Maroc Telecom SaCSEMA: IAM

Maroc Telecom - PR HY 2024 Results 24/07/2024

Jul 24, 2024 at 4:59 AM UTC · Issued by Maroc Telecom SA

PRESS RELEASE

Rabat, July 24, 2024

H1 2024 CONSOLIDATED RESULTS

Resilient operational results:

Group customer base up 5.1% to 78.4 million customers;
Growth of 0.9%* in consolidated revenues, mainly driven by the activities of the Moov Africa subsidiaries (+3.7%*);
Strong growth in Mobile Data revenues of Moov Africa subsidiaries (+18.2%*) and Fiber Optics in Morocco (+34.1%), offsetting the decrease in ADSL and Mobile revenues in Morocco;
High profitability maintained with the Group's adjusted EBITDA margin at 51.9%;
Sustained Group investment (excluding frequencies and licenses), representing 17.6% of revenues.

2024 outlook, at constant scope and exchange rates:

Stable revenues;
Stable EBITDA;
CAPEX excluding frequencies and licenses of approximately 20% of revenues;
Net income and year-end debt significantly impacted by the Wana Corporate litigation provision recorded at June 30.

Maroc Telecom Group maintains its momentum in sub-Saharan Africa and posted solid operating results in the first half of 2024, in line with its targets, proving the robustness of its fundamentals.

It fuels the growth of its activities through significant investments and implements cost optimization programs to ensure high profitability.

The Group is attentive to mutations in its markets and the needs of its customers, and proactively adapts its product and service offer.

* Constant MAD/ouguiya/CFA franc exchange rate.

Group adjusted consolidated results*:

							Change at
(IFRS in MAD millions)		Q2 2023	Q2 2024			Change	constant
					exchange

							rates(1)
Revenues	9,306	9,194	-1.2%	0.5%

Adjusted EBITDA	4,943	4,823	-2.4%	-1.0%
Margin (%)	53.1%	52.5%		-0.7 pt		-0.8 pt

Adjusted EBITA	3,161	3,052	-3.5%	-2.1%
Margin (%)	34.0%	33.2%		-0.8 pt		-0.9 pt

Adjusted net income -	1,408	1,415	0.5%	1.4%
Group share

Margin (%)	15.1%	15.4%		0.3 pt		0.1 pt

CAPEX(2)	2,091	1,953	-6.6%	-5.1%
Of which frequencies and	0	22
licenses

CAPEX/Revenues (excluding	22.5%	21.0%		-1.5 pt		-1.5 pt
frequencies and licenses)


Adjusted CFFO	1,637	2,001	22.2%	24.5%

Net debt	15,733	14,383	-8.6%	-7.7%
Net debt/EBITDA(3)		0.7x	0.7x

* Adjustments to financial indicators are set out in Appendix 1.

						Change at
	H1 2023	H1 2024			Change	constant
				exchange

						rates(1)
18,399	18,260	-0.8%	0.9%

9,580	9,478	-1.1%	0.3%
52.1%	51.9%		-0.2 pt		-0.3 pt

6,052	5,935	-1.9%	-0.7%
32.9%	32.5%		-0.4 pt		-0.5 pt

2,935	2,943	0.3%	0.9%
16.0%	16.1%		0.2 pt		0.0 pt

2,945	3,232	9.8%	11.6%
0	22
16.0%	17.6%		1.6 pt		1.6 pt

5,037	4,839	-3.9%	-2.5%

15,733	14,383	-8.6%	-7.7%
	0.8x	0.7x

Customer base

As of June 30, 2024, the Group customer base stood at 78.4 million customers, up 5.1% year-on- year, driven by the increase in subsidiaries' customer base (+8.9%).

Revenues

As at end of June 30, 2024, Maroc Telecom Group recorded consolidated revenues(4) of MAD 18,260 million, up 0.9%(1), boosted by the expansion of its Moov Africa subsidiaries business (+3.7%(1)).

Earnings from operations before depreciation and amortization

In the first half of 2024, consolidated adjusted earnings from operations before depreciation and amortization (EBITDA) for Maroc Telecom Group reached MAD 9,478 million, slightly up 0.3%(1). This performance was driven by ongoing efforts to control operating costs, with an adjusted EBITDA almost stable in Morocco and growth among the Moov Africa subsidiaries (+1.0%(1)).

The adjusted EBITDA margin remained high at 51.9%, virtually unchanged year on year.

Earnings from operations

Consolidated adjusted earnings from operations (EBITA)(5) for the first six months of 2024 totaled MAD 5,935 million, down 0.7%(1). The adjusted EBITA margin was 32.5%, down by 0.5 pt(1).

Net income Group share

Adjusted net income Group share for first half 2024 amounted to MAD 2,943 million, up 0.9%(1).

CAPEX

CAPEX(2) excluding frequencies and licenses represented 17.6% of Group revenues at the end of June 2024, in line with the full-year outlook.

Cash flow

Adjusted net cash flows from operations (CFFO)(6) amounted to MAD 4,839 million for first half 2024, down by 2.5%(1).

As of June 30, 2024, Group consolidated net debt(7) was MAD 14,383 million, representing 0.7 time annualized EBITDA(3).

Highlights

The Casablanca Commercial Court of Appeal confirmed the judgment rendered by the Rabat Commercial Court, ordering IAM to pay Wana Corporate MAD 6.368 billion, fully accrued for in the accounts at the end of June 2024. The Company will appeal to the Court of Cassation against the decision of the Court of Appeal.

Group business review:

The adjustments to the "Morocco" and "International" financial indicators are explained in Appendix 1.

Morocco

(IFRS in MAD millions)	Q2 2023	Q2 2024	Change

Revenues	4,897	4,798	-2.0%

Mobile	2,905	2,761	-5.0%
Services	2,679	2,635	-1.6%
Equipments and other revenues	226	126	-44.4%

Fixed	2,439	2,463	1.0%
Of which Fixed Data*	1,080	1,150	6.5%
Elimination and other income	-447	-426

Adjusted EBITDA	2,791	2,740	-1.8%
Margin (%)	57.0%	57.1%	0.1 pt

Adjusted EBITA	1,931	1,920	-0.6%
Margin (%)	39.4%	40.0%	0.6 pt

H1 2023	H1 2024	Change

9,680	9,521	-1.6%

5,738	5,473	-4.6%
5,370	5,221	-2.8%
368	252	-31.5%

4,825	4,924	2.1%
2,136	2,287	7.1%
-883	-876

5,417	5,402	-0.3%
56.0%	56.7%	0.8 pt

3,684	3,744	1.6%
38.1%	39.3%	1.3 pt

CAPEX(2)	1,012	1,027	1.5%	1,428	1,555	9.0%
Of which frequencies and licenses	0	0		0	0
CAPEX/Revenues (excluding	20.7%	21.4%	0.7 pt	14.7%	16.3%	1.6 pt
frequencies and licenses)


Adjusted CFFO	749	1,035	38.2%	2,810	2,913	3.7%

Net debt	8,730	6,614	-24.2%	8,730	6,614	-24.2%
Net debt/EBITDA(3)	0.7x	0.5x			0.8x	0.6x

* Fixed Data includes the Internet, TV on ADSL and Data services to companies.

In the first half of 2024, revenues in Morocco decreased by 1.6% versus the same period in 2023, to MAD 9,521 million. Fixed Data revenues continue to drive Fixed-line revenues, partly offsetting the decline in Mobile revenues.

Adjusted earnings from operations before depreciation and amortization (EBITDA) amounted to MAD 5,402 million, almost stable versus H1 2023. The adjusted EBITDA margin stood at a high level of 56.7%, up 0.8 pt.

Adjusted earnings from operations (EBITA)(5) amounted to MAD 3,744 million, up 1.6% year-on-year. The adjusted EBITA margin improved by 1.3 pt to 39.3%.

During the first half of 2024, the adjusted net cash flows from operations (CFFO)(6) increased by 3.7% to MAD 2,913 million.

Mobile

	Unit	06/30/2023

Customer base(8)	(000)	19,581
Prepaid	(000)	17,121
Postpaid	(000)	2,460
Of which Internet 3G/4G+(9)	(000)	11,084
ARPU(10)	(MAD/month)	45.6

06/30/2024

19,068

16,503

2,566

11,433

43.3

Change

-2.6%

-3.6%

4.3%

3.1%

-3.8%

At June 30, 2024, the Mobile customer base(8) reached 19.1 million, with continued growth in the postpaid customer base (+4.3%).

Mobile revenues decreased by 4.6% versus the same period in 2023 to MAD 5,473 million.

Blended ARPU(10) amounted to MAD 43.3 for the first six months of 2024, down 3.8% year-on-year.

Fixed-line and Internet

	Unit	06/30/2023

Fixed-line	(000)	1,853
Broadband access(11)	(000)	1,632

06/30/2024

1,702

1,495

Change

-8.1%

-8.4%

The Fixed-line customer base reached over 1.7 million lines as of June 30, 2024. The Broadband(11) customer base represented nearly 1.5 million subscribers, with a substantial 36% increase in the FTTH customer base.

Fixed-line & Internet revenues increased by 2.1% in the first half of 2024, mainly boosted by the good performance of Data activities (+7.1%), which offset the decline in Voice activities.

Moov Africa subsidiaries

Financial indicators

											Change at							Change at
(IFRS in MAD millions)		Q2 2023			Q2 2024			Change		constant			H1 2023	H1 2024		Change	constant
								exchange							exchange

											rates(1)							rates(1)
Revenues	4,686	4,694		0.2%	3.6%		9,280	9,326	0.5%		3.7%
Of which Mobile services	4,336	4,297		-0.9%	2.4%		8,574	8,545	-0.3%		2.8%

Adjusted EBITDA	2,151	2,083		-3.2%	0.1%		4,163	4,076	-2.1%		1.0%
Margin (%)	45.9%	44.4%			-1.5 pt		-1.5 pt	44.9%	43.7%			-1.2 pt	-1.2 pt

Adjusted EBITA	1,230	1,132		-8.0%	-4.6%		2,368	2,191	-7.5%		-4.3%
Margin (%)	26.3%	24.1%			-2.1 pt		-2.1 pt	25.5%	23.5%			-2.0 pt	-2.0 pt

CAPEX(2)	1,079	926		-14.2%	-11.4%		1,517	1,677	10.5%		14.0%
Of which frequencies and	0	22							0	22
licenses

CAPEX/Revenues
(excluding frequencies	23.0%	19.2%			-3.8 pt		-3.8 pt	16.3%	17.7%			1.4 pt	1.4 pt
and licenses)
Adjusted CFFO	888	966		8.7%	12.9%		2,227	1,926	-13.5%		-10.3%

Net debt	7,251	7,834		8.0%	10.0%		7,251	7,834	8.0%		10.0%
Net debt/EBITDA(3)			0.8x			0.9x							0.8x	0.9x

Moov Africa subsidiaries revenues improved by 3.7%(1) over the first six months of the year to MAD 9,326 million, driven by strong performance in Mobile Data (+18.2%(1)), Fixed-line Data (+21,6%(1)) and Mobile Money (+4.6%(1)). Excluding the reduction in call termination rates, subsidiaries' revenues soared by 4.3%(1).

First half adjusted earnings from operations before depreciation and amortization (EBITDA) reached MAD 4,076 million, up 1.0%(1) thanks especially to increased revenues. The adjusted EBITDA margin stood at 43.7%.

For the same period, adjusted earnings from operations (EBITA)(5) amounted to MAD 2,191 million, down 4.3%(1) due to higher depreciation and amortization following major investments programs. The adjusted EBITA margin stood at 23.5%.

Adjusted net cash flows from operations (CFFO)(6) decreased by 10.3%(1), to MAD 1,926 million mainly due to a sharp rise in investments.

Operational indicators

Mobile Customer base(8)

Mauritania

Burkina Faso

Gabon

Mali

Côte d'Ivoire

Benin

Togo

Niger

Central African Republic

Chad

Fixed-line customer base

Mauritania

Burkina Faso

Gabon

Mali

Fixed Broadband customer base(11)

Mauritania

Burkina Faso

Gabon

Mali

Unit

(000)


06/30/2023		06/30/2024	Change

50,966		55,485
2,692	2,381	-11.6%
11,148	11,826	6.1%
1,450	1,624	12.0%
8,730	8,545	-2.1%
9,511	11,191	17.7%
5,475	6,487	18.5%
2,855	2,952	3.4%
2,968	3,605	21.5%
198	273	37.5%
5,939	6,601	11.1%

372		395
44	18	-58.8%
75	70	-7.1%
50	60	20.1%
204	248	21.6%

		233
177

22	27	20.8%
18	36	100.3%
47	57	22.6%
90	112	24.9%

Notes:

Constant MAD/ouguiya/CFA franc exchange rate.
Capital expenditure corresponds to acquisitions of property, plant and equipment and intangible assets recognized during the period.
The net debt/EBITDA ratio excludes the impact of IFRS 16, and takes into account the annualization of EBITDA.
Maroc Telecom consolidates in its financial statements Casanet and the Moov Africa subsidiaries in Mauritania, Burkina
Faso, Gabon, Mali, Côte d'Ivoire, Benin, Togo, Niger, Central African Republic and Chad.
EBITA corresponds to operating profit before amortization of intangible assets related to business combinations, impairment of goodwill and other intangible assets related to business combinations and other income and expenses related to financial investment transactions and transactions with shareholders (except when they are recognized directly in equity).
CFFO comprises the net cash flows from operating activities before taxes as presented in the cash flow statement, as well as dividends received from associates and non-consolidated equity interests. It also includes net capital expenditure, which corresponds to net cash outflows on acquisitions and disposals of property, plant and equipment and intangible assets.
Borrowings and other current and non-current liabilities less cash (and cash equivalents) including cash blocked for bank loans.
The active customer base consists of prepaid customers who have made or received a voice call (excluding calls from the public telecommunication network operator concerned or its Customer Relations Centers) or sent an SMS/MMS or who have used the Data services (excluding exchanges of technical data with the public telecommunication network operator concerned) in the past three months, and non-terminated postpaid customers.
The active customer base of the 3G and 4G+ Mobile Internet includes holders of a postpaid subscription contract (whether or not coupled with a voice offer) and holders of a prepaid subscription to the Internet service who have carried out at least one recharge during the past three months or whose credit is valid and who have used the service during this period.
ARPU (average revenues per user) is defined as revenues generated by incoming and outgoing calls and data services net of promotions, excluding roaming and equipment sales, divided by the average number of users in the period. This is the blended ARPU of the prepaid and postpaid segments.
The broadband customer base includes ADSL, FTTH and leased connections and also includes CDMA in Mali.

Important Warning:

Forward-lookingstatements. This press release contains forward-looking statements and items of a forward-looking nature relating to the financial position, results of operations, strategy and outlook of Maroc Telecom and the impacts of certain operations. Although Maroc Telecom believes that these forward-looking statements are based on reasonable assumptions, they do not constitute guarantees as to the future performance of the company. Actual results may be very different from forward-looking statements due to a number of known or unknown risks and uncertainties, most of which are beyond our control, including the risks described in public documents filed by Maroc Telecom with the Moroccan Capital Market Authority (www.ammc.ma) and the French Financial Markets Authority (www.amf-france.org), also available in French on our website (www.iam.ma). This press release contains forward-looking information that can only be assessed on the day it is distributed. Maroc Telecom makes no commitment to supplement, update or modify these forward-looking statements due to new information, a future event or any other reason, subject to applicable regulations, in particular Articles 2.19 et seq. of the circular of the Moroccan Capital Market Authority and 223-1 et seq. of the General Regulation of the French Financial Markets Authority.

Maroc Telecom is a global telecommunications operator in Morocco, a leader in all its business segments, Fixed-line, Mobile and Internet. It has grown internationally and is now present in eleven countries in Africa. Maroc Telecom is listed simultaneously in Casablanca and Paris and its reference shareholders are the Société de Participation dans les Télécommunications (SPT)* (53%) and the Kingdom of Morocco (22%).

* SPT is a Moroccan company controlled by Etisalat.

	Contacts

Investor relations	Press relations
relations.investisseurs@iam.ma	relations.presse@iam.ma

Appendix 1: Relationship between adjusted financial indicators and published financial indicators

Adjusted EBITDA, adjusted EBITA, Group share of adjusted net income and adjusted CFFO are not strictly accounting measures and should be considered as additional information. They are a better indicator of the Group's performance as they exclude non-recurring items.

H1 2023

H1 2024

(MAD millions)	Morocco	Subsidiaries	Morocco	Morocco	Subsidiaries	Group
Adjusted EBITDA	5,417	4,163	9,580	5,402	4,076	9,478
Published EBITDA	5,417	4,163	9,580	5,402	4,076	9,478

Adjusted EBITA	3,684	2,368	6,052	3,744	2,191	5,935
Wana Corporate dispute				-6,007		-6,007
Published EBITA	3,684	2,368	6,052	-2,263	2,191	-72

Adjusted net income - Group share			2,935			2,943
Wana Corporate dispute						-4,055
Increase in corporate tax rate			-50			-35
Published net income - Group share			2,885			-1,147

Adjusted CFFO	2,810	2,227	5,037	2,913	1,926	4,839
Payment of license					-22	-22
Published CFFO	2,810	2,227	5,037	2,913	1,904	4,817

Appendix 2: Impact of IFRS 16

At the end of June 2024, the impacts of IFRS 16 on the main indicators of the Maroc Telecom Group were as follows:

		H1 2023			H1 2024

(MAD millions)	Morocco	Subsidiaries	Group	Morocco	Subsidiaries	Group
Adjusted EBITDA	134	157	291	136	153	289
Adjusted EBITA	10	25	35	7	23	30
Adjusted net income - Group share			-4			-10

Adjusted CFFO	134	157	291	136	153	289
Net debt	781	818	1,599	819	836	1,656