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Four Moroccan Firms Warn of Drop in Profits

Four Moroccan Firms Warn of Drop in Profits

Monday, 11 March, 2019 - 10:15
Bottles of Sidi Ali are seen in a supermarket in Rabat, Morocco, May 1, 2018. Picture was taken May 1, 2018. REUTERS/Youssef Boudlal
Casablanca - Lahcen Mokena
Four companies listed in Casablanca have recently warned of a drop in profits felling short of estimates.

Sonasid, a steel manufacturing company, revealed its net profits will see a 39 percent decline in 2019 compared to 2018 due to several factors, including the rise in the cost of production material and the drop in the prices of products globally due to high competition resulting from the trade war.

In a statement, Sonasid indicated that last year witnessed a rise in the prices of production input of steel manufacturing especially cathodes. The Moroccan market is undergoing a relapse in demand amid a surplus in production capabilities, noted the firm.

As for export markets, Sonasid clarified that it has suffered from the repercussions of the US-China trade war. It added that multiple markets took protective measures similar to the US, which increased customs duties 25 percent.

Such measures have increased competition on unprotected markets, and consequently dropped product prices.

Les Eaux Minérales d’Oulmès, affiliated with Holmarcom Group and specialized in marketing mineral water, also expected a ‘remarkable’ drop in its annual income mainly due to the boycott of its ‘Sidi Ali’ product since April 23, 2018.

The mineral water market in Morocco has witnessed a 10 percent drop in its sales last year, the company said, adding that this has compelled it to revise its commercial policy to cope with changes in consumer behavior.

The firm said it launched new brands and forged partnerships with Suntory Beverage & Food (SBF) to introduce new beverages to the Moroccan market.

As for Fenie Brossette, it announced that it no longer practices some activities in Morocco and West Africa including the exclusive rights to distribute brands New Holland, Iveco and Astra due to ‘weak outcome’.

The company said it intends to refocus strategically in new industrial sectors.

It launched its operations in the Mauritanian and Ivorian market for exclusive distribution of New Holland and Iveco but the firm incurred huge losses after a USD2 million deal to sell 20 trucks in 2015 to a firm in Ivory Coast went wrong.

The firm’s results in 2018 were also affected by a taxation overview on the period between 2013 and 2016.

Finally, Wafa Assurance expected a 25 percent drop in its 2018 earnings compared to 2017 due to a rise in the cost damages incurred in road accidents.

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