Bloomberg News

Sun Resorts of Mauritius Targets Asia as Europe Wanes

May 16, 2012

Sun Resorts Ltd. (SUN), Mauritius’s second- biggest hotel operator by market value, is confident of growing earnings by at least 22 percent as it focuses on Asia to offset a decline in visitors from Europe.

Earnings before interest, taxes, depreciation and amortization for fiscal 2012 will rise to one billion rupees ($34 million) from 817.1 million rupees a year earlier, Chief Financial Officer Tommy Wong said in an interview in Ebene, south of the capital, Port Louis, on May 14. “Growth will be led by diversification to Asia and the fully operational Long Beach hotel,” he said.

Tourists from Europe, which accounts for 66 percent of arrivals to the Indian Ocean island nation, fell 2.7 percent in the first quarter, led by France, according to Statistics Mauritius.

While Europe is unlikely to recover from a debt crisis soon, “there is sustainable growth in emerging markets such as China, Russia and India,” Wong said. “People there have money to spend, which we are seeking to tap in the near term through aggressive marketing.”

Arrivals in April were little changed at 79,137 tourists, Statistics Mauritius said today. A 5.1 percent drop in visitors from Europe was compensated for by a 25 percent increase in tourists from Asia. Visitors from China increased by 71.4 percent for the four months through April.

‘New Vision’

The leisure operator, which ranks second to New Mauritius Hotels Ltd. (NMH) and derives 60 percent of its income in euros, said first-quarter net income retreated 2.5 percent to 149.5 million rupees.

Arnaud Martin, the company’s chief marketing officer who has 34 years experience in the leisure industry, said the company is targeting 20 percent of arrivals from emerging markets. “We need a new vision; the traditional markets are under pressure,” he said.

Sun Resorts owns and manages four hotels in Mauritius and one in Maldives. The Long Beach Hotel, located on the eastern coast of the island, started full operations in mid-October, increasing the group’s number of rooms to 1,261. Sun Resorts is also refurbishing the Ambre Resort & Spa hotel, which it leases, for 465 million rupees.

The group’s prospects “look promising with the Ambre hotel and the Long Beach hotel,” Bhavik Desai, a research analyst at Axys Stockbroking Ltd., said in a phone interview from Port Louis. “Europe is the big uncertainty. It will be the game changer.”

Hotel stocks have led the slump in the 38-member SEMDEX index, which has fallen 3.3 percent this year, with Sun Resorts retreating 16 percent, according to data compiled by Bloomberg. The stock traded unchanged at 39.50 rupees by the 1:30 p.m. close in Port Louis.

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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