New Mauritius Hotels Declines to 15-Month Low on Projects Revenue Concern

New Mauritius Hotels Ltd., the Indian Ocean island nation’s third-biggest company, fell to the lowest in 15 months on speculation a slowdown in tourism revenue means it will struggle to recoup project investments.

The stock declined 1 rupee, or 1 percent, to 99 rupees by the 1:30 p.m. close in Port Louis, the weakest level since June 2, 2009.

The company’s luxury hotel development in Marrakech, Morocco, had to be rescheduled as an economic slowdown in Europe damped demand, it said on Aug. 10. New Mauritius Hotels spent 4 billion rupees ($130 million) redeveloping the Trou aux Biches resort on the island, which is due to open in November.

“Sales for the Marrakech project have slowed down, requiring a review of the development program and NMH has invested funds in Trou aux Biches in a period where there is a lack of visibility in the tourism sector,” Vincent Lamusse, senior manager at Anglo-Mauritius Financial Services Ltd., said by phone from Port Louis today. “The investments have not generated any return as at now. Financial charges are hence higher, resulting in lower profits and dividends.”

Mauritius announced on Aug. 13 a 12 billion-rupee ($384 million) program to help the economy recover from the impact of the euro-area crisis and warned growth will be lower than expected in the budget because the weaker common currency has undermined exports and tourism revenue, its biggest foreign- currency earner. Two-thirds of visitors to the island are from Europe.

To contact the reporter on this story: Kamlesh Bhuckory in Port Louis via Johannesburg at 1999 or pmrichardson@bloomberg.net

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