For its financial year ended 30th June 2003, the State Bank of Mauritius Limited exceeded the Rs1bn profitability mark, with net profits rising by 7.0%. For the financial year 2003, SBM saw a modest growth in interest income (up by 0.9% to Rs3.0bn), while interest expense dipped by 3.3% to Rs1.6 bn.

The drop in interest expense reflected the easing policy adopted by the Bank of Mauritius. The bank?s non-interest income recorded significant gains (up by 23.0% to Rs733.7m), mostly due to higher fees (+Rs34.9m) and gains from dealings in securities and foreign currencies (+Rs99.3m). SBM?s income was also boosted by better performance from its subsidiaries and associates, which climbed by 52.1% to Rs79.1m. SBM?s operational expenses rose by 13.0% to Rs768.9 m amid higher wages (+16.5%) and pension costs (+50.5%).

Going forward, SBM has a two-fold strategy, which consists of regional expansion and the diversification of its Mauritian-based activities amid increased competition from non-bank financial institutions and foreign banks. SBM also hit the news with the announcement of a share buy back programme. SBM proposed to buy back up to 40m shares, which represents about 10.45% of its issued capital. Last Wednesday, SBM shares jumped by 14.9% to Rs17.00 following the share buy back news. For the week under review, SBM was the strongest performer on the official list, rising by 8.1% to Rs16.00.

Commerce conglomerate Ireland Blyth Limited (IBL) also released its interim financial results. For the first six months of 2003, IBL saw a 18.5% jump in its turnover but recorded a 4.4% decline in its net profits. IBL?s gross operating profit edged slightly higher to 3.6% from a 3.5% level recorded during the same period in 2002.

The bulk of IBL?s increase in turnover (+Rs435m) was shared among its Earthmoving equipments (20%), contracting (13%) and pharmaceuticals (12%) business units. The dip in net profits was mostly attributed to higher finance costs (+26.3% to Rs90.5m) arising from loans contracted to finance the company?s investments in Trianon Shopping Park, Princes Tuna (Mauritius) Ltd. and Chantier Naval de l?Océan Indien Ltée.

Going ahead, the management plans to expand the Winner?s supermarket network with an additional of 2 units in 2003 and a further 2 units by end of 2004. IBL is expected to benefit from cost savings and productivity gains with the coming into operation of its central warehousing facility. IBL edged 0.5% higher to Rs18.60 for the week under review.

Local Bourse higher

Last week, most economic sectors slipped into negative territory, but the local bourse managed to finish higher, helped by the SBM rally. Both the broad market Semdex and the total return (SEMTRI) indices gained 0.3%. The Sem-7, the index tracking the share price performance of the largest capitalization stocks on the local bourse, appreciated by 0.4%. Sugar stocks led the decline, with its 3.0% drop. Shares of hotels & leisure and transport companies weakened, down by 1.6% and 1.3% respectively. On the commerce counter, Courts (Mauritius) Limited and Happy World Foods Limited rose by 4.2% and 2.1% respectively, while commerce conglomerate Rogers & Co. Ltd. slipped by 1.6% to Rs90.00.

Contribution by Confident Asset Management