CIEL Limited (Mauritius) Group EBITDA up 5.8% to 17.1% in FY2021

CIEL Limited (CIEL.mu) 2021 Annual Report

Executive Summary

CIEL Limited announces strong performance from its diversified portfolio for the half-year ended 31 December 2021.

Group Overview

Given the challenging effects of the pandemic on CIEL’s operations on the prior period ended 31 December 2020, we have, where relevant, provided additional comparative analysis on the six-month period ended 31 December 2019 for the purpose of giving a more complete view of CIEL’s current performance and turnaround.

In the first six months of the 2021-2022 financial year, CIEL reported strong growth and improved profitability. This rebound highlights CIEL’s competitiveness in fast-growing international markets and its pertinent strategic positioning.

The agility of the group and its capacity to rebound is reflected in the 5.8 percentage point increase in the EBITDA margin to 17.1%. The continued upward trend in profit after tax further demonstrates the effectiveness of its business models which combined with strong cost management discipline and conclusive restructuring has helped the group successfully navigate the last two years of the pandemic.

Cluster Review

•  Textile: On a year-on-year basis, the pace of recovery accelerated in the apparel business with revenue of MUR 7.4 bn growing by 37% largely due to the ongoing turnaround in the Woven segment and a continued good performance from Knitwear. On account of increased sales and efficient cost management, EBITDA rose by 26% to reach MUR 660 M. Profit after tax for the cluster increased by a significant 39% to MUR 345M, which included the MUR 100M closure cost of the Mauritian fabric mill in November 2021 as part of the COTONA strategic partnership, compared to MUR 249M in the prior period, which included MUR 91M of restructuring costs.
• Finance: At MUR2.2 bn, the robust revenue growth of 24% on the prior period is largely attributable to higher banking income at BNI. The cluster posted a 35% increase in EBITDA to MUR 812M (2020: MUR 601M) and a corresponding 36.4% EBITDA margin. Notwithstanding impairment provisions at BNI increasing by MUR 265M for the period under review, a much-improved operational performance from Bank One boosted by reversal of provisions from prior periods, led to a profit after tax of MUR 369M for the cluster, up by 64% compared to the prior period.
• Healthcare: The cluster continued to post sustained growth with a 4% revenue increase on the prior period to reach MUR 1.64 bn (2020: MUR 1.58 bn} driven by the increase in ICU rooms for COVID treatment, and the continued high volumes of activity due to the pandemic, particularly in the second quarter. The Ugandan operations continued to reduce losses with the gradual lifting of lockdown restrictions and a subsequent increase in occupancy rates. Thanks to the product mix in the cluster, EBITDA increased by 51% on the prior period leading to an 8.9 percentage point increase of the EBITDA margin to reach 28.4%. Profit after tax increased 53% to reach MUR 264M owing to a stellar second quarter performance that compared favourably to the first quarter which benefitted from the positive effect of the sale of the Nigerian business.
• Properties: As the Property cluster continues to strengthen foundations from which to drive its growth strategy, revenue remained flat at MUR 58M on the same period in 2020 due to sustainable rental income, sale of non-core land and the positive turnaround in the hospitality business with the reopening of the border. The cluster reduced losses by MUR 25M on the prior period to reach a loss of MUR 6M for the six months period under review.
• Hotels & Resorts: The cluster increased revenues fivefold, mostly in the second quarter, to MUR 1.8bn, which is 46% of the full six-month pre-pandemic period of 2019. In the second quarter, occupancy averaged 48% despite the restrictions imposed on tourists coming from some of the main markets during the peak holiday season on account of the Omicron variant. EBITDA returned from a loss-making position and increased by MUR721M to reach MUR 367M leading to an EBITDA margin of 19.8%. Profit after tax for the quarter significantly improved from 2020 mainly due to the border reopening and reduced debts which contributed to lower finance costs. This led to a 90% reduction in year-on-year losses to MUR 109M from MUR 1.1 bn.
• Agro: Alteo Group revenue and normalised EBITDA grew by 16% and 17% respectively explained by the improved performance of the sugar operations in Kenya and a much-improved sugar revenue per ton in Mauritius. Alteo’s property cluster results also improved as the resort and golf operations resumed. CIEL’s share of profit attributable increased by MUR 30M to MUR 149M for the period under review.

Outlook

CIEL’s teams have demonstrated their adaptability and commitment in the most challenging environment in the Group’s history. The Group is therefore confident that it is well positioned to make the most of the positive momentum seen throughout its diversified portfolio. It will remain agile and vigilant to the likelihood of uneven economic recovery across geographies and end-markets. Strict cost control, focus on cash generation and disciplined capital allocation will therefore be maintained, without compromising on CIEL’s value creation objectives.

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