Roundup: Tunis Stock Exchange tv_user June 7, 2023
Roundup: Tunis Stock Exchange

Roundup: Tunis Stock Exchange

It’s disclosure time here in Tunis. We run the numbers as most listed companies have published their 2022 audited figures amid a better performance of the stock market:

Tunis Stock Exchange’s main index Tunindex

has taken a downward trend at the start of the year under pressure of the sovereign risk’s downgrading by Standard & Poor’s. Then came the disclosure season and the robust earnings forecasts in April 2023 to push the main stocks up and lift the index to positive grounds +2.08% year to date. The average daily volume stayed at 11m Tnd (3.3 million US Dollars) boosted by a strong wave of foreign buying in the block trade compartment on two stocks:

The first was a block trade on a majority stake in SOTIPAPIER the leading cardboard and cement sacks producer worth 56.8mTnd (17.2million USD) by a South African buyer. The second is a major transaction on the Tunisian leading brewery and all drinks company SFBT by a French buyer. SFBT traded in a single block 17.6mTnd (5.3million USD) sending the total foreign inflows number to 74.4million Tnd (22.5 million USD) excluding trades in the main market.

On the disclosure front BIAT BANK published its audited figures for 2022: The leading banking group has seen its Net Banking Income hit a new record high at 1.3 billion Tnd (394 million USD) up 24.4% year on year. The bank’s total deposits grew 5.8% year on year to reach 17.2 billion Tnd while the loans’ growth has registered a milder pace at 1.2% to reach 12.3 billion Tnd. Bottom line, the bank has reported a 12.3% growth in earnings year on year at 300 Million Tnd (90 million USD). In consolidated terms the number one banking group’s Net Profit ex-minorities stood at 312.4mTnd which means a 10.2% growth from 2021

The mortgage specialist BH Bank has also published its 2022 audited financials with earnings at 118.7mTnd (36 million US Dollars). The bank will pay 1.2Tnd per share dividend pending approval from the Tunisian Central Bank.

The Aluminium fluoride (ALF3) producer ICF has benefited from a strong come back of ALF3 demand in the Metal Exchange. The company’s earnings have jumped from 9mTnd in 2021 to 31.1mTnd in 2022. ICF will pay 7.5Tnd dividend per share ex-date July 4th, 2023.

The leading milk and dairy producer Delice Holding has released its 2022 audited financials with sales hitting a new record at 1.266 billion Tnd (363 million USD) from 1.164bn Tnd in 2021(8.8% growth year on year). Sales growth in the domestic market has reached 11.5% to 1.109bn Tnd versus 995 million Tnd in 2021 while exports dropped 29% to 29 million Tnd. Operating charges have reached 1.185 billion Tnd  in 2022 versus 1.102 billion Tnd in 2021 meaning a 7% growth year on year including 921.6million Tnd in procurements and 99 million Tnd in payroll. Operating income has thus stood at 99.3million Tnd versus 83.2million Tnd in 2021. Bottom line, the company’s net profit ex-minorities has reached 78.5million Tnd (23.7million USD) up 11.6% from 2021 (70.3m Tnd). The company will therefore raise its dividend per share from 0.37Tnd in 2021 to 0.40Tnd per share in 2022. AGM on June 8th, 2023

SOTUVER traded volumes on SOTUVER stocks have surged from almost half a million US Dollars in January 2023 to more than 3mil USD in May 2023 and there is a reason for that. The share price has gone up 7% year to date on news that the main shareholder in the company (BAYAHI family office) has announced its intention to sell a 30% stake in the market to enlarge the free float from 16% to 46%. In investors’ minds, the stake sale is an opportunity to increase liquidity on the stock and offer an interesting entry point for the big investors. On the disclosure subject per say, the glass bottles maker ’s revenues increased by 49% to TND159.9Mn thanks to surging local revenues (+40% to 64,4mTnd)   and the soaring exports ( +55% to 95,6mTnd),The new exporting entity “SGI”, expected to  start operations in the fourth quarter of 2022, should allow the group to record new levels of revenues and profitability from 2023 as it is fully integrated.  Held at 11% by SOTUVER SA, the net income group share would grow to a lesser extent ( as it takes into account 11% of the profits of the new entity until 2026, when the Venture capital Investment companies would exit the capital of the SGI). Given the glass maker’s attractive valuation levels ( trading at 10,7x its 2023e PE and 7,2x 2022e EV/EBITDA) and the group’s good short-term prospects thanks to the return on investment of the new exporting entity, we keep our opinion unchanged: “Buy” .

SAH LILAS: the outstanding earnings performance of the personal care group in 2022 (LILAS has more than doubled its earnings year on year) came to naught! The share price performance stayed almost stable as the overhang of a foreign seller has put too much pressure on the stock. On the group’s numbers per say: Lilas has published its results for the 2022 financial year, combining growth and profitability. The national champion in hygiene products saw its turnover soar by 29.6% to 868.8mTnd, thus outperforming the forecasts of the business plan unveiled in July 2022 by 20%. The Group’s regional sales have largely contributed to this performance soaring by 46.4% to 337.7mTnd. The income of the parent company also held up well, growing by 20% to 483.7mTnd. The increase in consolidated revenues was also driven by Azur Papier (specializing in the production of cellulose wadding) whose revenues (restated for inter-group sales) reached 106.4mTnd at the end of December 2022. Such growth is explained, among other things, by the entry into operation of the second line of Azur Paper. Net sales of Azur Détergent reached 167.6mTnd, i.e. an overall growth of 18.3%. Also, total exports of detergents have more than doubled between 2021 and 2022. The resumption of growth in sales of the Libyan subsidiary is confirmed with an overall annual increase in revenues of 52.3% as of December 31, 2022 compared to 2021. Sales from SAH Algérie reached 52.5mTnd, an annual growth of 17.8%, thus representing 6.1% of the group’s sales. Sales of the sub-Saharan subsidiaries, SAH Côte d’Ivoire and SAH Senegal increased by 8.6% and 98.6% respectively as of December 31, 2022 compared to December 31, 2021.

The distribution of consolidated net income (restated for inter-group sales) by subsidiary shows that SAH Tunisie contributes 55.8%, followed by Azur Détergent and Azur Papier whose sales represent 19.4% and 12.3% of overall sales, respectively.

The Group posted a contrasting evolution in terms of its margins in 2022. While the gross margin rate fell slightly by 1.7 percentage points to 39%, affected by the rise in raw material prices not fully passed into its sales prices, the EBITDA margin showed a good resistance during a strained economic situation. Reaping the benefits of efforts to control costs (particularly payroll, which increased by almost 12% to 76.7mTnd, i.e. a rate well below that of sales), the EBITDA margin recorded an increase of 0.3 percentage point to 15.5%.

In 2022, the Group reached a new level of operating profitability. Consolidated EBITDA climbed by 31.8% to 134.9mTnd (against 125.2mTnd initially budgeted) and operating income recorded a sharp increase of 59.9% to 81.6mTnd.

Over the past year, the Group has somehow controlled its net financial expenses. Despite the upward context of rates in Tunisia and in the markets where the Group operates, the latter fell by -5.3% to 37.4mTnd, benefiting in particular from a decrease in foreign exchange losses (foreign exchange losses fell from -5.3MDt to -1.7MDt).

The good orientation of the operating activity and the control of expenses have enabled SAH to significantly consolidate its profitability. At the end of 2022, the Group generated net income ex-minorities of 35.3mTnd (compared to 16.2mTnd in 2021), in line with management forecasts.