Terra remains profitable with Rs 432 m on support of other sectors though sugar cluster was in red.
Terra financial year 2014 was profitable with Rs 432 m profit upon good performance of its energy, brand, together with associates while sugar cluster posted loss of Rs 57.2 m while innovation of Terra comes in terms energy production by using straw.(Image: Wazna Gunga)
On the 32 July 2015, Terra presented its annual report for 2014 which an Integrated Report a first for Mauritius which answers the guidelines of G4 of Global Reporting Initiative.
In a context where the local sugar industry faced challengers, the group generated a turnover of Rs 3.9 bn on December 31st, 2014, with profits after taxes of Rs 432 millions, that is a reduction in 7 % with regard to the previous year.
The company remained profitable amidst tough environment for the sugar industry upon the good performance and reaping investment in sugar activities in Côte d’Ivoire.
The performance of the group can be accredited to activities of the company other than domestic sugar activities, as sugar segmented was hit by low sugar prices, which dropped from Rs 16,500 per ton to reach Rs 12,500, and assistance from the SFB brought the price up to Rs 14,500.
Amidst unfavourable operating condition, the group was able to derive operational profit of Rs 780.4 m and EBITDA stood at Rs 543.3 m and net earnings of the group was at Rs 432 m.
Other activities of the group being, in particular Sucrivoire, contributed Rs 115 m towards the group ,Energy activities brought in Rs 213 m and brands profit was at Rs 90m,investments in financial services, construction and land which, on their part yielded Rs 187 millions.
Cyril Mayer, Managing Director of Terra, highlighted that ” Terra is a diversified group and resilient at the same time. Thanks to our diversification strategy implemented for several years, our investments in companies as Swan or United Investments ( UIL) come to reinforce the profitability of the group. In the interest of our shareholders, we plan to keep the momentum, by finding other remunerative crenels in particular in east Africa, which is a growth market for the future and where we invested very recently. Accordingly, we shall continue to bring to successful projects to Mauritius, whether it is in the real estate or in other sectors of the economy. ”
Recent acquisitions of group in Inside Capital Partners and Payment Express Ltd (PEX) also come to strengthen the presence of the group in Africa. Inside Capital Partner is an independent administrator of private equity whose objective is to seize the opportunities of value creation in the region of Indian Ocean and east Africa, and thanks to such investissements réalisés in close collaboration with entrepreneurs.
As regards to the local sugar cluster of the group, the loss incurred are mainly due to the current situation, with a surplus of sugar on the international market and a consequent reduction in the price per ton, as well as the increase of production costs.
Besides, as all the sectors are turning into the export, the Mauritian sugar industry was also affected by the reduction in the Euro.
” In its current shape and at prices of sugar bordering Rs 12 500 the ton, the local sugar industry is not certainly viable. The situation will complicate more with the abolition of the quotas in Europe from 2017, which will create fierce competition on this market. In the mean time, it is necessary for us to have a rethought for the industry from top to bottom and I think that the report of LMC, recently submitted to the Government, contain interesting lines of thought and probably a large part of the answers. All them ” stakeholders ” without exception have an objective approach of the situation and to find, in the consensus, solutions which will guarantee the survival of the sugar industryin Mauritius” was the message of Cyril Mayer pertaining ot the industry sector in Mauritius
Finally an innovation of Terra will be in form energy production by using straw where trails have already been done and the investment in equipment as well and operation will begin.