Maroc Telecom profits decline

27 July 2011

Financial woes as state plans to float stake in operator

Maroc Telecom, the state-owned mobile operator has recorded a decline in profits for the first half of the year.  

While the group’s customer base grew by 16.5 per cent to 27.5 million, revenues decreased 0.8 per cent to MD15.3bn ($1.9bn) as a result of the increasingly competitive domestic market where its overall revenues decreased 1.7 per cent.

Net income for the group declined 10.3 per cent in the first half of 2011 to reach MD3.9bn.

“Results were weaker than market expectations. Competition has been picking up and pressures will persist,” says Martin Mabbutt, analyst at Japanese bank Nomura.

The Finance and Economy Ministry is planning to reduce its stake in the operator. It will float 8 per cent of its 30 per cent stake on the Casablanca bourse. The 8 per cent is worth about $1.1bn.

“Historically Maroc Telecom is a strong yielding company, but now may not be the best time to sell with the undercurrent financial patterns,” says Mabbutt.

Maroc Telecom is one of the largest listed companies in Morocco. It is thought that the government is keen to sell its stake to meet the state’s budgetary requirements. In February, Finance Minister Salaheddine Mezouar indicated that the state would have to sell some assets in order to preserve the 3.5 per cent target deficit for the 2011 budget. Maroc Telecom appears to be the first of these asset sales.

The ministry will open bids to pick a financial adviser on 7 September. According to sources at Maroc Telecom, the state has shown no indication of when the transaction will be completed.  

“The government will act like a shareholder in this process and we have not received any deadlines or agenda from them,” says the source.

France’s Vivendi owns 53 per cent of Maroc Telecom. “Vivendi is a long-term holder, in the past they’ve indicated they’d be prepared to increase ownership, but the government may want to put more stock in local investors hands or other foreign firms,” says Mabbutt.

Morocco has had its share of protests and calls for reform. King Mohammad VI has responded better than other Arab figureheads to calls for constitutional reform. On 1 July, the population voted in a referendum in favour of a constitutional monarchy and the proposed changes.

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