good results, but very uncertain prospects

The majority of companies listed on the Casablanca Stock Exchange published very good commercial results in the first quarter of this year, but face very uncertain prospects which hide several major risks, according to the various analyses.

Over the first three months of this year, the aggregate revenues of the 67 companies, having submitted their accounts, increased by 14.8% to 71.4 billion dirhams (MMDH). This is 9.2 billion dirhams of additional turnover, supported by a very significant price effect following the passing on of a good part of the increase in inputs in the final sale price.

This development, the strongest since the outbreak of the Covid-19 crisis, comes in a context “marked by the outbreak of the Russo-Ukrainian crisis which led to an additional rise in inflation linked to the surge in oil prices. and raw materials, the 2021/2022 agricultural campaign which is taking place in difficult climatic conditions, in addition to the uncertainty which remains high due to the successive appearance of new variants”, underline the analysts of the stock market company MSIN.

The main sectoral contributions

Driven by the rise in the price of energy raw materials, the oil and gas sector, represented by TotalEnergies Marketing Maroc and Afriquia Gaz, contributed 25.6% (2.36 billion dirhams) to the increase in turnover overall rating for the first quarter of this year. In detail, TotalEnergies Marketing Morocco saw its revenues increase by 68.2% to 2.66 billion dirhams, while Afriquia Gaz reported a turnover up by 32% to 2.25 billion dirhams.

The mining sector comes second among the largest contributors, driven by Managem, which achieved a turnover of more than 2.791 billion dirhams, up 122.2% (+1.5 billion dirhams) compared to Q1- 2021.

Managem benefited in particular from the rise in the parity and average selling prices of all the metals produced by the Group, particularly cobalt and copper, and from the increase in production capacity. Its subsidiary SMI improved its turnover by 84% to 217 million dirhams (MDH), while CMT increased its income by 21% to 77 MDH.

The third step of the podium is completed by the Agrifood sector, with an additional turnover of 1.397 billion dirhams, in repercussions, according to MSIN, of inflation on sales prices. On an individual level, Cosumar recorded a turnover of 2.486 billion dirhams (+25.9%), Lesieur Cristal 1.64 billion dirhams (+62.9%), SBM 496 million dirhams (+2.7%), Mutandis 422 million dirhams (+40.7% ), Oulmès 402 MDH (+23.6%), Unimer 201 MDH (+16.2%) and Dari Couspate 193 MDH (+5.9%).

With regard to the other main contributors, the building and building materials sector recorded an additional turnover of 1.21 billion dirhams, at a time when the six listed banks posted net banking income up by 853 million dirhams to 17.4 MDH. The electricity sector, represented by Taqa Morocco, increased its turnover from 746 million dirhams to 2.658 billion dirhams.

A second half of the year marked by risks The high growth in revenues of companies listed on the Casablanca Stock Exchange comes in an inflationary context, note analysts from Attijari Global Research (AGR) in a note devoted to quarterly results of companies .Three factors support, according to them, the rise in prices during 2022. These are the lack of visibility on the outcome of the Russo-Ukrainian conflict, the disruption of maritime logistics chains and the reopening of the Chinese economy whose impact would be visible on global demand.

In this context, the average prices of the main energy inputs imported by listed companies show significant increases between the first quarter of 2021 and that of this year, they note, noting in this sense that the average prices of Oil, Coal and Ethylene increased by 61%, 240% and 38% respectively over the period studied.

Taking into account the spot prices observed at the beginning of June, and the additional costs induced by the supply chain, AGR analysts anticipate stronger pressures on input prices. Thus, in these conditions, listed companies should face to two major risks from the second half of 2022. Analysts point out that this is greater pressure on margins following the disposal of inventories built up in recent quarters. Companies whose turnover is generated mainly in Morocco would be the most vulnerable. These already show a deterioration of -2.3 pts in their gross operating surplus (EBITDA) margin between the first and second half of 2021. On the other hand, exclusively exporting companies seem to be taking advantage of this context through an improvement in their EBITDA margin of +16.3 pts over the same period.

The second risk relates to a weakening of local demand which should be felt more from June 2022, say the analysts, recalling that the consumption of cement reinforces this feeling.

Indeed, year-on-year growth in cement sales posted a sharp deceleration from 14.8% at the end of December 2021 to -5.1% at the end of April 2022.


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