28 Sep 2018

    CIEL Limited (‘CIEL’) is a diversified investment group headquartered in Mauritius, with interest in five sectors, namely Textile, Hotels & Resorts, Financial Services, Agro & Property and Healthcare, present across Africa, Asia and the Indian Ocean. The figures presented for the year ended 30 June 2018 are not directly comparable with prior year due to the acquisition of Wellkin Hospital (‘Wellkin’) within The Medical and Surgical Centre Limited Group (‘MSCL’) in January 2017, the closure of Kanuhura Resort and Spa (‘Kanuhura’) within Sun Limited (‘SUN’) until December 2016 and the increased stake in CIEL Textile Limited (‘CTL’) from 56.31% to 88.48% in August 2017. During the year ended 30 June 2018, the Group’s prior years audited financial statements were restated mainly as a result of the re-statement of the audited financial statements of Alteo Limited (‘Alteo’), the alignment of the deferred income tax rate to 17% (inclusive of 2% CSR) and the correct accounting treatment for sale and finance leaseback transactions of the IHS rooms in the Hotels & Resorts cluster. Group revenue for the year under review increased by 9% to MUR 22.6bn (2017 Restated: MUR 20.7bn) while Earnings Before Interest, Tax, Depreciation and Amortisation (‘EBITDA’) rose to MUR 2,953M (2017 Restated: MUR 2,845M) leading to an EBITDA margin of 13.1% (2017 Restated: 13.8%). Group Profit after Tax (‘PAT’) for the year was MUR 1,090M (2017 Restated: MUR 1,120M) – a slight fall explained by the different performances of the Group’s five clusters below: • The reduced profitability of CTL compared to prior year on account of the lower contribution from its Woven segment. The cluster’s activity has been impacted by the lower competitiveness of its regional operation in an environment of fierce international competition which is putting pressure on margins. The removal of export subsidies in India and a weak US dollar in the earlier part of the financial year also affected the results. The Knits Indian operations and the Knitwear regional segment remain loss-making. Loading and efficiencies of those factories are, however, improving and prospects are encouraging in a current challenging environment. • In the Hotels & Resorts cluster, SUN shows a marked turnaround compared to prior year by posting a profit after tax of MUR 194M (2017: (MUR 112M)). With the reopening of all its renovated hotels and the yield maximisation strategy adopted in recent years, the group revenue was up by 12% percent on prior year. The tight cost management control also contributed to an improved EBITDA margin. Management is currently implementing measures to address the difficulties of the Kanuhura resort in the Maldives which reopened late December 2016. Forward bookings are encouraging and should lead to improve the financial performance of this unique Maldivian asset in the coming quarters. • The Finance cluster posted yet another good financial year with a double digit growth in profitability mainly on account of the strong performance of the two banks within its portfolio. Bank One’s profitability was boosted in the last quarter of the financial year by a one-off cash settlement following resolution of an international court case. BNI Madagascar is still performing strongly in a challenging context for Madagascar with the forthcoming general presidential elections. • The Agro & Property cluster has been negatively affected by Alteo’s local operations due to the reduced export sugar price. The results were also driven down compared to prior year by the low sugar prices and the reduced sugar cane availability in Kenya. These negative impacts have somehow been mitigated by the commendable performance of its Tanzanian operations and favourable gains from sale of land together with a much improved performance of its property cluster. Last year’s result for the Agro & Property cluster included non-recurring gains from land revaluation of MUR 226M. • The Healthcare cluster, though still loss-making, showed distinct improvement on prior year. This year’s performance has been supported by the improved results of MSCL where Wellkin’s turnaround remains on track. Last year’s financial results were negatively impacted by a partial impairment of MUR 138M of its investment in Nigeria. CIEL Group’s profit attributable to ordinary shareholders stood at MUR 442M (2017 Restated: MUR 459M) for the year review. Earnings per share stood at MUR 0.27 (2017 Restated: MUR 0.30). This year’s Group result has been impacted by the textile cluster’s results and fell short of expectations. The Board remains confident that the important investment made by CIEL over the last few years will start generating improved EBITDA which in turn should create shareholders value in the medium term.


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