• “Love of money is the root of all evil” – New Testament. Timothy 6:10
• “Lack of money is the root of all evil!” George Bernard SHAW

This  year, more than any other preceding year, there is clear reward in having been on the ball and fast shooting in the publication of one’s corporate financials. For sure, those companies or groups that published figures relating to 2022 or even up to December 2021, all generally show stronger turnover levels and improved profitability compared to those of 12 months earlier. Indeed results to 30 June 2021 and before were bang in the middle of the singularly constrained environment of the Covid pandemic, facing off the consequences of the sheer panic of our first planetwide, modern pandemic.

It is also useful to remind ourselves that compared to the 43,000 deaths caused locally by the malarial fevers faced between 1866 and 1868 (13% of our total population) and the 10,000 deaths registered for the Spanish flu in 1919 (2.7% of our total population), we have officially only registered 1,030 covid-related deaths in Mauritius since March 2020. This, on a population size that is at least 3 ½ times larger than 100 years ago registers as only 0.08% of our total population!

 Perspective can indeed be parlous sometimes! What made the difference is still par- tially open to question. Was the coronavirus bug less dangerous? Did the vaccines do the trick? Are better levels of health care responsible? Did the health care authorities take better decisions? Did better information flows, less superstition and media-induced concern, occasionally verging on hysteria, actually lead the population to be more prudent and the- refore less spread – efficient? We might never know the whole truth, but there is a definite feeling that there might have been a fair amount of over-reaction to the covid bug and that the costs eventual- ly shouldered to control the pandemic, including all the havoc created on lines of supply, freight, prices and government debt, could have been more modest by some fair amount. Which does not mean to say that we can now totally relax and go back to our previous easy-going, carefree selves: the bug is still around, people still die worldwide and vigilance therefor needs to be maintained …

The business environment is certainly looking and feeling better now in almost all sectors of our economy, in spite of serious remaining challenges and it may, consequently, be a little dis- maying to confront some of the consolidated figures of the present Top 100 publication, simultaneously. However, there is no way of, nor any sense in avoiding them. We can only look to results past! However, this, at least, has the merit of highlighting the contrast of yesteryears’ more difficult times and thus of challenging us all to do better going forward…

Yet another major complicating factor emerging since February is the war in Ukraine of course because it has quite obviously upset a solidly anchored hypothesis since WWII, that a major war in Europe is well nigh impossible. Indeed, the rallying and active military and economic support of all western democracies in helping Ukraine face off the Russian aggressor, has led to an almost intractable equation militarily. Indeed, no one side can now afford to lose! How else is this war supposed to end then, except through escalation and more devastation ? Anybody care to propose a plausible answer, seeing the parties involved?

Meanwhile, beyond the sheer insanity of killing innocents and destroying precious infrastructure in Ukraine and upsetting so many lives in both countries, the immediate, self-centered concerns of the rest of the world hover around oil, gas and cereals.

To put matters in perspective, not since October 2014 has the price of a barrel of oil been as expensive as now: 86 dollars for WTI crude and the war launched by Putin in February last sent prices soaring well past even that point! The recent OPEC decision to reduce supplies by 2 million barrels per day (daily consumption being some 94 million bpd) will probably shore up prices to higher levels than currently, thence fuel inflation and surely slow down most economies around the planet. Maybe even to recessionary levels, given the pre-existing conditions of dislocated supply chains, high debt levels, with inflation rates and interest rates flying off most recent charts. If we add a slowing China to the mix (on account of its property market woes; fully 29% of property loans being by now classified as ‘bad debts’, according to Citigroup, in a sector representing anywhere between 20% to 30% of GDP!), we are looking at a palpably more unstable and worrying world than 3 years ago, with downsides looking far more probable than any upsides.

In this context, this year’s national bud-get is full of upbeat good intentions, but was not much better than a sop. Handouts of Rs 1,000 to all 350,000 citizens earning less than Rs 50,000 plus another Rs 1,000 to all 300,000 pensioners will unfortunately not go very far with inflation at 11/12%. Besides which, government spending is proceeding unchecked on the basis of Rs 22 billion more taxation, the relief of a Rs 25 billion funding of Airport Holdings by MIC and some eventual help from the Special Funds stash of Rs 40 billion. The gamble is to generate growth even if more risks will be taken with inflation. As usual, the budget is short of inconvenient truths. If the world economies do go into recession in 2023, as now looks likelier, we might discover some of these the hard way as the tide comes back swiftly in . For there are no more margins for maneuver. We must now indeed all pray that our gamble on the number of tourist visitors is not clobbered by stagflation or even worse….curtesy of Mr Putin!

“The best way to ruin a country is to debauch its currency”. Vladimir LENIN

The consolidated figures of our sample of 384 companies for this year show what can only be described as sizeable progress, 12 months on. A consolidated loss, last year, achieved because of the hotel sector which was locked off from its overseas customers for just about 18 months, in spite of many of our competitors getting back to action more swiftly; has now swung positively to net profits of +Rs 12,6 billion. Indeed, most sectors show an improvement in sales turnover, albeit in devalued rupees, except for hotels, betting, media, advertising and printing. Profit wise, only media and hotels show figures in red.

That very hotel sector has registered another year of deficit, according to our sample, which is no surprise since their lockdown lasted 18 months and therefore impacted at least two sets of annual accounts. However, a word of caution is necessary here. Our samples, rather than being built around a particular year’s figures have always been put together using the latest available figures. As a result, if you take a closer look at the hotel sector listings, you will note that if most companies do indeed report 2021 figures, both to June and December; seven of them actually report June 2022 figures. These obviously illustrate the beginnings of a strongish turnaround and help cushion the bloodied “2021” figures quite a bit.

The real point here is that, ideally, one should compare what is comparable and that a number of the 2022 sets of financials are simply not typical of the abnormal circumstances of 2021. Both 2020 and 2021 figures are quite plainly horrible because of the pandemic and the overly cautious 18-month lock down of the airport. Opening our airport a few months earlier, like many of our competitors did, would have helped the country no end. As it is, for the second year running, we register the abominable situation of some individual hotel losses being larger than turnovers themselves, though some cases of balance sheet purging also took place at the same time, no doubt!

In Agriculture, Alteo dwarfs the rest of the sector both in terms of its turnover, at Rs 12.1 billion and its profits of Rs 1.8 billion, both substantially fueled by overseas ventures which have come good, contrary to the Marromeu adventure of other sugar groups, in Mozambique, some years back. Omnicane registered another year of severe losses of Rs 691 million, but mercifully, this was a positive swing of Rs 2.4 billion on December 2020 results. The question remains: Has the MIC intervention and surgery managed to re-establish their long-term viability? The answer may become clearer next year.

The 30-strong sample within Textiles is largely dominated by CIEL Textiles, which, to June 2022 clocks Rs 15.5 billion worth of turnover and net profits of Rs 744 mil- lion. Just like the other Top Gun of ‘local’ textiles, that is CMT, their operations are now far more located overseas than locally. RT Knits had an exceptional year, registering PBT of 30% on turnover and Denim de l’ile had a very commendable profit of Rs 344 million on a Rs 1.7 billion turnover. The story line of RT Knits is exemplary and needs to be told. Instead of shopping for higher productivity by migrating operations overseas where labour is more plentiful and/or cheaper, the CEO, Kendall Tang, invested heavily in automation and robotization just before the pandemic, which put him in a stronger position to respond to his customers re-launch of orders, when they did come. Robots do not fear lock downs and are fearless of vaccines. As a result, the company is much more…pass me the word ….resilient, labor productivity has improved very materially like, indeed, working conditions and job security. A model for our future as long as it entails the proper mindsets and focused, dedicated training?

The Construction sector has done well in 2021 to the exception of Rehm- Grinaker, Sotravic and Super Construction. The most active compa- ny of the sector is probably again Larsen & Toubro, though, surprisingly, it has not filed its figures to March 2021. Its profits to March 2020 were a sizeable Rs 1.18 billion, building the beautiful metro express tramway line that now crosses the island from Port Louis to Curepipe. Glancing through the sector’s table and short of a detailed analysis, there seems to be a case to suggest that construction material suppliers look to be doing better overall than builders themselves with the notable exceptions of General Construction and Afcons, the latter having been hard at work in constituency number 3, in Agalega.

The four players within the Oil and energy sector had a much better year as economic activities perked back up to near normal and jet fuel started being meaningfully consumed again as from October 1, 2021. Engen Petroleum, the number two in the list after Vivo Energy will surely be crossing the Rs 10 billion sales mark next year, but will probably have to give closer attention to its bottom line with respect to its peers? Indian Oil is the company making the most progress over the year – if partly helped by reporting March 2022 figures instead of December 2021 ones and it seems to be at the expense of Total Energies.

The Supermarkets/Distributive sector had another swell year. Seven Seven Co ltd added another 677 million to its 2020 turnover to skip past Udis ltee (Super U) for second place in the turnover rankings. This is quite a feat, but it is achieved at the expense of lower profitability with respect to turnover (1.5% v/s Udis’s 3.0%). Pick n Buy, the leader of the pack turnoverwise, switched back to profits to June 2021, but achieved even lower yields profit-wise (1.1% on turnover) Paltoni Retail, which operates the Intermart of Beau Bassin and La Croisette and just recently, Rose Hill remains coy about its profit and it is hard to understand why. Family World which operates the Ebene Intermart had the best yield results of the lot (8.4% v/s 6.9% last year). Antonio Maurer & co ltd had a bad year in Trou aux Biches, probably as a direct result of fewer overseas visitors and should do better as tourists flock back.

The tale to tell within the insurance sector is of the turnover progress of the two bigger boys, Swan and MUA, that of the relative stagnation of businesses lower down the list, the appearance of two new operators in Quantum and Afri Life, but most notably, of the stupendously flattering profitability record of SICOM, a 10% increase in premia and other revenue (+ Rs 311 million) leading to a 49% increase in PBT (+ Rs 347 million). The joys of a captive public market, at least partly, can we presume?

There has been some scrambling at the top of the turnover rankings in the Retail Commerce section with Mammouth dislodging The Brandhouse and Hyvec shooting up to fifth position as a newcomer. The business efficiency (and thence of profitability) of J. Kalachand is still top of the range... Only seven operators of our sample of 34 lost money. Mauritius Telecom still tops the chart in the Telecommunications/ ICT segment but Emtel does a much better job yield wise even though its figures are one year late on its main competitor. Lottotech, PlayOnline and even Automatic Systems showed solid progress both turnover and profit wise in a Betting and lottery segment characterized, by the looks of it, by more than its fair share of bashfulness… Indeed, filing of corporate returns and financial updating are apparently chronically difficult to achieve here, fully nine of the sample of 16 betting operations apparently not filing their latest accounts yet. The last filing of 8 of those showed reasonable to sizeable profit levels …These include SMS Pariaz, Top Turf, Sports Lepep. The other notable feature of this segment is the apparent ‘fall ‘of Stevehills whose turnover looks boiled down from 828 million to 237 million in one year. Yet yearly profits progress from 67 million to 96 million, which suggests prior year adjustments of T/O, write backs, a change of definition of revenue or the like. The Medical & Health sector is demonstrably the fastest growing segment of our Top 100 listing more than doubling its turnover and its profits within the last 5 years. Ciel Medical leads the way with its Wellkin and C-Care operations, which somewhere must be benefiting from the contrast in service quality compared to the governmentsupplied offer. Why, otherwise, pay for equivalent services you could get for free? The segment is dominated by clinics, pharmacies and importers/distributors but many (including us) are rooting for the continuously successful activities of Natec Medical to act as a beacon of higher value adding and more forex earning for the country. Velogic of the Rogers group remains the key player amongst Logistics & Freight service providers, representing fully 42% of our sample’s turnover. The segment looks like having done well recently and its achieved spurt of growth of 32% with respect to 2020 figures quite probably has something to do with freight rates themselves, which have become extremely pricey in the wake of the pandemic, multiplying the net profits of freight majors well beyond reason.

Turnover metrics for the three smaller segments of Media, Printing and Advertising and Events were all knocked backwards this year. Within the media section, MBC and Le Mauricien have filed no recent accounts, La Sentinelle and Mediacom did poorly, but the Defi group, Femi Publishing and Radio Plus, duly regrouped, showed results, which simply beggared belief in ongoing circumstances. The tertiary education listing is a new addition for the year and shows that even education services when properly run can be lucrative. We cannot complete the picture without parastatals, for even though their KPIs and objectives are not those of the private sector companies, they are embedded within the local economy and put taxpayers’ money to use, good or bad. The sampling of parastatal bodies widened from 33 to 44 units this year, which is getting closer to half of the total. More often than not, parastatal financials are available to public scrutiny only very late. Of our sample, we must therefore recognize and highlight the timely financials of the CEB, the MRA, the FSC, the University of Mauritius, the Civil Service Family Protection Scheme Board, the Human Resource Development Council, the Mauritius Institute of Health, the Financial Reporting Council and the Construction Industry Development Board, in the hope that ALL parastatals do as well, compliance-wise, soon! Thanks in no small measure to MIC, the Banking sector did better this year, sometimes much better, with the notable exceptions of Habib and Baroda which lost money and Afrasia whose profits, on an improved assets base, were materially reduced.

“Blessed are the young, for they will inherit the national debt.” Herbert HOOVER

Our economy is indeed bouncing back in rupees, but, tellingly, not in dollars, since our national currency has lost some 20% of its value wrt the greenback since early 2020, feeding inflation. Looking forward, Mr Putin’s war is not going to help the world’s economies and that of China has been inordinately constrained by its ‘zero covid’ policy, more government interventions in the dynamics of private industry-especially in tech and with its property market failings. The Euro zone has no pep and US spending will surely slow down as interest rates go up. Planetary prospects for next year do not therefore appear promising. The IMF can even see recession on the horizon and inflation challenges are everywhere as corporate greed catches on worldwide.

Locally, the trade balance has got even worse at -33% of GDP, the balance of payments deficit stands at an unsustainable 14% and we are indeed defying important IMF recommendations – namely wrt MIC. Besides which government debt is high, can surely no longer hope to benefit from the Central Bank’s ‘magic door’ and is unlikely to be helped by the CSG adventure initiated within an ageing population and on top of an ever-increasing social budget.

Fiscal consolidation, deep structural reforms that are productivity-biased, sizeable reductions of wasteful expenditures allowing the country to concentrate on game changing renewable energy, for example, a most solid injection of meritocracy, discipline, open mindedness and professionalism, effective and independent institutions, a dogged effort to work harder, to be more transparent, to share the whole naked truth and to be more compassionate all look necessary to cushion what is coming. I

am deliberately repeating myself! However, what else should I do? Align with the mushy and the cynical? Join the couldn’t care-less-crowd? Drift along limply with the stronger currents of the day? Hell no! As this just would not allow us to be up for it!

Foreward to Top 100 Companies 2022 
(Written on October 26, 2022)