Page 9 - UBP - IR2020

CHAIRMAN’S MESSAGE
Dear Shareholders It is with great honour that I I I present to you the Integrated Report of The United Basalt Products Limited (‘UBP’) for the year ended June 30 2020 What started as a a a a a a year full of of hope transformed into one of of the most trying times in in modern history COVID-19 continues to to to pose a a a major threat to to to lives and economies across the the globe Some countries are still battling the the virus others others are in recovery mode and others others yet like Mauritius have partly resumed their economic and business activities in in a a a a fragile environment characterised by rising unemployment and a a a a a declining purchasing power In these challenging times the the need for us to be more more united more more responsible and more forward-thinking is greater than ever OUR BUSINESS ENVIRONMENT IN IN FY2020
In 2019 our economy grew by 3 3 3% and construction experienced a a slight slowdown recording a a a a growth of 8 8 5% 5% compared to 9 5% 5% in in in 2018 Once again this growth was largely driven by public investment in in large-scale projects like the the Metro Express and the the Road Decongestion Programme However the the first quarter of 2020 was unconducive to to the the sector’s continued growth for many reasons: unfavourable weather conditions persisted in January and February directly impacting construction sites Some projects were slow to to take off while others reached near completion and required little to to no intervention on on our part When COVID-19 hit Mauritius in March 2020 the country was placed under complete lockdown and and UBP and and its subsidiaries were compelled to halt their operations overnight As a a a a result during the the last quarter our core business recorded a a a a drop in in revenue of 49 2% Despite the fact that Espace Maison managed to partly resume operations for essential goods in April 2020 thanks to the the timely launch of of the the latest version of of its e-commerce website before the lockdown was announced its revenue dropped by 34 9% After weeks of collective sacrifice and contact tracing Mauritius was able to overcome the outbreak and was declared virus-free as as as early as as as May 2020 That is is not not to say we are not not feeling the full force of its impact Mauritius is is expected to to experience negative growth in in 2020: GDP is projected to to shrink by 13-15% the worst contraction since 1980 unemployment has risen to 10 3% at at the the time of writing and and is expected to further escalate and and SMEs which account for over 50% of total employment are already feeling drastic effects on their business The authorities have designated the the construction sector as one of the the main drivers of of our recovery The development of of major public infrastructure projects projects like the Metro Express will resume and 18 new projects projects including a a social housing plan new hospitals and and the modernisation of bus and and metro terminals amongst others have been announced in in a a a a a drive to preserve jobs and revitalise the the sector Despite these measures construction is is projected to to decline by 20% in in 2020* and our Group will not be immune to to this downturn * According to forecasts made by Statistics Statistics Mauritius: https://statsmauritius govmu org/Pages/Statistics/By_ Subject/Construction/SB_Construction aspx
PROSPECTS FOR
the future For the first semester of FY2021 our projections are relatively positive especially compared to other industries Our core business segment locally is expected to maintain a a a good level of activities as we progress on several large- scale infrastructure projects initiated before the lockdown For the the second half of the the financial year fin in particular we are are prepared to face the wide-ranging ramifications of this pandemic As consumers grapple with uncertainty over the future lower household incomes coupled with a rise in unemployment and a a a sharp depreciation of the Mauritian Rupee are leading to a a a decline in in spending power These trends will no doubt affect revenues for the the Group at large in the the second semester of FY2021 “We take comfort in in knowing
that our performance was on an an upward trend and revenue would have surpassed last year’s Rs 3 2 billion track record ”
[ ]
UBP INTEGRATED REPORT 2020 - 9 FINANCIAL CAPITAL CORPORATE MANAGEMENT STATEMENTS REPORTS GOVERNANCE APPROACH
ABOUT US INTRODUCTION