EXECUTIVE SUMMARY
A better-than expected dividend..., despite a less favorable context
A significant drop in activity following the decline in coal prices
In 2020, TAQA Morocco recorded a consolidated revenue of MAD 7,789 Mn down -14.6%. This is mainly explained by the -24.1% drop in energy costs following the decline in international coal prices (i.e. -17.0% in 2020). In parallel, the operator’s power costs fell by -7.0% during the same period to MAD 3,949 Mn.
In addition, it should be noted that the overall availability rate of Units 1 to 6 reached a record level in 2020, i.e. 95.2% versus 92.9% in 2019.
Operating income in line with our forecasts
In terms of profitability, TAQA Morocco shows achievements relatively in line with our forecasts.
This is an EBIT down -7.5% to MAD 2,359 Mn in 2020 against an AGR forecast of MAD 2,375 Mn. Note that this variation takes into account the major overhaul of Unit 5 in Q4-19.
Taking into account a decrease of MAD 43 Mn in financial income, the Group's NIGS recorded a sharper decline of -16.5% to MAD 880 Mn in 2020 against an AGR forecast of -11.8%.
A solid dividend policy in 2020
TAQA Morocco has preserved its distribution policy through a payout above 100%. To this end, the operator proposes the payout of a DPS 2020 of MAD 35 against MAD 36 in 2019. This level is 9.4% higher than our initial forecast of MAD 32. Based on the stock’s current price, the D/Y stands at 3.7% offering a spread of 181 BPS compared to the 5-year T-Bonds.
A major overhaul of Unit 6 in Q1-21
At the release of its 2020 annual results, TAQA Morocco announces the completion of a major overhaul of its Unit 6 during Q1-21, for an estimated period of 70 days. Taking into account that the fiscal year of JLEC 5&6 is from October 1st to September 30th, the impact of this overhaul would be visible on the Group’s achievements in Q2-21.
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