15 Feb 2021
CIEL delivers strong operational performance across all its clusters except for its tourism activities which continue to weigh on the Group’s results
CIEL published today its results for the first semester ended 31st of December 2020. The Group is demonstrating tangible recovery from the unprecedented disruption caused by the coronavirus pandemic outbreak nearly a year ago. While the Hotels & Resorts cluster will continue to weigh on the Group’s profits until the complete restart of the industry, CIEL’s positioning in international markets and strategic segments shows strong operational results, particularly from its Healthcare and Agro & Property clusters but also its Finance cluster.
Revenue totalled MUR 9.15bn. This 1.5% increase over the second half of the prior year shows the Group’s gradual recovery from the impact of the global pandemic with growing revenue from the first to the second quarter in the Finance and the Healthcare clusters in particular. This compensates for the continued weakness of the Hotels and Resorts cluster strongly affected by the closure of borders.
Earnings before Interests, Taxation, Depreciation, Amortisation and Reorganisation costs stood at MUR 986M, leading to a double-digit EBITDA margin of 10.8%. The Textile and Healthcare clusters delivered further profitability increase on the second half of last financial year. The Hotels and Resorts cluster benefitted from the reopening of the Kanuhura resort in the Maldives since 15 November 2020.
Loss after taxation of MUR 450M. This is a marked (+MUR 2,508M) improvement from the MUR 2,958M loss incurred in the second half of last financial year which included impairment of MUR1,913M (financial assets, non financial assets and goodwill), reorganisation costs of MUR 108M and impairment of associates of MUR109M, primarily incurred by the Hotels and Resorts, Textile and the Finance clusters. All clusters posted profits after tax in the first half year under review, except the Hotels and Resorts cluster which however significantly lowered its cost base. Loss attributable to owners stood at MUR 158M (2019: Profit attributable to owners of MUR 368M).
Net cash from operating activities rose to 24 % of revenue in the period under review from 16% in the prior year period. With cash management, tight control over working capital and capital expenditure optimisation remaining a priority, a higher Free Cash Flow of MUR 854M, was achieved as at 31 December 2020, MUR 159M above the prior year. Capital expenditure at the Hotels and Resorts as well as the Textile clusters were substantially reduced compared to the year ago.
Net interest-bearing debt, most of which comes from the Hotels and Resorts cluster and is not guaranteed by the Group, fell marginally to MUR 16.8bn from MUR 16.9bn as at 30 June 2020 with a gearing ratio of 48.1%.
Commenting the results, Jean-Pierre Dalais, CIEL Group Chief Executive said: “Our results for the first semester illustrate our ability to rebound in a global environment deeply disrupted by the health crisis. Considerable adaptation efforts have enabled us to significantly reduce our costs which will certainly contribute to the recovery of our profitability once the uncertainties weighing on the tourism industry will be lifted. In addition, our long-term investments in promising sectors such as healthcare, finance and textile, and in high-potential geographic areas such as Africa and India, have enable us to mitigate the impact of the crisis and we intend to make the most of these profitable and responsible growth drivers.”
CIEL Textile had a remarkable rebound from the pandemic and is well poised to benefit from a shift in customer sourcing away from China
The cluster recovered from the second half of the prior financial year: its EBITDA margin was a healthy 11.4% in the period under review, a 1.7 percentage point gain over the same period in prior financial year supported by significant progress in Madagascar and India. Profit after tax stood at MUR 249M despite reorganisation costs of MUR 90M absorbed over the last quarter. With a diversified product mix and competitive geographic positioning, the cluster was able to capture the incremental growth opportunities offered by e-commerce and casual wear.
CIEL’s Finance cluster shows resilience although its results have been impacted by higher provisions taken in the current context
The Finance cluster’s banking operations’ in Madagascar – BNI Madagascar SA – displayed healthy balance sheet growth, strong foreign exchange revenues and continued progress on the digital banking front in Madagascar in particular. Good cost containment helped mitigate the impact of higher impairment charges under IFRS 9 – Financial Instruments. The cluster’s results have also been subdued by impairment charges and higher provisions at Bank One, in line with the cluster’s cautious approach to risk management. Bank One is supported by a high capital adequacy ratio and a strong liquidity position. The cluster’s EBITDA margin was resilient at 26.1% in the first half year, against 32.4% in the prior year period. Sequentially, profit after tax rose substantially in the first half-year from the low level recorded in the second half of the prior year.
CIEL’s Healthcare cluster on a significant growth trajectory with profits driven mostly by C-Care’s operations
The Healthcare cluster delivered another improvement in EBITDA margin: it stood at 19.5% as at 31 December 2020 against 12.8% in the first half and 14.7% in the second half of the prior year. The performance was primarily driven by sustained growth at C-Care (Mauritius) Ltd’s (‘C-Care’) resulting from increased activities in both clinics and the laboratories. The operations in Uganda reported an increase in occupancy rate due to higher COVID-19 admissions.
The Agro & Property cluster posted good results on the back of higher sugar price in Mauritius and Tanzania with higher production and sales volumes in Kenya
The Agro & property cluster restored its profitability as results after tax rebounded significantly in the first semester from the corresponding period of the prior year, owing to the good performance of Alteo Group (‘Alteo’). Alteo’s sugar operations performed well on the back of enhanced sugar prices in Mauritius, resulting from the depreciation of the Mauritian Rupee, a better average price in Tanzania while reporting an increase in production and sales volume in Kenya. Furthermore, the finalisation of a higher number of sales deeds at Anahita, compared to prior year resulted in higher property revenue for the semester.
The Hotels & Resorts cluster remains heavily impacted by the COVID-19 crisis despite cost saving efforts and continues to weigh on CIEL’s results
The Hotels and Resorts cluster’s results continue to be significantly affected by the strict border restrictions in Mauritius requiring a 14-day quarantine until 31 March 2021 given the persisting uncertainties regarding the evolution of lockdowns in Europe and South Africa in particular. At SUN Limited (‘SUN’) level, minimal revenues have been generated from the partial reopening of resorts for quarantine purposes and for the Mauritius market during weekends, holidays or special events. Kanuhura in the Maldives has shown an encouraging momentum since reopening on 15 November 2020 as stronger sales and marketing drove a significant increase in the Average Daily Rate. Occupancy for the month of December was very encouraging despite significantly lower arrivals in that country compared to prior years.At the SUN group level, operating expenses have been considerably lowered since the pandemic outbreak, including a significant reduction in fixed costs and overheads. In addition, SUN has launched a number of initiatives to diversify and increase revenue streams such as a new offering for long-term business stays. Furthermore, Mauritius Investment Corporation Ltd has committed to subscribe for redeemable and convertible secured bonds, totalling Rs 3.1 billion rupees.