 251,180 275,536 Provision for decommissioning liability 159,469 154,787 Total non-current liabilities 13,380,952 14,097,610 Current liabilities Loans and notes payable 10 1,519,267 1,157,017 Lease liabilities 683,798 651,972 Accounts payable 4,920,039 5,092,583 Contract liabilities 1,279,045 1,137,091 Due to related parties 9 217,056 264,765 Accrued expenses and other liabilities 2,274,935 2,512,947 Derivatives financial instruments 94,824 56,238 Provisions 447,560 445,295 Zakat provision 107,308 76,362 Deferred government grants income 19,231 19,231 Total current liabilities 11,563,063 11,413,501 Total liabilities 24,944,015 25,511,111 Total equity and liabilities 38,963,911 39,262,461 The attached notes from 1 to 17 are an integral part of these condensed consolidated interim financial statements. Chief Financial Officer CChiefhieff EExecutivexex cutive OOfficerfficer Chairman Etihad Etisalat Company (A Saudi Joint Stock Company) Condensed consolidated interim statement of profit or loss (unaudited) For the three-month period and six-month periods 30 June 2020 (All amounts in Saudi Riyals thousands unless otherwise stated) For the three-month period For the six-month period ended 30 June ended 30 June Notes 2020 2019 2020 2019 Revenue 12 3,558,775 3,330,915 7,158,398 6,531,875 Cost of revenue (1,496,782) (1,374,614) (3,031,005) (2,736,865) Gross profit 2,061,993 1,956,301 4,127,393 3,795,010 Selling and marketing expenses (346,336) (340,243) (693,784) (615,608) General and administrative expenses (355,903) (340,146) (745,893) (664,577) Impairment loss on accounts receivable and contract assets 8 (18,188) (70,539) (65,596) (47,978) Depreciation and amortization 5,6,7 (986,788) (944,910) (1,975,702) (1,913,508) Impairment loss on property and equipment 5 (14,238) (15,000) (14,238) (42,000) Other (expense) / income, net (6,331) 16,007 (1,701) 26,799 Operating profit 334,209 261,470 630,479 538,138 Share in results of joint venture - (820) - (1,309) Finance expenses (138,805) (217,435) (300,471) (429,202) Finance income 6,534 10,163 16,388 21,597 Profit before zakat 201,938 53,378 346,396 129,224 Zakat expense (16,770) (15,607) (30,949) (24,203) Profit for the period 185,168 37,771 315,447 105,021 Earnings per share: Basic and diluted earnings per share (in SR) 13 0.24 0.05 0.41 0.14 The attachedttached notes from 1 to 17 are an integraltegral part ooff thttheseese condensed consolidaconsolidatedt interim financial statements. Chief Financial Officer ChiefChief ExecutiveExecutive OOfficerfficcerer Chairman Etihad Etisalat Company (A Saudi Joint Stock Company) Condensed consolidated interim statement of comprehensive income (unaudited) For the three-month period and six-month periods 30 June 2020 (All amounts in Saudi Riyals thousands unless otherwise stated) For the three-month period For the six-month period ended 30 June ended 30 June 2020 2019 2020 2019 Profit for the period 185,168 37,771 315,447 105,021 Items that will be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations (154) 297 (2,266) 374 Cash flow hedge - change in fair value (27,888) (18,933) (59,567) (44,046) Cash flow hedge - reclassified to profit or loss 3,628 1,704 5,480 3,414 Net total items that will be reclassified subsequently to profit or loss (24,414) (16,932) (56,353) (40,258) Items that will not be reclassified subsequently to profit or loss: Actuarial gains / (losses) on re-measurement of 995 (4,627) 9,452 (1,539) Change in fair value of equity investments at FVOCI - - - 365 Net total items that will not be reclassified
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