Mauritius sugar major Alteo sales dip slightly on strike & late harvest in 2014
The Mauritian sugar operations were adversely affected by numerous factors last year such as the delay in the 2014 cane harvest and a lower extraction rate compared to that of crop 2013 in the period under review. (Image: Alteo Group)
Mauritius sugar producer Alteo saw its turnover for the six months to 31 December 2014 dip marginally by 3.4% to Rs 3,524 million from Rs 3,649 million in the year-ago period.
The Mauritian sugar operations were adversely affected by numerous factors last year such as the delay in the 2014 cane harvest, primarily on account of the two-week long industry strike in November 2014. The industry also suffered from a lower extraction rate compared to that of crop 2013 in the period under review, resulting in a shortfall of 26,000 tons of sugar, representing a loss of Rs 377 million on the sales front.
Moreover, it is expected that part of this shortfall will be recovered in the third quarter. The 2014 crop sugar price forecast of Rs 14,500 per ton, including the expected one-off payment of Rs 2,000 per ton receivable from the Sugar Insurance Fund compared to the 2013 crop sugar price forecast at same time last year of Rs 16,500 per ton, translated into a shortfall of Rs 140 million.
On a positive note, the turnover from the Tanzanian operations benefited from a higher sales volume compared to the corresponding period last year. In addition, the property development operations at Anahita again recorded a sustained improvement in activity and sales.
The group profit after tax for the first semester rose 19.6% to Rs 841 million. In the period under review, profits were positively impacted by the disposal of a 50% shareholding in Anahita Hotel Ltd, which generated proceeds of Rs 926 million and translated into a gain of Rs 305 million.
In 2013, comparative figures included an accounting loss of Rs 225 million, following disposal of a 50% shareholding in Novelife Limited.
The Energy results were adversely affected by the much lower profitability on coal burning at Consolidated Energy Ltd compared to bagasse burning in 2013. The results of the property cluster for the period, despite being better than 2013, are not reflective of the improved situation at Anahita because of the profit recognition criteria on the sale of services plots.
Moreover, Alteo Energy Ltd will benefit from additional bagasse available following the higher cane throughput and should post improved results compared to 2014.
From the property segment, a gain in sales momentum since the beginning of the year is expected to translate into better results in the coming two quarters when profits on sales of serviced plots are booked, upon handing over and villas reaching completion.