Bloomberg News

New Mauritius Hotels, Sun Resorts Raised to ‘Hold’ by MCB

June 03, 2011

(Updates with profit forecast in second paragraph.)

June 3 (Bloomberg) -- New Mauritius Hotels Ltd. and Sun Resorts Ltd., Mauritius’s biggest leisure operators by market value, were upgraded to “hold” rating from “sell” at MCB Stockbrokers Ltd.

Profit at NMH, as the company is known, may rise to 912 million rupees ($33 million) in fiscal 2011 from 660 million rupees a year earlier, Vanessa Lai Min, a Port Louis-based research analyst with MCB, wrote in a research note e-mailed today. The company has a November price estimate of 102 rupees, while Sun’s is 62 rupees for the same period. Lai Min wrote on Sun in a separate note.

“NMH appears to be outperforming peers in Mauritius but a highly competitive low season and higher interest costs are likely to drag earnings, although we should see an uplift in the results of associates and from further villa sales,” Lai Min wrote.

Tourism and textiles are the biggest sources of foreign currency in the Indian Ocean island nation. Tourism revenue for 2011 is expected to rise 7.7 percent to 42.5 billion rupees, the Central Statistics Office said on February 25. The Mauritius Tourism Promotion Authority is targeting tourist arrivals to reach 1 million by the end of the year, from 934,827 in 2010.

Sun Resorts opened its 2.6 billion-rupee, 255-room Long Beach resort in April. It plans to recoup the investment through the Investment Hotel Scheme, a sale and lease-back plan approved by the government that applies to 90 rooms at Long Beach.

The “expected profit on IHS will likely provide some support to the share price,” Lai Min wrote.

NMH rallied 1 percent to 106 rupees, by the 1:30 p.m. close in Port Louis, the highest since May 19, while Sun climbed 0.8 percent to 63.5 rupees.

--Editors: Ana Monteiro, Karl Maier

To contact the reporter on this story: Kamlesh Bhuckory in Port Louis at kbhuckory@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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