Somocer Releases First-Half 2025 Financial Statements
The Modern Ceramic Company, Somocer, has published its financial statements for the first half of 2025. The company achieved a turnover of 29,153 MTND, a 6.4% decline compared to the same period last year. This decrease is attributed to the illegal importation of low-cost construction materials, particularly from India, which has led to a significant drop in sales prices on the local market.
Operating Expenses and Financial Performance
Operating expenses decreased by 7.2% to 36,991 MTND, mainly due to stock variations. However, this situation reveals an imbalance, with a negative operating result of -7,494 MTND (-8,368 MTND as of June 2024). The EBITDA is also negative, at -2,506 MTND.
Debt and Financial Challenges
The company's heavy debt continues to penalize its profitability, with net financial expenses of 9,613 MTND. Total loans amount to 68,184 MTND as of the first half of 2025, and bank loans total 13,269 MTND. Nevertheless, the Cash Flow has been established at 23,660 MTND, compared to 32,938 MTND the previous year. Somocer has faced operational and financial difficulties since 2022, which have impacted its debt level. Furthermore, the increase in customer default rates and significant payment delays compared to contractual schedules have increased the company's cash needs.
Cumulative Losses and Recovery Efforts
These factors, combined with others, have resulted in cumulative losses totaling 53,084 MTND as of June 2025, taking into account the loss recorded during the first half of 2025, which amounts to 17,579 MTND. To address this situation, Somocer has undertaken several actions to quickly regain balance. Meetings have been held with authorities and administrations to request strengthened control over illegal imports. Internally, the product range has been expanded, including economic products, and commercial teams dedicated to certain promising sectors have been reinforced.
Improved Management and Financial Restructuring
Unpaid debts are now better managed, thanks to the limitation of payment credits to customers with payment incidents and the strengthening of the guarantee realization system for defaulting customers. The last few months have seen the resumption of raw material imports from Ukraine, and new supply circuits (Spain, Turkey, Algeria) have been identified to address shortages and price increases of raw materials from traditional suppliers.
Financial Restructuring and Cost Optimization
On the financial side, the company has diversified its banking relationships to secure new financing sources at an acceptable cost. Negotiations are also underway with other financial institutions to reschedule other bank debts. Additionally, cost optimization actions are being implemented, including voluntary departure plans for staff. An agreement has been reached with Steg for a rescheduling of unpaid debts over 5 years, for a total amount of 15 MTND. Similar agreements have been made with the tax administration (for 52,675 MTND) and the CNSS (1,893 MTND).
Business Plan and Future Outlook
Based on these elements, management has established a business plan for the period 2025-2035, which estimates that the company will be able to honor its commitments and improve its financial situation. On the market, the stock has shown a positive return of 7.32% since the beginning of the year, and we believe that these advances could give an additional boost to the stock price, although it will take many years to erase historical losses.
