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Friday, February 23, 2024

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Deloitte Mauritius CFO Survey Highlights The Changing Business Environment

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The contents of the Deloitte Mauritius CFO survey highlights were unveiled on Tuesday at the Hennessy Park Hotel. This first edition highlights the changing business environment and shares some key insights from CFOs in Mauritius.

This was followed by an exchange of views on the issues raised in this report. The representation of the sectors involved in this exercise is as follows:

Consumer, 27.6%; Technology, Media, and Communication, 11.1%; Financial Services (Banking, Insurance, non-banking segment, Financial Institutions), 15.6%; Manufacturing, Energy, and Natural Resources, 8.8%; Other sectors, 37.8%.

The Deloitte’s CFO Forum has as main aim to provide CFOs with a team of experts specialized in various fields and professionals whose specificity is to identify issues that can help the strong men of the companies to find the necessary tools to face the challenges that could escape their attention and the demands of the market.

Rajeev Tatiah, Assurance Leader, Deloitte Mauritius
Rajeev Tatiah, Assurance Leader, Deloitte Mauritius

For the first time ever, Deloitte has focused on Mauritian CFOs. The objective is to take stock of their mindset based on an in-depth survey of them. “This is an excellent initiative from Deloitte“, says Salim Hatteea, Finance & Administrative Manager of Industrial Gases Ltd. “We always have to look for new opportunities to ensure the future. We cannot keep the same business model. The challenges are mainly in the uncertainties that the world is facing. There is a lack of visibility. It is increasingly difficult to plan.”

How are financial leaders managing in the post pandemic era?

Is it through investing in and managing the adoption of new technological tools? What are the key priorities for the next three years? How are CFOs dealing with the high prices resulting from supply chain disruptions arising from the war between Russia and Ukraine? This report presents the views of our CFO community on the above questions.

Jane Chung
Jane Chung

70 % of the CFOs are optimistic about the future

As most economies have opened, nearly 70 % of the CFOs are optimistic about the future on the back of fewer COVID-19 cases, revival in consumer spending, improved export performance, and increased number of tourists in Mauritius. On the other hand, some CFOs expressed doubts about economic growth. In the consumer, retail, and travel and hospitality sectors, about 29 % of the CFOs expect to see negative growth (up to 10 %).

71 % expect revenue growth but increasing pressure on margins

About 71 % of the CFOs surveyed foresee revenue growth in the next year. However, they will have to manage a double-digit inflation, which could negatively affect their operating margins.

Increasing supply chain costs, employee salaries, and raw material prices (fueled by the global economic rebound that led to a sharp rise in commodity prices and supply bottlenecks) are some concerns that CFOs have reported.

Porus Doctor
Porus Doctor

Over 95 % of the CFOs are working towards the same priorities

CFOs have consistently picked up top-line growth, margin improvement, digital/finance transformation, and reduction in operating expenses as their priorities for the next three years.

80 % of the CFOs are preparing to sign higher pay checks in the next twelve months

One of the biggest challenges that Mauritius faces is its high dependence on the global economy for food supply and its core industries. For the past few months, the country has been battling the increase in commodity prices and fuel costs, along with disruptions in the supply chain.

Our survey highlights that 80 % of the CFOs, in overall, are preparing to offer higher pay checks to employees to help them combat inflation.

Moreover, sustained inflation can put pressure on the Bank of Mauritius (BoM) to increase interest rates, thus making credit costlier. Most of the CFOs expect the cost of debt to increase in the next year.

67 % of the CFOs are likely to pursue offensive M&A strategies

Most CFOs have opted for offensive M&A strategies. Those from the manufacturing, hospitality, and retail sectors expect to remain defensive in their M&A goals. They largely focus on acquiring assets to fill gaps in their core portfolios and quickly capturing synergy in the recently completed sales.

In contrast, CFOs from the financial services and technology sectors are likely to be more aggressive in their M&A strategies. They are considering acquiring competitors to accelerate consolidation in their sectors and digital transformation.

The meeting at Hennessy Park Hotel
The meeting at Hennessy Park Hotel

CFOs across sectors believe in technological advancement for efficiency and growth

The primary objective for adopting digital in finance is to bring efficiency in the financial processes and significantly enhance the role of financial leaders as business partners. The maximum return came from advanced data analytics.

Inflation, which has not been on the agenda for the past two decades, has made an unexpected comeback in Mauritius. Prices are now rising again. Despite the external shocks leading to soaring prices, CFOs remain positive about the economic and their companies’ financial outlooks.

The results shared above offer valuable insights to policymakers who must pay higher attention to the sectors that have suffered heavily due to the pandemic and inflation.

Overall, the responses show that optimism is rising but caution is still needed.

You can read the full report here:

Deloitte Mauritius CFO Survey Report

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