The state of health of the action of SONATEL at the BRVM, being a National Telecommunications Company of Senegal, SONATEL, was created in 1985. It was, from the beginning of the nineties, a competitive company . On the eve of its privatization, in July 1997 it had one of the best networks in sub-Saharan Africa thanks to its level of digitization and the number of lines per inhabitant.
Today, the SONATEL group offers global telecommunications solutions for individuals and businesses in the fixed, mobile, internet, television and data fields. It has built a modern network, entirely digitized by transmission loops and international links by submarine high-speed optical fiber cables. It is the first Senegalese telecommunications operator. Its turnover is broken down as follows:
– Mobile telephony (71.8%) with subscribers distributed by country between Senegal, Mali, Guinea, Sierra Leone and Guinea-Bissau;
– Interconnection services (12.5%);
– Mobile payment and money transfer services (6.1%);
– Internet access services (4.3%),
– Fixed telephony (2.8%) and
– Others (2.5%) consisting of data transmission services, payphones, terminal sales, etc.
The geographic breakdown of turnover is as follows: Africa (91.7%), Europe (8%), Asia (0.2%) and America (0.1%).
SONATEL, was listed on the Regional Stock Exchange on October 02, 1998. Since then, it has been successful with shareholders, which means that on December 31, 2019, SONATEL’s market capitalization amounted to 1,695 billion or 35% of total capitalization of the 46 companies listed on the Abidjan Stock Exchange. With these figures, SONATEL received the trophy for the best company listed on the BRVM during the first edition of the BRVM Awards held on February 08, 2020 in Abidjan.
As a reminder, the BRVM Awards are a ceremony instituted by the BRVM to celebrate and promote excellence by rewarding the most dynamic players in the WAEMU Regional Financial Market. SONATEL was distinguished there for the quality of its financial information, its governance (audit committee, number of meetings, etc.) and the stock market life of its share (liquidity, dividend payment, capitalization).
In fiscal year 2019, SONATEL achieved a 6.34% increase in turnover, which stood at 1,086.8 billion FCFA, an increase of 64.8 billion FCFA mainly from Retail with a contribution from the main growth drivers. The company’s EBITDA is estimated at FCFA 482.1 billion, with an increase of 4.2% compared to the 2018 financial year. Operating income shows a balance of 316.7 billion FCFA, an increase of 1.4% compared to 2018, due to the growth in overall operating expenses of 8.17% which amounted to 819.5 billion FCFA at the end of 2019 .
At the end of 2019, i.e. on December 31, the SONATEL (SNTS) share price increased by 6.2% to 16,995 FCFA despite a drop of 3.40% from the BRVM 10 index.
Since the start of the current year, the value of the SONATEL share has fallen by 20.5%. It is difficult to explain this sudden movement on the company because of the poor accessibility to market information on the BRVM. In addition to having lower profitability, SONATEL faces a high burden of its debt. At the end of 2019, its overall debt represented 61.7% of its equity against 57.7% in 2018. Its operating profit for 2019 covered only 9.5 times the interest on loans it has to repay against 12, 6 times in 2018 and 16.4 times in 2017.
The share price closed at 15,000 FCFA on 02/27/2020 and shows a net yield of 8.2%. Following the Ordinary General Meeting (AGO), the SONATEL group’s board of directors decided to allocate CFAF 136 billion to shareholders, representing a distribution rate of 69% of net profit. SONATEL therefore plans to pay a net dividend of 1,225 FCFA per share, on behalf of the 2019 financial year, thus representing a net yield of 8.17% compared to the share price on February 28, 2020. This dividend will be paid from 05 May 2020.
The SONATEL group is the most valuable company in the BRVM. Its capitalization therefore influences the BRVM C index. The graph below represents the share price over the period from February 2019 to February 2020.
Source: bfin.brvm.com, CGF BOURSE analyzes
In March 2020, the SONATEL share was down 3.5% and ended at a value of 13,500 FCFA, its lowest level in the last five years (during the first weeks of January 2014, it quoted between 20,000 and 20,500).
Experts believe that the value of 13,500 FCFA, the SONATEL share broke its resistance threshold, because it is a historically low value.
However, in terms of prospects, subject obviously to major events which may modify the course of activity in its countries of operation, the SONATEL group plans, among other things, to maintain growth in turnover; continued growth in Ebitda; a return to a dividend growth policy from 2021.