Rabat - Maroc Telecom ended the first quarter of 2017 with a net profit of MAD 1.4 billion, down 10.5 percent compared to the same period last year.
Rabat – Maroc Telecom ended the first quarter of 2017 with a net profit of MAD 1.4 billion, down 10.5 percent compared to the same period last year.
According to the telecommunication giant, this decrease is mainly due to the implementation of a restructuring charge of MAD 183 million, linked to its voluntary departures plan in Morocco, as well as a capital gain realized during the first quarter of 2016, estimated at MAD 295 million.
Apart from these two facts, the net income of the company stood at MAD 1.5 billion, showing an increase of 8.7 percent at constant exchange rates. This performance is attributed to the success of the restructuring of the new African subsidiaries, whose overall net profit is now positive.
However, over the same period, Maroc Telecom reported consolidated sales of MAD 8.5 billion, down by 2.7 percent from last year, which the operator has explained to be “due to a an unfavorable calendar effect and significant reductions in call termination rates in Morocco and abroad.”
The drop in tariffs has indeed plagued the telecom operator’s figures, despite the 2.7 percent increase in its fleets, which exceeds 54 million customers. This evolution was mainly driven by the growth of mobile and internet parks in Niger, Côte d’Ivoire, Togo and Gabon.
The Chairman of the Management Board, Mr. Abdeslam Ahizoune, said on the occasion of the publication of these results that “in a context marked by a tougher regulatory and competitive environment, the good results of the Maroc Telecom Group for this first quarter of 2017 demonstrates the relevance of its development model based on an effective commercial dynamic, centered on technological innovation and services that meet the expectations of its customers.”
Ahizoune added that “at the same time, the Group continues to optimize its costs, to support its margins and to increase its profitability. Its investment capacity, thus preserved, allows it to pursue its strategy of differentiation by the quality of its networks and services in its markets both in Morocco and sub-Saharan Africa.”
Still, in the first quarter of 2017, Moroccan businesses generated revenues of MAD 5 billion, a decline of 2.6 percent due to lower revenue from Mobile (-3.6 percent) and landlines (-1.2 percent). On the other hand, the operational results of the group stood at MAD 4.2 billion, up 1.4 percent from the same period last year.
Maroc Telecom explains this modest performance through the intensification of operational cost reduction programs, which are down by 2 percent at constant exchange rates and a favorable impact of the drop in mobile termination rates in the African subsidiaries.
On the international level, during the first quarter of 2017, the Group’s international operations recorded a turnover of MAD 3.8 billion, down by 2.5 percent due to unfavorable currency effects and following significant decreases in call termination rates.
Apart from this unfavorable effects, revenues from the African subsidiaries rose by 1.6 percent, a pace similar to that of the fourth quarter of 2016, thanks to market share gains and the growth in Data uses. Operating income before depreciation and amortization (EBITDA) amounted to MAD 1.6 billion, an increase of 4.2 percent due to the improvement of 2.4 percentage points of the gross margin rate, in particular as a result of lower call termination rates, and the optimization of operating costs, which were down 1.6 percent.
The Q1FY17 EBITA reached MAD 932 million, marking a sharp increase of 12.2 percent at constant exchange rates, after adjusting for the capital gain of MAD 295 million realized in the first quarter of 2016 following the sale of a real estate asset.
The corresponding operating margin reached 24.7 percent, up 2.8 pts at constant exchange rates, due to a 0.4 percent decrease in depreciation expense. The net operating cash flow (CFFO) of the international activities stand at MAD 362 million following the acquiring of licenses in Côte d’Ivoire and Togo which cost the company MAD 435 million.