Maroc Telecom sees marginal improvement in its domestic operations in 1H14

Mergers, Acquisitions and Financial Results

Maroc Telecom, the country’s leading telco in terms of subscribers, has published its financial results for the six months ended 30 June 2014, reporting a marginal 0.7% annual increase in revenues, from MAD14.468 billion (USD1.746 billion) to MAD14.564 billion.

The improvement was chiefly attributed to 10.9% annual growth among the company’s international operations, which partly offset a 2.4% sales decrease in its domestic market during the same period. Meanwhile, Maroc Telecom’s EBITDA decreased by 4.4% in the period under review, to MAD8.034 billion; the slump was attributed to a 7% decline in the Moroccan unit’s EBITDA, although this was partly compensated by a 4.1% increase in EBITDA from the company’s international operations.

Maroc Telecom’s net income in the period under review reached MAD3.073 billion, a 12.7% decrease on the MAD3.521 billion income reported in 1H13.

In operational terms, Maroc Telecom reported annualised growth of 9.2% for its consolidated customer base, with the total number of customers passing the 38 million-mark at end-June 2014. In Morocco, wireless customers increased by 0.6% year-on-year to reach 18.163 million, up from 18.049 million in 1H13; the telco’s wireline customer base grew by 9.0% to 1.444 million users, while broadband customers increased by 22.3% y-o-y to 923,000.

In Mauritania, wireless numbers decreased by 6.1% to 1.877 million users, due to intense competition in the market, while broadband subscriptions increased by 3.4% to 8,000. In Burkina Faso, the Office Nationale des Telecommunications (Onatel, incl. Telmob) saw its mobile subscribers increase by 27% y-o-y to reach 5.394 million by 30 June, although its broadband customer base declined by 34.2% to around 18,000. Further, Gabon Telecom reported a 16.6% increase in its number of its mobile users, to 1.083 million, while Mali-based operator Societe des Telecommunications du Mali (SOTELMA) increased its mobile subscriber numbers 21.8% to 9.164 million in 1H14, with more than one and a half million net additions in the period under review.

Going forward, the group will expand the scope of its international operations with six new markets, following the signing of a USD650 million agreement with its new major shareholder Etisalat in May this year. The deal involves the acquisition of the UAE telco’s subsidiaries in Benin, Cote d’Ivoire, Gabon, Niger, the Central African Republic and Togo; the deal also includes Prestige Telecom, which provides IT services for Etisalat’s subsidiaries in those countries. The agreement is subject to approval from the relevant authorities and Maroc Telecom anticipates that it should be closed by Q3 2014. Further, the operator expects that the accelerated international diversification will result in 40% increase in group revenues.

Abdeslam Ahizoune, chairman of the management board, stated: ‘Maroc Telecom Group confirms the return to revenue growth, with the rise in traffic driven by our operating performances and by the quality of our offers. Our customers communicate more and more inspired by our innovations and secured with the quality of our networks. Despite a challenging regulatory environment, the group continues its proactive policy of modernising networks through the deployment of ultra high speed fixed line and mobile services. The agreement concluded with Etisalat to acquire its activities in six countries with high-potential markets allows Maroc Telecom Group to pass a new milestone in its development in sub-Saharan Africa.’