[2007-06-24]  Financial Highlights - Year ended 31st March 2007
Air Mauritius faced exceptional challenges during the financial year 2006/07 which had an adverse impact on its performance. The Group recorded a loss of Euro 6.8 million (Rs 280 million) compared to a profit of Euro 7.9 million (Rs 285 million) achieved in the previous year. Group operating revenue in was static in Euro terms at Euro 414.2 million (Rs 17.1 billion) compared to Euro 416.6 million (Rs 15 billion) last year.

The performance of the Group is heavily dependent on the results of the airline which this year suffered a decline in traffic revenue when compared with the previous year, despite operating an enhanced timetable with 7.2% more seats. The Company’s total operating revenue was Euro 412 million (Rs 17 billion) compared to Euro 413.9 million (Rs 14.95 billion) in the previous year. However, traffic revenue for the Company at Euro 356.8 million was 4.1% lower than the Euro 372.1 million achieved in the previous year. This reduction was mainly due to a combination of: the cancellations of travel due to Chikungunya in the first quarter of the financial year, the cancellation of travel due to unavailable hotel capacity in the months of December 2006 and January 2007and increased competition as a result of the opening of the air access. This led to overcapacity resulting in lower Load Factors and deteriorating yields.

The Company was however able to grow its passenger base and carried 1,176,633passengers, compared to 1,158,262 passengers last year. The passenger Load Factor at 74.6% was 2.3 points lower than the 76.9% achieved in the previous year. The Cargo business continued to contribute to the results of the Company with a total of 33,649 tonnes being carried compared to 35,705 tonnes last year. Cargo revenues were 13.8% of total passenger revenue.

On the cost side, the price of jet fuel on average rose by 9.6% when compared with last year. In addition, net finance costs increased due to the impact of a high Euro on the hedging costs on currency. During the year, the company had also to pay for the arrangement fee for the two new A340-300E aircraft. The aircraft fleet was realigned to address the Company’s future capacity needs and this resulted in the sale of the two B767 and the two ATR42-500 aircraft. Additional maintenance costs were incurred on the return of the leased B767 aircraft engine to the owners, after the sale of the aircraft.

As a result, the Company reported a loss of Euro 7.9 million (Rs 326 million) for the year ended 31 March 2007, compared to a profit of Euro 7.3 million (Rs 264 million) last year.

Transformation Program
This was also a year in which the Company started its transformation to address the long term impacts of the changed business and market realities. A full scale review of the company was performed with the assistance of McKinsey and a three year Transformation Program was initiated. The Company has incorporated the initiatives into its 3 year Business Plan.
The adverse effects arising from all the challenges outlined above are being addressed through the implementation of the change programme which touches every aspect of the Company. Over 80 specific initiatives aimed at reducing the cost base, enhancing service levels and strengthening our yield management structures have been launched.

Dividend and Shareholders’ Funds
In view of the financial results of the Company and Group for the year, no dividend was declared in March 2007. Last year, a dividend of Rs 0.50 per share was paid.

The company remains strong, with the Total Shareholders’ funds for the Group amounting to Euro 182.5 million (Rs 7.8 billion). The resulting net worth per share at 31 March 2007 is Euro 1.78 (Rs 77.76). The net worth per share last year was Euro 1.94 (Rs 71.77).

Cash Resources
Group net cash and cash equivalents at 31 March 2007 amounted to Euro 52 million (Rs 2.2 billion) as compared to Euro 44.8 million (Rs 1.7 billion) for last year.

Net cash and cash equivalents of the company amounted to Euro 51.6 million (Rs 2.2 billion) which is 16.2% higher than in the previous year. The net cash and cash equivalents last year were Euro 44.4 million (Rs 1.6 billion).
As at 31 March 2007, Air Mauritius held cash amounting to SCR 12.6 million (Euro 1.5 million) blocked in the Seychelles since 1998, due to foreign exchange restrictions prevailing in the country. In May 2006, the Company succeeded in unblocking and converting SCR 15 million through a secured loan to a hotel company with repayments to be made in US Dollars. In addition, the sale of tickets in the Seychelles is being carried out strictly in hard currency and credit cards. All expenses incurred in Seychelles are also being disbursed in Seychelles rupees from the remaining blocked funds in an effort to alleviate this problem.

Aircraft Fleet Plan
The year 2006/07 witnessed major changes in the fleet composition of the company. In 2007 the fleet plan provides for the addition of two new A330-200 aircraft, one in November 2007 and the other in October 2009 to meet the airline’s medium term capacity requirements.

Results of Subsidiary companies
All three operating subsidiaries recorded profits this year, reflecting improvements in these activities. The strengthened management structures are beginning to yield the desired results.
Mauritius Estate Development Corporation Limited (MEDCOR Ltd)
MEDCOR Ltd recorded a profit of Rs 43.4 million (Euro 1.1 million) as compared to Rs 25.8 million (Euro 0.7 million) for last year. This year’s profit includes a fair value gain of Rs 16.1 million (Euro 0.4 million) which arose on the revaluation of the investment property. The office space remained at 100% occupancy level during the year.
Pointe Coton Resort Hotel Company Limited
Pointe Coton Resort Hotel Company Ltd recorded a profit of Rs 5.6 million (Euro 0.14million compared to a loss of Rs 2.9 million (Euro 0.08 million) for the prior year. Turnover of Pointe Coton Resort Hotel Company Limited increased by 17.5% in rupee terms to reach Rs 51.7 million (Euro 1.2 million), compared to Rs 44 million (Euro 1.2 million) for last year. The occupancy rate of the hotel slightly increased to reach 63%.
Airmate Limited
Airmate Ltd started its operation in June 2006 and recorded a turnover of Rs 28 million (Euro 0.68 million) and a profit of Rs 2 million (Euro 0.05 million).


Source: Air Mauritius Ltd