Thursday, January 21, 2021

Côte d’Ivoire: SMB’s equity investors eye govt’s planned road projects

(Ecofin Agency) – The announcement by the Ivorian President, Alassane Ouattara, of plans to asphalt 1,331 km of roads in his country in 2021 is prompting interest from investors who hold the 16.5% shares of the Multinational Bitumen Company (SMB) on the Abidjan-based WAEMU Regional Stock Exchange (BRVM). With these projects to come, investors forecast an increase in SMB’s revenues if the company reaches a deal with the government.

“Last year, the country completed the construction of several new asphalt roads, including Tiébissou – Didiévi, Boundiali – Odiénné, Odienné – Gbelegban, Ferké – Kong, Agboville – Cechi, Bouna – Doropo – Burkina border, Divo – Guitry – Coastal, and Danané – Guinea border,” an official document revealed.

This increase in road investment was accompanied by an improvement in the financial performance of SMB, although a correlation is not established. As of September 30, 2020, when the company published its financial report for the first 9 months of the year, its revenues were CFA79.5 billion, up 4% compared to the same period in 2019.

The initial budget of Côte d’Ivoire for FY2021 does not specify the number of investments that will go for this road asphalting project. The finance act just reveals commitment credits of nearly CFA410 billion for road infrastructure and engineering structures.

It should be recalled that between 2015 and 2019, SMB achieved an average turnover of CFA113.27 billion. The results of the annual financial year 2020 are not yet available.

It remains to be seen whether the company, which is 83.5% controlled by the Ivorian Refining Company, will resume dividend distribution, after the year 2019 with no rewards for its shareholders.

Idriss Linge

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