Terra Group


Our Business at a Glance

Our Organisational Structure

The Group consists of four autonomous clusters: Cane, Brands, Power, and Property and Leisure. Each cluster offers unique business know-how that sets it apart from its competitors and that provides a strong platform for value growth.

The clusters are autonomous in their decision-making, budgeting, reporting and day-to-day operations. Each cluster’s leadership team is fully accountable for their respective performance. Leadership teams are also empowered to develop their businesses and realise international growth opportunities in line with proposals and plans approved by Terra’s Board of Directors.

Centralised functions support the clusters to build a shared performance-based culture and drive operational excellence and efficiencies across the Group.

Terra Mauricia Ltd

Overview - Group profit - Loss after Tax [MUR'M]

*The 2019 figures have been restated

Value We Created in 2022

Our Business Model

As a Group, our business model hinges on our ability to secure a competitive advantage and create stakeholder value across our four clusters, each of which seeks to optimise value from the Group’s core assets and activities across the different stages of the sugar value chain.

Chairman - Alain Rey

Chairman’s Message

While the past year was not without its challenges, such as high inflation and interest rate hikes, Terra’s response to the tough geo-political environment, and its strong rebound from the effects of the Covid-19 pandemic, highlighted the Group’s resilience. Terra delivered a record performance this year, achieving a profit after tax of MUR 1,049.5 million, up from MUR 316.7 million in 2021.

What is particularly noteworthy is the extraordinary effort made by the management team and the entire workforce to minimise the impact of the challenging and unpredictable operating environment.

Managing Director’s Message

This year, Terra posted a record-high profit after tax of MUR 1,049.5 million, up from MUR 316.7 million in 2021. We further recorded strong growth in earnings per share of MUR 3.93 (2021: MUR 2.03), enabling us to increase the dividend paid to Terra shareholders by 18% to MUR 227.5 million.

Terra’s performance demonstrates our resilience and agility to overcome challenges and remain competitive in a challenging economic and consumer environment. It is also important to note that we could not have delivered this result if we did not have a clear strategic plan delivered via four strong and differentiated business clusters. In parallel, we continued to review our investment portfolio to streamline it further and concentrate on strategic investments.

Managing Director - Nicolas Maigrot

Financial Review

Group turnover for 2022 increased by MUR 381.6 million to MUR 6.6 billion, while Group profits for the year stood at MUR 1,049.5 million, an increase of MUR 732.8 million from a profit of MUR 316.7 million in 2021. All Group clusters posted improved results, apart than the Power cluster, which recorded an operational loss of MUR 77 million due to unprecedented increases in coal prices. This loss was mitigated by the share of the cluster’s associate profit and a net reversal deferred tax provision. Overall, Group results were otherwise negatively impacted by total non-recurring items of MUR 94.8 million, caused by net unfavourable fair value movement on investments.

The net asset per share at 31 December 2022 was MUR 70.61, boosted by the increased Group net profits and the revaluation of land and buildings in 2022, that gave rise to a revaluation surplus of MUR 1.6 billion. The Group’s balance sheet remains strong, with owners’ interest at MUR 16.1 billion, Group gearing remaining at 22.7%, and interest cover (based on profit before finance costs) being 4.2 times as at year-end 2022. This financial position enables us to remain on the lookout to secure new investment opportunities.

Our Stakeholder Relationships

Our ability to deliver value depends on the contribution and activities of various stakeholders and the nature and quality of our relationships with these stakeholders at Group and cluster levels.

The diagram briefly outlines the stakeholder groups we believe have the most substantive impact on Terra’s ability to create value over the short, medium and long term. We consider their level of interest in Terra’s activities and their influence on strategy development and execution.

On the following pages, we review the value each stakeholder group contributes to Terra, summarise our engagement approach, identify their priority interests and concerns relating to our activities, and assess the quality of our engagement with that stakeholder group.

We remain committed to understanding our stakeholders’ interests and concerns and applying relevant inputs to our decision-making to ensure value creation. We provide additional context on these stakeholder relationships in the cluster reviews.

Terra’s stakeholder map

Overview - Terra’s stakeholder map

Managing our Material Risks

Risk management

Terra has a structured and systematic process of identifying and managing all material risks across the Group. At the end of 2020, Ernst & Young (EY) was appointed to review the Risk Management Framework and the Group Risk Policy. During this exercise, the risks of each cluster and those relating to the Group were reassessed. The principal risks that have a material impact on Terra’s ability to create value at Group level are outlined below. Cluster-level risks are shown in their respective operational review.

Role of the Board and Audit and Risk Committee

The Board provides oversight over Terra’s risk framework, policies and processes. While it delegates these matters to the Audit and Risk Committee and a Group Risk Management Committee, composed of the Managing Director, the Group Chief Finance Officer and the Administrative Executive, it remains ultimately responsible for the development and implementation of the risk management strategy and plan. The Board is satisfied that the Group’s risk management processes are effective and details of the internal controls, audit and risk-management framework are shown on pages 103 to 109.

The main residual risks at group level as at 31 December 2022 are summarised in the list below. Residual risks relate to risks that remain after risk mitigating activities have taken place. They are presented in decreasing order of severity.