Casablanca Stock Exchange: Profits for listed companies descend by 35.5 percent in 2020.

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According to BMCE Capital Research, the profit pool of companies listed on the Casablanca Stock Exchange stood at 17.4 billion dirhams (MMDH) last year, a 35.5 percent decrease from 2019. (BKR). profit pool of companies listed on the Casablanca Stock Exchange stood at 17.4 billion dirhams (MMDH) for the past year, down sharply by 35.5% compared to 2019, according to BMCE Capital Research (BKR).

“Having suffered from the operational effects of the health crisis as well as the impact of voluntary contributions to the Covid-19 Fund, particularly for financials (51.8 percent of total contributions), the overall beneficiary capacity is deteriorating by 35% to 17.4 billion dirhams,” says the research firm in its analysis document ” Earnings FY.”

Excluding the impact of these contributions, which amount to 4.2 billion dirhams net, the overall net profit attributable to the group (RNPG) would fall by 20% to 21.6 billion dirhams, according to BKR analysts.

This decline is also due to the poor performance of Ciments du Maroc which lost 365 million dirhams in its Bottom-line given the decline in its commercial achievements coupled with the recognition of a donation of 100 million dirhams to the Covid-19 Fund and Marsa Maroc suffering from the double effect of the donation of MAD 300 million paid for the benefit of the Special Fund for the management of the pandemic and the net deficit generated by the new subsidiary Tanger Alliance.

Shaken by the deterioration of the global economic context, the net income of financials fell by 56.7 percent to 5.5 billion dirhams, primarily due to an increase in general operating expenses, which included donations to the Covid-19 Fund for a total impact of 3.5 billion dirhams, and, on a larger scale, a decrease in the cost of risk (+ 2.4x to 17.7 billion dirhams).

The Insurance / Brokerage sector’s earning capacity fell by 23.3 percent to 1.2 billion dirhams, owing to a drop in net income at Wafa Assurance (-245 million dirhams) and Saham Assurance (-205 million dirhams), primarily due to financial market underperformance and the suspension or reduction of dividend payments from subsidiaries.

The document also shows that the profit growth of the BKR 40 scope of BKR (i.e. 90% of capitalization and restated for securities that have not published their net profit) is down by 30% against an expectation of -17.2%. for the latest adjusted forecast from the research firm, a completion rate of nearly 86%.

This rate covers a 72 percent realization rate for financials, owing to the banking sector’s observation of higher-than-expected provisions in 2020, resulting in a sharp increase in the cost of risk and a net income generated by insurance companies exceeding the BKR forecast by 27 percent, owing to an exceptional catch-up in the second half of 2020 for Wafa Assurance’s net income.

It also covers a difference of 12% compared to BKR’s forecasts for the industrial rating, which is primarily explained by the non-anticipation of the loss made by Marsa Maroc’s subsidiary (Tanger Alliance) and the recognition of provisions by the real estate sector for depreciation of assets showing significant losses in 2020.


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