Maroc Telecom profits down in first quarter

Morocco’s leading telecommunications company Maroc Telecom reported over the weekend that its revenues from the first quarter rose by just over one percent from the previous year, reaching MAD 7.5 billion (US$950 million). However, the company also said that despite the positive revenue growth, the overall profit dropped 7.2 percent from 2010.

The company said profit was at MAD 2.97 billion (US$380 million).

According to the company statement, the operating margin remained at a high level, at 39.5 percent, despite ongoing investment in the country’s networks and systems.

Maroc Telecom’s customer base also saw a 17 percent increase to 26.2 million customers.

According to the statement from the company, “the expansion reflects continuing growth in the mobile customer base in Morocco and strong marketing momentum in the subsidiaries, where the mobile customer base grew by 56 percent.”

Analysts say the slow growth and negative profit margins are a direct result of investment that the company is currently making, and that it will be only a matter of time before the company begins to report positive profit gains.

“I believe that what we are seeing is not the sliding of the company, but the beginning of the new Maroc Telecom that we should all keep an eye on in the next few quarters,” said analyst Hossam Bouaddin. He added that “we should expect large profits by the end of the year from the company and I would be shocked if it doesn’t happen.”

By Jonathan Terry