MK: 30 Days Late on Financial Statements, Major Losses Concerns

The deadline of November 30th has passed without Air Mauritius submitting its audited financial statements for the fiscal year ending March 31, 2024. l’Express sources indicated that the company’s financial results could show losses exceeding €4 million (approximately Rs 197 million).

In September, Air Mauritius received a special extension from the Registrar of Companies to submit its financial reports; however, this extension was disregarded, and the company has yet to present its financial standings.

According to insiders, Air Mauritius has requested another extension, but no official response has been provided to date.

Multiple reasons have been suggested to explain the company’s failure to meet the deadline set by the Registrar of Companies, but insiders warn that Air Mauritius’s financial situation appears critical.

Recent estimates suggested that the company’s financial results could indicate losses that starkly contrast with its operational profit of €2.2 million (Rs 108 million) reported in December 2023.

This dramatic decline is raising questions about the events over the past eight months that led Air Mauritius from profitability to significant losses.

At the general assembly on July 1, 2024, the board of directors committed to convene an extraordinary general meeting before the end of September to seek shareholder approval for the financial statements.

Since this commitment was not fulfilled, Air Mauritius was granted an extension until November 30.

Typically, a company has six months to submit its financial statements following the closure of its accounts, but even with this extension, no submissions have been made.

One reason cited for the delay is the lack of an active board of directors. Members resigned following a government change, leaving Air Mauritius without the necessary body to approve its accounts.

However, this excuse is viewed skeptically by some. “This kind of approval shouldn’t be left to the last minute.

The process should have started well before the deadline,” noted a knowledgeable source.

Moreover, reports suggested that the external auditor for Air Mauritius may have refused to sign the accounts, making submission impossible.

Compounding the issue, internal tensions are escalating, with management informing employees that there are no funds available for negotiating collective agreements.

Beyond governance issues, Air Mauritius’s financial health appears precarious.

Initial estimates predicted profits of only €1.9 million (Rs 94 million) for the current financial year, down from €6 million (Rs 296 million) the previous year.

Thus, the company may be facing losses greater than €4 million. Criticism of Air Mauritius’s management has been ongoing.

The decision to cancel flights to Rome—a historically profitable route—has drawn backlash, particularly as before the pandemic, approximately 70,000 Italian tourists visited the island each year.

Planned for a relaunch in October 2024, the resumption of this service might have bolstered profits; however, in July, the company announced it would not proceed with these flights, citing a “shift in business strategy.”

The cancellation of this route, coupled with refunds for already purchased tickets, has likely exacerbated the company’s financial difficulties.

Additionally, Air Mauritius is reeling from decisions made during its period of voluntary administration.

The drastic reduction of its fleet from 13 to seven aircraft has severely impacted operational capacity.

With recurring breakdowns and frequent grounded planes, the airline is finding it challenging to provide optimal service.

Megh Pillay, the former Chief Executive Officer of Air Mauritius, previously warned of the impending challenges, stating:

“The company emerged from voluntary administration with its wings clipped by over 40%, six fewer aircraft, and a significantly reduced experienced workforce.”

On Tuesday morning , December 3, at 10:07 AM, the communications manager for Air Mauritius assured that they would “get back” to l’Express.

However, despite multiple follow-ups yesterday, no official response has been received thus far, leaving expectations for explanations from the airline unfulfilled.

Source: l’Express