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7020

Governance: C

ETIHAD ETISALAT

Etihad Etisalat Co.

63.60 SAR / Share

As of: May 28, 2026

13.6x P/E Ratio Trailing 12 Months

2.4x P/B Ratio Price to Book Value

4.4% Dividend Yield Annual Dividend / Share

48.81B SAR Market Cap Total Valuation

0.78 Beta Systematic Risk Index

18.0% Net Margin Net Profit / Revenue

The Story

Etihad Etisalat exhibits robust, consistent top-line and bottom-line expansion across its consumer and business segments, though its capital-intensive nature and negative historical reinvestment rate present unique dynamics for long-term self-funded growth.

Source: Q1 2026 (2026-05-04)

Value Creation -0.2% Excess Return on Capital (Spread between ROIC/ROE and Cost of Capital)

Cash Flow Payback — Estimated years of operating cash flows required to cover Enterprise Value

Performance & Distributions

Dividend Yield Trailing annual dividends paid relative to share price

4.4%

Sustainable Growth Rate Rate at which company can grow internally using reinvested profits

-3.4%

Payout Ratio Percent of net profits distributed as dividends

60.0%

Net Margin Net profit margin generated from total operational revenue

18.0%

ROIC Return on Invested Capital

7.4%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

13.6x

P/B Ratio Market capitalization compared to corporate book value

2.4x

EV / EBITDA Operating multiple reflecting core operational leverage

7.7x

EV / SALES Asset pricing multiple relative to total topline revenue

2.8x

Growth Story

Under the metaphor of the Expanding Irrigation Network, Etihad Etisalat has steadily widened its revenue channels, growing from SAR 14.83 billion in fiscal 2021 to SAR 19.64 billion in fiscal 2025, and reaching SAR 19.90 billion in the TTM period. This top-line expansion is supported by robust performance across key segments, with consumer revenue reaching SAR 3.10 billion and business revenue growing to SAR 1.24 billion in the first quarter of 2026. However, the company's five-year average reinvestment rate stands at -45.71%, reflecting a historical trend of returning capital or paying down debt rather than retaining earnings for reinvestment. This dynamic results in a negative Sustainable Growth Rate of -3.37%. Despite this theoretical constraint, the company continues to secure its long-term capacity, highlighted by its late 2024 acquisition of a fifteen-year spectrum license for SAR 2.49 billion, which became active in 2025 to support future network demands.

Profitability Dynamics

Operating like a Finely Tuned Turbine, Etihad Etisalat efficiently converts its massive infrastructure into steady profits, with net income rising from SAR 1.07 billion in fiscal 2021 to SAR 3.58 billion in the TTM period. This operational efficiency is reflected in a strong TTM operating margin of 20.02% and a profit margin of 17.98%. However, true economic value creation remains tightly balanced. The company's five-year average return on invested capital of 7.38% slightly trails its weighted average cost of capital of 7.60%, resulting in a marginal negative ROIC-vs-WACC gap of -0.22%. This indicates that while the company generates substantial absolute profits, it operates right on the edge of covering its capital costs. Furthermore, maintaining this turbine requires continuous capital expenditure, with TTM capex reaching SAR 3.23 billion, which heavily influences the company's free cash flow generation.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.78

Cost of Equity Minimum required rate of return demanded by shareholders

7.7%

WACC Weighted average cost of total debt and equity funding

7.6%

Debt-to-Equity Ratio Proportion of corporate funding financed by debt creditors

19.0%

Risk Factors

Like an Anchored Vessel in Choppy Waters, Etihad Etisalat maintains a stable market position but remains exposed to regulatory and operational currents. The company's low relevered beta of 0.778 reflects lower systemic volatility relative to the broader market. Its capital structure includes SAR 9.28 billion in total debt against SAR 3.11 billion in cash, with a cost of equity of 7.68% and an after-tax cost of debt of 7.16%. Beyond financial leverage, the company faces ongoing regulatory challenges, including outstanding CST violation penalties of SAR 53 million as of March 2026, which are currently being contested. Operational execution risks are also present, as seen in the late 2025 termination of a virtual mobile network hosting agreement by Red Bull, though management expects no material financial impact. Additionally, the company continues to monitor regional geopolitical tensions, which could potentially disrupt supply chains and increase operational costs.

Governance Disclosures

Rating: C

We track 9 key governance and oversight matters for this company in our database.

Significance: 2/10 Asset Risk

Financial Guarantees for Joint Venture Obligations

The Group has provided a financial guarantee for its joint venture, Sehati for Information Technology Service Company, in the form of an outstanding letter of guarantee amounting to SAR 11.3 million.

Mitigating Factors: The guarantee amount is relatively small in proportion to the Group's total equity and assets.

Significance: 5/10 Tunneling

Executive Long-Term Incentive Program and Treasury Share Repurchase

The company repurchased 2.5 million of its own shares at an average price of SAR 63.69 per share, totaling SAR 159 million. These shares are held as treasury shares to fund a long-term incentive program for executive employees, with SAR 33 million in related expenses recognized during the period.

Mitigating Factors: The program and the share repurchase were recommended by the Board and approved by the General Assembly.

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In-Depth Analysis