While in June 2020, it closed a loan of 100 billion FCFA to support its investments, the telecoms group Sonatel found itself with 38 billion FCFA of cash in addition, due to a decrease in its capital expenditure.

Over the first 9 months of 2020, the telecom operator Sonatel managed to increase its cash reserves by 38 billion FCFA (+19.2%), despite a 2% drop in its net profit, can be seen from financial communications published by the company on the BRVM website.

Its managers explain this situation by the reduction in capital expenditure over the same period, but also the achievement of good operating margins. Sonatel benefited from several favorable factors.

There has been an increase in its customer database to 34.4 million people, an increase in users of its Orange Money service to 7.9 million active subscribers, up 25.5%. Thus, its turnover for the period reached 895 billion FCFA up 3.5%.

The reduction in investments over the period under review may however seem contradictory, because in June 2020, Sonatel mobilized 100 billion FCFA on the WAEMU capital market, with the intention of making new investments.

It is not excluded that the company is in the process of building up a maximum cash reserve to meet its future commitments. The company operates in a mature and highly competitive market; which does not make it possible to achieve the strong growth in the meantime.

In the information note of the June bond issue, the group planned to achieve a consolidated net margin of 18.5% over the year 2020. However, compared to the current performance, we are only at 15.6%. In addition, Sonatel is in the process of fulfilling its promise of free cash with a current ratio of 26.3% against 25.1% expected.