EUR 175.00 For Business Accounts Only

BMCE Capital Research Flash Postview IAM 07 27 2020

• Maintain our target price at MAD 148 leading to target PER of 24.7x in 2020^E and 20,1x in 2021. Given a price of MAD 140.5 observed on 07/24/2020, i.e. an upside of 5%, we recommend accumulating the stock in the portfolios.
• As expected, MAROC TELECOM’s first-half results confirmed the resilience of the company in this context of health crisis, as evidenced by a consolidated turnover up 2.7% to MAD 18,323m and an adjusted net profit nearly stagnant at MAD 3,006m.

 

• For IAM, the year 2020 is characterized by significant and exceptional cash outflows with the payment of the fine of MAD 3.3bn to the ANRT and the contribution to the COVID-19 fund for an amount of MAD 1.5bn, which could lead to an increase in its level of short-term debt.
• In order to cope with this unprecedented situation, the company has decided to reduce its investment budget and intends to invest 10% of its turnover in 2020 against 15% initially. It should be noted that in the first half of 2020, the company's CAPEX (excluding license and frequencies) represented only 6.5% of its turnover.
• By shaking up businesses and consumers, the COVID-19 pandemic has acted as a catalyst for the digital transformation already initiated in the Kingdom. As a Telecom operator, IAM is well positioned to take full advantage of this wave of digitization because it is perfectly in line with these two main growth drivers, namely Mobile Data and Mobile Payment.

 

• In view of the current context, IAM has revised its 2020 outlook. At constant scope and exchange rates, it expects a slight decline in its turnover and its consolidated EBITDA.