Leading Mauritian sugar producer Terra Mauricia posted a 29.3% fall in full-year pretax profit to Rs 520.4 million, according to results released on Wednesday.
However, revenues fell only marginally, by 2.6%, from Rs 4.19 billion in 2012 to Rs 4.08 billion in the year ended 31 December 2013.
Terra, which has diversified from sugar to energy, alcohol production, real estate and financial services, blamed the unfavourable performance of its sugar and energy segments for the 28% dip in profit after tax to hit Rs 473 million.
The sugar segment saw post-tax profits decline by Rs 183 million to Rs 59.9 million while the energy segment saw a lower dip of Rs 52.6 million to touch Rs 132.4 million on after-tax profits.
For the sugar segment, the company noted that the sector finds itself on the crossroads yet again, with prices falling in Europe in anticipation of the dropping off of EU sugar quotas as from 2017.
The energy segment, on the other hand, was said to have suffered from lower tariffs in the post-debt period, as provided for in the Power Purchase Agreement with the Central Electricity Board (CEB). However, a record electricity take-off by the CEB and the lower tariffs being counterbalanced by lower finance costs was said to have prevented further erosion in profits of the energy segment.
Also, the company went on to note that the negative impact of sugar and energy segments was partly mitigated by the improved performance of associates and lower finance costs. These factors helped pull up the performance of the commercial and alcohol production to almost 2012 levels, culminating in a segmental profit after tax of Rs 115.3 million in 2013.
The group also commented that while it had acquired 29% stake in United Investments Ltd in late December 2013, corresponding profits from the transaction have not been accounted for in the current financial statement.
For the way forward, the company noted that the current economic climate remains challenging locally, with a low growth rate, persisting high unemployment and ever increasing competition. Hence, it observed that while most segment are “expected to perform on a par with last year, there is little visibility and forecasting has become difficult”.
To conclude, the financial statement showed that earnings per share fell to 1.60 rupees from 2.20 rupees in 2012.
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