Logistics

Despite a forecast of difficult and uncertain economic conditions in 2016-2017, the Logistics sector expects to further improve its performance. Energy will be focused on the turnaround of the transport business through ensuring that the cost saving initiatives implemented in the second quarter of 2016-2017 deliver the targeted upsides and that new revenue streams are developed to mitigate potential shortfalls from key activities.

The ongoing efforts to rationalize the systems and processes in the newly-acquired Kenyan operations will continue in the first half of the next financial year before introducing new services. This will allow for a significant improvement of overall performance as the Sector will benefit from a full year of operation and also synergies with other branch offices such as the one in India.

Countries with favourable growth potential in addition to Kenya are India, Reunion and Madagascar where further opportunities for customer base diversification are expected. In Mauritius, performance in freight forwarding will remain stable in a crowded and intensely competitive marketplace.The ongoing port development plan scheduled to be completed in 2017 should benefit the Logistics business. These benefits are likely to spill over into the Freeport business. The sugar packing activity is expected to suffer if the current depreciation of GBP against MUR is maintained or worsens after the effects of the Brexit become clearer. The bulk shipping activity will continue to operate at low margins in the foreseeable future as charter prices are likely to remain low. The freight forwarding activity in France is expected to return flat results compared to this year as economic fundamentals in Europe show no signs of recovery.