15 May 2018

    At MUR 16.9bn, Group revenue for the nine months rose by 10% while Earnings Before Interest, Tax, Depreciation and Amortisation (‘EBITDA’) remained at par with prior year at MUR 2,366M leading to an EBITDA margin of 14.0% (2017: 15.2%). 

    Group Profit after Tax (‘PAT’) for the first nine months was MUR 925M(2017: MUR 1,013M) explained by the different performances of the Group’s five clusters below:

    • The Textile cluster’s results were impacted by the lower performance of the Woven segment due to fierce competition in retail markets causing pressure on margins and volumes. The depreciation of the US dollar and the reduction in India’s duty drawback scheme (export incentive) also affected the cluster results. Though still loss-making, the Knitwear segment showed improvement compared to prior year with a higher contribution from its operations in Bangladesh and the continued progress of Floreal Knitwear’s new industrial plant in Antsirabe, Madagascar. While the Knits segment’s activities in the region have performed well, the focus is on its new production plant in Coimbatore, India which is taking longer than anticipated to improve.

    • In the Hotels & Resorts cluster, SUN showed a marked improvement in the first nine months over prior year with revenue up 15% and an EBITDA margin growth of 2.6 percentage points. Following the rate growth strategy in place, SUN achieved a rise of 20% in the average daily rate(‘ADR’) and an 11% increase in total revenue per available room(‘TRevPAR’). Coupled with a stable cost base, SUN’s overall profitability climbed by MUR 316M to reach MUR 396M. Kanuhura, Maldives, also presented encouraging progress with a higher occupancy in the March 2018 quarter although it had an adverse impact on the nine months’ results of SUN.

    • The Finance cluster saw a slight decline in profitability in the first nine months compared to last year mainly explained by the lower results of its fiduciary operations – MITCO Group. However, the Banking activities of the cluster – Bank One notably – contributed favourably to the overall results.

    • The Agro & Property cluster continued to be adversely affected by Alteo’s operations where the reduced sugar cane availability in Kenya and the low price of sugar in Mauritius have driven results down. The fall was partially mitigated by the positive contribution of TPC Limited, Tanzania and a favourable gain on sale of land at Alteo Limited and Ferney Limited.

    • The Healthcare cluster, though negatively impacted by the losses of Wellkin and the lower performance of International Medical Group (‘IMG’), Uganda, in the first nine months, displayed improvement in the March 2018 quarter compared to prior year. The reorganisation plan at Wellkin and the recent measures implemented at IMG are slowly starting to bear fruits in addition to the sustained track record of Fortis Clinique Darné (‘FCD’).

    CIEL Group’s profit attributable to ordinary shareholders stood at MUR 366M (2017: MUR 409M) for the nine months under review.

    At Company level, the Net Asset Value (‘NAV’) per share stood at MUR 8.73 as at 31 March 2018 - down 6.8 percentage points from MUR 9.37 as at 30 June 2017 - reflecting mainly the fall in the share price of Alteo Limited, the reduction in value of the investment portfolio of the Healthcare cluster and the takeover of CTL financed by debt together with the issuance of ordinary shares at CIEL level.

    The Group has been adversely affected by the difficult market conditions in the Textile and Agro industries. CIEL remains focused on optimising its current asset base and on driving operational efficiencies across clusters. This is demonstrated through the improved performance of SUN over the last semester and the encouraging results of Wellkin over the last quarter but the full benefits of the strategy are yet to materialise.