Mauritius’ Sun Resorts promises sound performance in 2015 with Rs 83 mn profits in Q1
Mauritius hospitality major Sun Resorts Limited announced a 14.4% revenue growth and 42.1% improvement in operating profit for the quarter ended 31 March 2015 upon higher market share, together with encouraging growth in tourist arrivals and positive contribution from 50% shareholding in the Four Seasons Resort Mauritius at Anahita. (Image: Company)
Mauritius hospitality major Sun Resorts Ltd (SRL) has posted encouraging results for the first quarter of 2015 with a total revenue of Rs 1.24 billion, representing an increase of 14.4% over the same period in 2014, while profits after tax rose almost three-fold from Rs 22.17 million in the first quarter of 2014, to Rs 83.01 million in the preceding quarter this year.
It may be noted SRL is listed on the Stock Exchange of Mauritius (SEM) with a market capitalisation of Rs 5.8 billion.
The occupancy rate of the hotel for the period stood at 84.6% compared to 59.6% in 2014, upon encouraging growth in tourism arrival with growth rate of 10.6% in Mauritius as a whole, causing theMauritius segment to report higher revenues to reach Rs 907.4 million.
However, revenue for the hospitality chain from its Maldives hotels stood at Rs 200.6 million, lower than 2014, upon Maldives tourism arrivals experiencing only a moderate growth of 2.6%.
Having said that, Maldives still derived higher profit than the Mauritius segment with Rs 58.1 million compared to Rs 35.3 million worth of profit for Mauritius.
The operating margin of SRL was at 12.1%, higher than 9.7% in 2014.A lower finance cost was noted, together with higher share in profit of associate, representing results of the Four Seasons Resort Mauritius at Anahita in which SRL acquired a 50% stake in December 2014 of Rs 20.2 million. All these positive factors taken together, contributed to a substantially higher profit figure of Rs 83.0 million for the quarter.
The group continued its steady progression by increasing its market share of tourist arrivals,thus outperforming the industry for the third consecutive quarter, attributed to an effective pricing and marketing strategy.
Together with the agreement signed with the Shangri-La Group last August and the share holding in Four Seasons Resorts, which were part of SRL’s 2014 –2019 strategy to increase value through effective asset management and partnerships with leading international hotel operators, and the reinforcement of SRL new brand identity and the execution of the business process reorganisation, SRL is consolidating its position and seeking to initiate the growth of its owned and managed portfolio under the “Sun Resorts”brand.
With the successful completion of the rights issue in February, SRL now enjoys a stronger financial structure from which to execute its long-term strategy.
The cash flow position of SRL has improved, and liabilities in the balance sheet were lower than 2014,withthe gearing ratio having substantially improved from 48% to 33%.
The major development at SRL is the renovation of Le Touessrok Resort, which closed on 16 April, and upon re-opening, it will be branded and re-launched as Shangri-La’s Le Touessrok Resort & Spa.
In addition, Kanuhura (Maldives) will also start a first phase of renovation, which will be targeted at its back office areas and main services.The resort, will, however, remain open throughout this phase.
In conclusion, despite the significant investment in both resorts and closure costs associated with Le Touessrok the management of SRL is confident that, based on current market conditions and barring any unforeseen circumstances, its strategic plan will progressively deliver a turnaround in profits.