SAPH CI posted sound financial results for the first quarter of 2022. However, the result is not yet showing in its share value. An analysis posted by Socfin gives clues to what may be wrong. 

From January 2022 to date, BRVM-listed Société africaine de plantation d'hévéas (SAPH CI)’s share value has risen by 5.87% according to data gathered by Ecofin Agency.  This is significantly lower than the 271.07% increase in the company’s share value in 2021. 

There are still seven months to go before the end of the year but, the evolution in the rubber producer’s share value seems not to point at any significant up movement soon.  This year, the highest percentage increase in the share value (7.65%) was recorded during the May 13 trading day. For many media, it was a record daily rise in the past nine years. On May 24, it plunged by 7.46% printing its worst performance since the beginning of the year. Nevertheless, its recently published financial report demonstrates sound financial fundamentals.

For Q1-2022, SAPH CI posted a XOF3.7 billion (US$6.5 million) net profit, up by 143%. Its turnover rose by 8% quarter-to-quarter (to XOF50 billion) while its revenues from ordinary activities rose by 143%. In 2021, the firm recorded a XOF21.1 billion, up by 52.4% compared with the XOF8.4 billion it posted for 2020. Therefore, the current development in its share value may not be related to financial performance. 

In an analysis published at the end of Q1-2022, Luxembourg-based company Socfin indicated that between January 1 and April 30, 2022, the price of natural rubber rose by 5.7% year on year due to the global economic recovery. In mid-March, prices started dropping because of several factors. First, China, the leading rubber buyer worldwide, reduced its demand. In addition, in late April 2022, global rubber production went up by 13.6%, oversupplying the market. The analysis could explain why investors are cautious about SAPH CI and the volatility in its share value.  

Let’s note that Côte d’Ivoire is the leading rubber exporter in Africa and fourth-leading producer worldwide. Rubber is also the second source of foreign earnings in the country’s agriculture sector. 

Chamberline MOKO