Carthage Cement held a financial communication on June 22, 2022 during which management reviewed the company’s achievements in 2021.
The cement manufacturer saw its turnover rise by 29% to 325.9 million dinars at the end of 2021. This turnover is below the objectives of the business plan presented by management last year, which relied on a turnover of 352 million dinars. The company posted a positive net result of 31.5 million dinars, representing a net margin of 10%.
According to the management’s Business Plan, the cement manufacturer’s valuation should stabilize at reasonable levels, i.e. a 2022e PE of 9.6x and a 2022e EV/EBITDA of 6x. At these valuation levels, Carthage Cement trades more expensive than the average of its regional and international peers.
The cement manufacturer was unable to achieve 100% of the proposed objectives of its advanced Business Plan during its capital increase in 2020, due to the crisis and the soaring cost of energy. However, it succeeded in its operational restructuring. Operating profitability will be there, but revised downwards in view of the prevailing inflationary context.
New business plan 2022-2026
During the financial communication, the board of directors of Carthage Cement presented a new business plan which spans the period 2022-2026 and which is based on the following assumptions:
- The cement manufacturer’s turnover should record a CAGR of 7.7% over the period 2022-2026.
- The gross margin rate should stand at 46.2% at the end of 2026, a level below the level posted in 2022 (49.1%) and far behind the margin level achieved in 2021 of 56%.
- The EBITDA margin will be between 34% and 37% over the study period.
- The company’s net income should be assessed at a CAGR of 20.7% to exceed the 100 million dinar mark from 2025 and stand at 102.9 million in 2026.
The new business plan, even if more realistic than the one presented previously, still seems challenging. Pending the achievement of the objectives of the company’s business plan, analysts at L’Intermédiaire en Bourse Tunisie Valeurs recommend to “keep” the stock with a positive outlook.
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Published on 06/24/22 09:33