Maroc released its FY19 results today which were poor. EPS declined 55% to MAD3.10, impacted by the provisioning of MAD3.3bn relating to abuse of dominance. DPS was also cut by 19% to MAD5.54, but payout increased from 100% to 179%.
Revenue grew 1% to MAD36.5bn. Morocco revenue grew 1% yoy while International revenue grew 5% (benefited from currency movements as like-for-like performance was 0.2%). International revenue was impacted by a drop in termination rates, without which like-for-like performance would have been 1.2%.
EBITDA grew 3% yoy to MAD19bn, with EBITDA margin up 0.9% to 51.9%. Morocco had a 3% improvement in EBITDA margin to 57% due to an improvement in gross margin (cost of sales as a percentage of revenue down by 1% to 16%) while the International subsidiary EBITDA margin improved by 1%. We note that the proportion of taxes to revenue increased from 8% in FY18 to 9% in FY19, indicating increased tax pressure in the international subsidiaries.
Capex intensity was flat at 22% with Morocco’s intensity up by 1% to 14%, while for the international subsidiaries, capex intensity declined from 24% to 23%.
We will revisit our estimates post feedback from management on the ongoing court case for the Inwi lawsuit, the likelihood of a provision reversal for the ANRT fine and Mali weakness in subscription growth (only 2%).