Investors in Africa do not usually have the logistics company Compagnie du Cambodge on their radars. And yet the company, controlled by the family of French magnate Vincent Bolloré, is one of the biggest on the continent. Compagnie du Cambodge’s share has also recently rallied - what is going on?
Capital News Africa: From the Trading Floor – Week 45-2022
Compagnie du Cambodge (ISIN: FR0000079659) is one of Africa’s most discrete companies. Indeed, one would guess by its name that it is not involved on the continent at all, but instead active only in south-eastern Asia.
But appearances can be deceiving: Not only is Compagnie du Cambodge a big logistics player in Africa, it is also listed on the Euronext exchange in Paris. It has amassed a market cap of EUR 3.2 billion.
Trading in the share, which is 99.2% owned by the family of French magnate Vincent Bolloré, is very rare owing to the small free float. That float of course totals a mere 0.8%, or 4478 shares. Between one and five shares change hands on a given day, and the current value of the free float is EUR 24.6 million.
As a result, Compagnie du Cambodge’s share price doesn’t normally budge. At the beginning of the year, it stood at around EUR 7175, which is about the level it was in the years 2013 to 2018. However, due in part to the severe market correction caused by the war in the Ukraine, the share declined almost 30% this year. In August, it was trading at an all-time low of EUR 5100.
But since then, the share has become rather actively traded, losing 4% of its value on one occasion and then recovering 12% on another. Compagnie du Cambodge’s current share price on Euronext Paris is EUR 5600.
The reason for the activity is a bit of a mystery. Compagnie du Cambodge has not released any new financial results for some time. The last time investors heard from it was on 30 September, when the logistics company unveiled its results for the first half of 2022 – it was the second company statement this year after the announcement of the 2021 results. In the first half 2022, net income was EUR 6.1 million compared to EUR 2.9 million a year ago.
Apart from logistics concessions in Vietnam, Sumatra and Malaysia, Compagnie du Cambodge operates railways in Burkina Faso and the Ivory Coast. These are primarily used for the transport of raw materials and other freight.
But as mentioned, Compagnie du Cambodge is also controlled by the Bolloré family through its holding company Bolloré SE. Bolloré SE is itself a huge French conglomerate, comprising media giant Vivendi and its prominent subsidiaries Universal Music and tv station Canal Plus.
Bolloré SE also controls the investment company Financière de l’Odet and Plantations des Terres Rouges, an operator of plantations in south-eastern Asia. Finally, the Bollorés are a big French publisher through their ownership of “Paris Match,” an influential magazine dealing with current affairs and the lifestyles of prominent people.
Vincent Bolloré turned 70 last April. Just two months before, he turned over control of the Bolloré family empire to his sons. His son Cyrille has taken over the logistics division of Bolloré SE, but, as we reported, is not as interested in Africa as his father.
Although Compagnie du Cambodge seems like a less important part of the Bolloré family empire, nothing could be further from the truth. The company is actually central to that empire, as it is a major shareholder in other Bolloré holdings, including Plantations des Terres Rouges, Bolloré Investissement and Financière de l’Odet. And as part of a complicated cross-shareholding arrangement, Plantations des Terres Rouges, Bolloré Investissement and Socfin have stakes in Compagnie du Cambodge.
Cyrille has not decided what to do about the Bolloré family’s African business. One possibility is that the family may divest more of their 99.2% stake in Compagnie du Cambodge. This would explain why the share has rallied somewhat.
Yet as long as the stock lacks proper liquidity, most investors will continue to pass over it. We believe that with the new generation at the Bolloré family empire, investors in Africa should closely follow what happens to Compagnie du Cambodge and how important Africa will, in general, be for the Bollorés.