The value of the shares of Servair Abidjan, a company listed on the Regional Stock Exchange
(BRVM) of the UEMOA, progressed Friday, March 27, 2020 by 5.8%, putting an 11-day pause of
continual decline during which it fell by about 37%. No market indication justifies this
turnaround, but it is not excluded that the company is in the sights of certain investors who are followers of the
annuity strategy.
Indeed, based on the net dividend of 164.9 CFA francs paid on September 30, 2019, the value shows
currently yielding 16.5%. If we make the strong assumption that the same amount would be paid this
year or even that a higher dividend would be paid to shareholders, the current value of the shares offers
therefore a possibility of significant return for those who would currently invest in it, with a horizon of
short or medium term.
A rising dividend is not impossible. At the end of the first half of 2019, the turnover of
the company was close to 6 billion FCFA and represented an increase of 8.1% compared to that of
the same period in 2018. Under these conditions, the net profit of 797.7 million FCFA was up by
almost 40%. If the trend had continued, the result for the 2019 financial year should improve
substantially.
It must be said, however, that this volume of business was supported by intra-group activities and those
operated outside aircraft supply. The long period of decline should be put in the context of the
closure of the borders and therefore of the Abidjan International Airport which would have given rise to
investors, a prospect of lower revenues, and therefore margins.
Côte d'Ivoire like many countries in Africa has closed its air borders with several countries
of the world. In addition to supplying staff with meals and cleaning aircraft, Servair Abidjan
has been developing non-airport catering services since 2012. But the activity restrictions imposed in
Côte d'Ivoire also reduce business opportunities there.
Beyond Servair Abidjan, it is all of the 8 subsidiaries in Africa in the same sector of the company
Gategroup Holding based in Zurich, Switzerland, who are facing these challenges generated by the coronavirus.
Recall that Gategroup itself is controlled by the Singaporean sovereign wealth fund Temasek and RRJ
Capital, an Asia-focused private equity firm that manages several US pension funds.