Mauritian civil major Gamma sees profits dip 90% for 9 months ended Sept 30
According to the group segment information, ‘contracting’ which comprises the Roads, Building and Civil Engineering Divisions, sitting at the core of the group strategy, registered revenues of Rs 1.4 billion. (Image: Company)
Mauritius’ conglomerate Gamma Group has registered a 90% decrease in profit after tax to attain Rs 4 million for the nine months ended September 30, 2014 compared to the corresponding period last year when profits after tax amounted to Rs 41 million.
This drastic dip in profit is explained by the challenging environment in the construction industry, despite which the building material and cement businesses continue to deliver a significant proportion of the group profits.
Furthermore, Morning Light Co Ltd, which is an associate company of Gamma-Civic Ltd and owns the ‘Hilton Mauritius Resorts & Spa’ hospitality chain, has adversely impacted on the company group after it closed down on June 01, 2014, for renovation purposes, but has now re-opened for business.
In addition, the termination of the operations of Reel Mada SA, the Gamma national company in Madagascar, has also adversely influenced the profit margin of the Gamma Group, dragging down its financial results.
On the positive side, an increase of 11.7% in revenues was also registered at the end of the nine months ended September 30, 2014 when revenue amounted to Rs 3.72 billion compared to Rs 3.33 billion for last year at the same period.
According to the group segment information, ‘contracting’ which comprises the Roads, Building and Civil Engineering Divisions, sitting at the core of the group strategy, registered revenues of Rs 1.4 billion.
Lottery, which is also a group segment of Gamma, registered a strong financial performance at the end of the nine months ended September 30, 2014, notching up Rs 2.1 billion, which was however, below expectations.
Investments, which is related mainly to the Real Estate business and comprises a bank of prime land as well as some premium offices, registered revenue of Rs 110.1 million. However, according to the investments division, there is still substantial development that needs to be pursued in the forthcoming years to unlock its value.
Finally, ‘Corporate Services and others’ which is a category that is mainly related to the investment holding company, Gamma-Civic Ltd, registered a revenue of Rs 847.3 million.
In order to address the situation, the board has decided to closely monitor the situation, where subsequently Gamma will take further action if business conditions deteriorate.
Even through the alarming situation, the boards remains cautiously confident of their ability to grow earnings over the short to long term whilst continuing to create value for their shareholders.
For the nine months ended September 30, 2014 an increase in the share of profit of associates and joint venture was registered at Rs 1.01 million compared to Rs 9.2 million for the same period last year.
Total assets also grew compared to last year at the same period when total assets amounted to Rs 5.04 billion, compared to this year’s figure of Rs 5.17 billion.