(Business in Cameroon) - Cameroon’s mineral water company Semc saw its net profit down over 42% during the 2022 fiscal year. The figure was CFA504.9 million over the period under review and CF872 million the previous year.
However, while its profit declined, the company witnessed an increase of 6% in its turnover from CFA9.9 billion in FY2021 to CFA10.4 billion in FY2022. This is the fruit of the efforts made by Semc in recent years to regain market share, thanks in particular to its Vitale brand, launched in 2017 alongside Source Tangui, its premium brand.
Semc's retained earnings at December 31, 2022, show a negative balance of CFA655.9 million, compared to CFA1.5 billion at the end of 2021, according to the balance sheet approved by PwC and ECA-Ernst & Young. This means that the entire profit made by Semc has been allocated to this item, resulting in another year without dividends for its shareholders, the 8th consecutive year.
Clearly, despite returning to profitability in 2019 after three consecutive years of losses (-CFA316 million in 2016, -CFA 936 million in 2017, and -CFA 799 million in 2018), Semc has yet to regain its former glory. Indeed, the mineral water market in Cameroon is now increasingly competitive. This situation has led the Castel group, Semc's parent company, to reconsider the possibility of disposing of assets (as is already the case in Morocco and Côte d'Ivoire) in the medium to long term.
“If we find an acquirer in the next 5 to 10 years, we will probably sell our mineral water unit,” Stéphane Descazeaud, MD of SABC, Castel’s local brewing arm, said in an interview with Ecomatin. According to him, the production and marketing of the Vitale and Source Tangui brands were no longer truly profitable for the Castel Group due to intense market competition and the increase in fuel costs that occurred on February 1, 2023. "SEMC (the mineral water unit) is operating in an extremely competitive market environment and the recent increase in fuel prices is not making things better. The water segment is a business of logistics and transportation without much added value,” Descazeaud said.