Breaking down earnings from BRVM Bourse

The telecom sector in the BRVM Bourse has been under scrutiny recently, with companies like Sonatel and Onatel facing challenges such as cost pressures and declining margins. Myriam Ouattara, Portfolio Manager at EDC Asset Management, provided insights into the 2019 earnings of these companies. Sonatel and Onatel recently released their financial results, showing a decrease in margins but still maintaining profitability. Sonatel, being the market leader, reported a net profit margin of 15% in 2019, while Onatel outperformed with a margin of 19%. Additionally, Onatel showed a higher return on equity at 34% compared to Sonatel's 30%. Both companies faced similar challenges including increased customer base, cost control measures, and heavy investments to uphold service quality amidst growing competition. The market saturation in Senegal and Mali, where these companies operate, poses a challenge for further mobile business expansion. However, the focus is shifting towards data services and other revenue streams to drive future growth. While mobile penetration rates are high, there is room for growth in internet services and data, which are emerging as key drivers in the telecom sector. Looking ahead, the telecom sector in the BRVM Bourse is expected to rely more on volume and invest heavily in new technologies to sustain growth. Companies like Sonatel and Onatel will need to adapt their market strategies to navigate through the competitive landscape and enhance their profit margins. Overall, the outlook for the telecom sector in the BRVM Bourse remains positive, with opportunities for growth in data services and internet offerings. Despite the challenges at hand, companies like Sonatel and Onatel are poised to capitalize on evolving market trends and continue their profitable operations in the region.