Earnings Report /

Maroc Telecom: Poor FY19 results, impacted by MAD3bn provision for ANRT fine

    Tracy Kivunyu
    Tracy Kivunyu

    Equity Research Analyst, Telecoms

    Tellimer Research
    17 February 2020
    Published byTellimer Research

    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%).