Mauritian construction major Gamma sees half-year revenues up 13.19%
The management noted that in June 2014, subsidiary Lottotech Ltd was successfully listed on the Stock Exchange of Mauritius and the sale by the group of 18.75% shareholding in Lottotech has resulted in a gain of Rs 588 million to the group. (Image: Trio Products)
Mauritius’ leading conglomerate Gamma Civic declared in its financial statement that revenue for the half year went up by 13.19% to Rs 2.59 billion while profits rose 5.84% to Rs 26.26 million.
The board of the leading construction, property and gaming major noted that, despite the difficult economic conditions, the business segments of contracting, building materials and lottery delivered profits.
The management noted that in June 2014, subsidiary Lottotech Ltd was successfully listed on the Stock Exchange of Mauritius and the sale by the group of 18.75% shareholding in Lottotech has resulted in a gain of Rs 588 million to the group.
Incidentally, this gain has been recognized directly in retained earnings, leading to an increase in group equity to Rs 2.89 billion as on 30 June 2014, compared to Rs 2.38 billion as on 31 December 2013.
Moving on from the lottery business, the board stated that the contracting business – which comprises the building, roads and civil engineering divisions – remains at the core of the group strategy and continues to deliver profits.
Coming to the investments segment, Gamma noted that this division mainly deals with real estate business comprising a bank of prime land as well as some premium offices, which it is looking at developing to unlock value for shareholders.
On the property front, the group also observed that Morning Light Co, an associate of the Gamma group, is running the Hilton Mauritius Resort and Spa, which has been closed for renovation since 1 June 2014 and is expected to be closed till October 2014.
“Due to the ongoing renovation, the financial performance of the hotel is being affected,” stated the board.
On future outlook, the board noted that the environment in which Gamma is operating is very challenging and said it is monitoring the situation closely, such that the respective companies will take supplementary action if business conditions deteriorate.
“We remain cautiously confident in our ability to grow earnings over the short to long term whilst continuing to create value for our shareholders. The long term growth and sustainability of Gamma Group remains our focus,” stated the board.
In a related development, Gamma has expressed intent to exercise its pre-emptive rights to acquire majority stake in its cement subsidiary Holcim (Mauritius), in which global cement major Holcim holds 51% stake, while Gamma holds the remainder 49%.
During a work session held last Thursday between the State Trading Corporation (STC) and the Competition Commission of Mauritius (CCM), a possibility of Gamma selling its shares to an international buyer at a premium was also considered.
As the regulator of the cement market in Mauritius and a commercial entity run by the government, the STC is following the case closely.
For STC, the departure of Holcim could be perceived as an opportunity to widen its scope of action and step into the breach in the cement market by trading in cement products itself.
Indeed, the departure of Holcim offers a potential cement supplier the possibility of using the cement major’s infrastructure to position on the cement market in Africa, knowing that this market holds the promise of strong growth in the coming years.
Meanwhile, the Competition Commission of Mauritius, which introduced an investigation at the proposal of merger of Holcim and Lafarge in Mauritius, is now gathering the opinion of the parties concerned by the merger Holcim-Lafarge.