New Mauritius Hotels Limited (NMHL.mu) 2019 Abridged Report

We have extracted the Statement from the 2019 abridged report for New Mauritius Hotels Limited (NMHL.mu), listed on the Stock Exchange of Mauritus:

Comments on Results for the year

Further to a reduction in the stated capital of New Mauritius Hotels Limited (NMH) by Rs 3.6Bn, the Semaris Group (Semaris) was separated from NMH on 27 September 2019. The activities of Semaris are thus being accounted for under discontinued operations and last year’s figures have been reclassified accordingly.

The Group’s revenue from continuing operations showed a marginal improvement over last year. This increase stems mainly from the improved performance of the Fairmont Royal Palm Marrakech. Normalised EBITDA was however lower than last year, the poor performance of the Mauritian operations during the high season having been only partly mitigated by the better operational performance recorded in the last quarter of the financial year. The Group’s results were also impacted by increased labour costs of Rs 58M arising from an arbitration ruling, a write-off of Rs 20M with respect to the bankrupcy of Thomas Cook, closure costs of Rs 57M incurred by Sainte Anne Resort as well as Rs 6M following the adoption of IFRS 9. On the other hand, financial charges continued their downward trend. The Group’s PAT from continuing operations decreased from Rs 247M in FY18 to Rs 157M in FY19.

Mauritius

Occupancy rate for Mauritian hotels dropped from 73% in FY18 to 72% in FY19. The results were impacted by the reduced demand for the destination during the high season months of January to April 2019. The reduced EBITDA for the year stems exclusively from the subdued performance registered by the Group during these four months and the increased staff costs as mentioned above. The appeal lodged by a number of individuals against the EIA obtained by the Group in December 2018 for the construction of Les Salines Beachcomber Golf Resort & Spa was recently struck off by the Environment And Land Use Appeal Tribunal (ELUAT). Further to this development, Management is in discussion with the relevant authorities with respect to the modus operandi for the creation of the new wetland, a prerequisite for the start of construction works. With the delay caused by this appeal, this 366-room resort is now scheduled to open during the last quarter of 2021.

Seychelles

Works on the redevelopment of Sainte Anne Resort, which started in January 2019, have reached an advanced stage. The rental of this 295-room resort to Club Med as from October 2020 will start having a significant positive impact on the Group’s results in FY21. The sale of the ex-Reef hotel was completed during the last quarter of the financial year.

Marrakech

The performance of the Fairmont Royal Palm Marrakech continued to improve with occupancy increasing from 48% in FY18 to 65% in FY19. The hotel’s Total Revenue Per Available Room (TrevPAR) increased by 43% to reach Rs 15,700. The hotel posted a significantly improved positive EBITDA of Rs 83M compared to a negative EBITDA of Rs 36M in FY18.

Non-hotel operations

The three Beachcomber Tours and Mautourco all performed well. Beachcomber Tours France successfully completed its turnaround and posted positive results for the year.

Change in financial year end

As previously announced, the Group has decided to change its financial year end from 30 September to 30 June. Consequently, NMH’s next financial year, which started on 01 October 2019, will have a duration of 9 months, ending on 30 June 2020.

Outlook

With the separation of Semaris from NMH, the Group has completed the major restructuring initiatives it started 4 years ago. All Group operations are now generating positive cash flows, except for Sainte Anne Resort which will only start contributing positively to the Group’s PAT as from FY21. Management is now putting greater emphasis on enriching guest experience, further digitalising its operational and commercial processes and improving procurement efficiency.

The Group’s hotels, both in Mauritius and in Marrakech, have registered improved results for the first two months of FY20. Furthermore, the booking trend for the upcoming high season shows a marked improvement over last year, particularly in the five-star segment. The expected improvement in the Group’s results for the first quarter of FY20 will be dampened by the significant impact of the Workers’ Rights Act and of the Arbitration ruling on operational costs. The Audited Abridged Financial Statements are issued pursuant to Listing Rule 12.14 and the Securities Act 2005. The Board of Directors of NMH accepts full responsibility for the accuracy of the information contained therein. Copies of the Statement of direct and indirect interests of Officers pursuant to rule 8(2)(m) of the Securities (Disclosure Obligations of Reporting Issuers) Rules 2007 and the Financial Statements are available free of charge at the head office of the Company, Beachcomber House, Botanical Garden Street, Curepipe.

By order of the Board