In conversation with
our Chairman.
How would you evaluate Velogic’s performance in FY 24?
During the financial year 2024, Velogic reinforced its robust commercial position across its main markets, as illustrated by healthy financials. The Group has shown resilience amid an economic environment characterised by subdued consumption, volatile freight rates, and shifting dynamics in its main markets. The diversity of the markets and countries in which the Group operates enabled it to deliver top and bottom-line results consistent
with last year.
As a result, Group revenue remained stable at MUR 3.428 bn (FY 23: MUR 3.378 bn), while the operating environment throughout FY 24 slightly affected our overall profitability, which experienced a marginal decrease. Velogic maintained a relatively satisfying performance compared to global logistics players, demonstrating its ability to navigate headwinds, thanks to timely strategic adjustments.
Once again, the teams went the extra mile to service our clients and explore new growth opportunities in the territories where the Group operates. Their efforts have not only strengthened relationships with existing partners and customers, but also expanded the Group’s portfolio across various economic sectors, service lines, and geographic locations.
During the year, the challenges were manifold. How did the Group address them?
Faced with operational challenges in the first quarter of the financial year 2024, the management swiftly mobilised to face prevailing headwinds. Several cost containment measures were implemented, including rightsizing initiatives in India, the disposal of the remaining shares held in the French entity, and further digitalisation of the procurement process. These actions have enhanced productivity and efficiency across all business segments.
In Kenya, operations were materially affected by the indirect impact of macro-economic imbalances that weighed on the Kenyan Shilling, which depreciated by 15% against major currencies until January 2024. This depreciation contributed to a 21% increase in fuel prices during the same period, which impacted our operating costs and the performance of our Kenyan entities.
Throughout the year, the landside logistics operations benefitted from various initiatives. In Mauritius, the segment capitalised on operational innovation, while in India, a road haulage service was launched. In Kenya, we strengthened our partnership with tea growers, further consolidating our position in a promising market. Our sugar packing and shipping operations have continued to grow, driven by strong commercial acumen. In Madagascar, our team has implemented measures that significantly improved our operational efficiency. Moreover, our strategy to diversify our market, aiming towards a more varied product mix, has been well executed. These measures have both contributed to delivering bottom-line growth despite a fall in revenue in these operations.
Despite disruptions to the growth momentum in its main markets, Velogic maintains its profitability and a strong financial footing. What internal factors contribute to this resilience?
Velogic’s resilience is rooted in its diverse portfolio. Indeed, its integrated services across the supply chain, along with its strategy of continuous geographical expansion, protect the Group by mitigating risks associated with weaknesses in specific business units or geographies.
Another key factor is our continued investment in the training and development of our workforce to ensure our team members are suitably equipped to adapt to prevailing conditions and tackle future challenges. Our team’s ability to innovate, and responsiveness to changing customer needs have been instrumental in Velogic’s growth.
Over the years, our customers have gained trust in our expertise and services, as we leverage both to consistently deliver bespoke supply chain solutions that meet their needs, regardless of their industry or location. We are committed to deepening our relationships with our customers and partners worldwide, thereby consolidating our role as their strategic partner.
What value has Velogic created for its shareholders during the year?
Velogic has faced the impact of local subdued stock market conditions, losing MUR 6.40 per share, or 27.5%, to close at MUR 16.90. Nonetheless, we upheld our tradition of distributing dividends. During the financial year, MUR 1.13 per share was paid to shareholders, representing a yield of some 6.7% on the close of the financial year share price.
While market conditions have been less favourable, I want to assure all shareholders that our commitment to creating long-term value remains unwavering. The decrease in share price neither reflects the Group’s underlying strength nor the progress made in implementing its strategy, which has been designed to deliver sustainable returns over time. Amid headwinds, our adherence to sound financial principles, prudent risk management, and well-established corporate governance practices have undoubtedly strengthened our foundation for future growth.
In last year’s report, you mentioned Boston Consulting Group (BCG) recommendations to enhance the Board’s effectiveness. What progress has been made in their implementation?
The Board has fully endorsed the recommendations of the BCG. While the report underscored some of our strengths, it also pointed out some areas of improvement, especially with regards to skills diversity and gender balance. These issues were discussed, thereby leading to the appointment of two additional female directors on the Board, namely Mrs. Soorya Devi Oogarah-Ramchurn and Mrs. Hanjali Devi Permalloo-Le Roux, during the financial year. Consequently, at the end of the financial year, three out of the twelve Board members were women.
BCG’s experts also recommended improvements to our IT security systems. All our platforms are currently being upgraded to ensure that both software and network remain secure and protected against attacks. Moreover, our team members receive regular training to mitigate risks of cyber-attacks and scams.
In terms of sustainability, could you highlight this year’s achievements and their significance in the value-creation process?
Throughout the financial year 2024, the management and operations teams dedicated significant efforts to advancing Velogic’s sustainability agenda, in line with the Rogers Group’s strategy, to foster social inclusion and build climate resilience. Our initiatives align with six pillars outlined by the SigneNatir Pact of Business Mauritius: energy transition, circular economy, biodiversity, vibrant communities, inclusive development, and Diversity, Equity, and Inclusion.
When it comes to inclusive development, our actions have centred on the Roche Bois region, adjacent to our operations at Mer Rouge. Over the past year, we have led several community-based initiatives, such as a blood donation and a road safety awareness project. We are more committed than ever to making a positive and lasting impact on the surrounding communities.
Regarding climate resilience, we are pleased to report that the Board has approved an investment of MUR 64 m under the CNIS Renewable Energy Scheme of the CEB. At the time of writing, the installation of solar panels to promote renewable energy adoption is being completed. This 1.1 MW solar farm is expected to cover 100% of the annual consumption of the Freeport Operations (Mauritius) facility at Mer Rouge, which accounts for approximately 85% of the Group’s electricity usage in Mauritius. This farm will be coupled with a Smart Energy Metering Monitoring System, providing our maintenance team with real-time data to optimise consumption, thereby reducing our carbon emissions by approximately 1,856 tCO2eq.
We have also made significant progress in our transition towards a zero-waste value chain. Building on the zero-waste to landfill approach implemented at Sukpak, Sustainable Solid Waste Management practices are being implemented at Mer Rouge and Riche Terre. The main initiative is the recycling of wooden pallets through our partnership with local recyclers and NGOs. In FY 24, this project successfully diverted 1 ton of waste from the landfill. We are also reducing the use of bubble wrap to the bare minimum.
Velogic’s efforts over these past years have been recognised with the PwC Sustainability Award, which we received for two consecutive years (2023 and 2024), as well as the 2024 Environmental Awards (Logistics and Transportation category) from the Ministry of Environment, Solid Waste Management, and Climate Change.
Looking ahead to FY 25, considering the likely persistence of a volatile business climate and geopolitical tensions, what are Velogic’s growth prospects for the upcoming year and beyond?
We expect the prevailing level of uncertainty to continue throughout most of the financial year 2025. Global events are likely to weigh on consumption and market sentiment. We expect our overseas operations to contribute roughly 50% of our results in the next financial year.
In Mauritius, positive measures to support local consumption and export-oriented enterprises have bolstered efforts to sustain a feel-good factor. These measures, coupled with good visibility in the hotel, construction, and sugar cane sectors, should drive economic growth and foster trade. We are confident that the recent acquisition of a local freight forwarder will strengthen our operations in this segment, paving the way for improved performance and future growth.
After a tense calendar year 2023, we expect Kenya’s economic conditions to keep improving. The Kenyan Shilling has shown fresh resilience against major currencies, appreciating by 21% against the USD since February 2024. The local economy is expected to grow by 5.4% in 2024, driven by strong agricultural output and increased investments. However, the retail price of fuel, which stays relatively high at KES 137.1, remains 4% higher than the price of KES 132.4 that prevailed in early 2023. This poses an ongoing, albeit reduced, challenge to transportation and production costs across the country.
The opening of our Tanzania office at the start of this financial year marks another key milestone in our regional expansion strategy in East Africa and the Rogers Group’s internationalisation agenda. This move further extends our reach in this dynamic region, enabling us to better serve clients in landlocked countries. Madagascar and Reunion offer stable operating conditions and good prospects, while India’s operations remain highly price-sensitive within an intensely competitive market.
Any final thoughts you would like to share with Velogic’s stakeholders?
Over the past eighteen months, Velogic’s growth ambitions have been curtailed by challenging operating conditions, particularly in Kenya. After a cautious approach to expansion, the company is juggling with opposing dynamics: while some market stability seems to offer new opportunities, cost inflation, especially on the wages side, is likely to impact on margins.
However, with a strong balance sheet, a highly skilled professional team, a loyal customer base, and healthy financial ratios, we expect Velogic to sustain growth in the upcoming financial year and demonstrate greater resilience than its competitors.
I will conclude by expressing my sincere thanks to all members of the Board of Directors for their insightful guidance and steadfast support. I would also like to extend my gratitude to Velogic’s leadership team, particularly the CEO, Vishal Nunkoo. I am confident that the company is on solid foundations and well-prepared to tackle the challenges that lie ahead.
During the financial year 2024, Velogic reinforced its robust commercial position across its main markets, as illustrated by healthy financials. The Group has shown resilience amid an economic environment characterised by subdued consumption, volatile freight rates, and shifting dynamics in its main markets. The diversity of the markets and countries in which the Group operates enabled it to deliver top and bottom-line results consistent
with last year.
As a result, Group revenue remained stable at MUR 3.428 bn (FY 23: MUR 3.378 bn), while the operating environment throughout FY 24 slightly affected our overall profitability, which experienced a marginal decrease. Velogic maintained a relatively satisfying performance compared to global logistics players, demonstrating its ability to navigate headwinds, thanks to timely strategic adjustments.
Once again, the teams went the extra mile to service our clients and explore new growth opportunities in the territories where the Group operates. Their efforts have not only strengthened relationships with existing partners and customers, but also expanded the Group’s portfolio across various economic sectors, service lines, and geographic locations.
Faced with operational challenges in the first quarter of the financial year 2024, the management swiftly mobilised to face prevailing headwinds. Several cost containment measures were implemented, including rightsizing initiatives in India, the disposal of the remaining shares held in the French entity, and further digitalisation of the procurement process. These actions have enhanced productivity and efficiency across all business segments.
In Kenya, operations were materially affected by the indirect impact of macro-economic imbalances that weighed on the Kenyan Shilling, which depreciated by 15% against major currencies until January 2024. This depreciation contributed to a 21% increase in fuel prices during the same period, which impacted our operating costs and the performance of our Kenyan entities.
Throughout the year, the landside logistics operations benefitted from various initiatives. In Mauritius, the segment capitalised on operational innovation, while in India, a road haulage service was launched. In Kenya, we strengthened our partnership with tea growers, further consolidating our position in a promising market. Our sugar packing and shipping operations have continued to grow, driven by strong commercial acumen. In Madagascar, our team has implemented measures that significantly improved our operational efficiency. Moreover, our strategy to diversify our market, aiming towards a more varied product mix, has been well executed. These measures have both contributed to delivering bottom-line growth despite a fall in revenue in these operations.
Velogic’s resilience is rooted in its diverse portfolio. Indeed, its integrated services across the supply chain, along with its strategy of continuous geographical expansion, protect the Group by mitigating risks associated with weaknesses in specific business units or geographies.
Another key factor is our continued investment in the training and development of our workforce to ensure our team members are suitably equipped to adapt to prevailing conditions and tackle future challenges. Our team’s ability to innovate, and responsiveness to changing customer needs have been instrumental in Velogic’s growth.
Over the years, our customers have gained trust in our expertise and services, as we leverage both to consistently deliver bespoke supply chain solutions that meet their needs, regardless of their industry or location. We are committed to deepening our relationships with our customers and partners worldwide, thereby consolidating our role as their strategic partner.
Velogic has faced the impact of local subdued stock market conditions, losing MUR 6.40 per share, or 27.5%, to close at MUR 16.90. Nonetheless, we upheld our tradition of distributing dividends. During the financial year, MUR 1.13 per share was paid to shareholders, representing a yield of some 6.7% on the close of the financial year share price.
While market conditions have been less favourable, I want to assure all shareholders that our commitment to creating long-term value remains unwavering. The decrease in share price neither reflects the Group’s underlying strength nor the progress made in implementing its strategy, which has been designed to deliver sustainable returns over time. Amid headwinds, our adherence to sound financial principles, prudent risk management, and well-established corporate governance practices have undoubtedly strengthened our foundation for future growth.
The Board has fully endorsed the recommendations of the BCG. While the report underscored some of our strengths, it also pointed out some areas of improvement, especially with regards to skills diversity and gender balance. These issues were discussed, thereby leading to the appointment of two additional female directors on the Board, namely Mrs. Soorya Devi Oogarah-Ramchurn and Mrs. Hanjali Devi Permalloo-Le Roux, during the financial year. Consequently, at the end of the financial year, three out of the twelve Board members were women.
BCG’s experts also recommended improvements to our IT security systems. All our platforms are currently being upgraded to ensure that both software and network remain secure and protected against attacks. Moreover, our team members receive regular training to mitigate risks of cyber-attacks and scams.
Throughout the financial year 2024, the management and operations teams dedicated significant efforts to advancing Velogic’s sustainability agenda, in line with the Rogers Group’s strategy, to foster social inclusion and build climate resilience. Our initiatives align with six pillars outlined by the SigneNatir Pact of Business Mauritius: energy transition, circular economy, biodiversity, vibrant communities, inclusive development, and Diversity, Equity, and Inclusion.
When it comes to inclusive development, our actions have centred on the Roche Bois region, adjacent to our operations at Mer Rouge. Over the past year, we have led several community-based initiatives, such as a blood donation and a road safety awareness project. We are more committed than ever to making a positive and lasting impact on the surrounding communities.
Regarding climate resilience, we are pleased to report that the Board has approved an investment of MUR 64 m under the CNIS Renewable Energy Scheme of the CEB. At the time of writing, the installation of solar panels to promote renewable energy adoption is being completed. This 1.1 MW solar farm is expected to cover 100% of the annual consumption of the Freeport Operations (Mauritius) facility at Mer Rouge, which accounts for approximately 85% of the Group’s electricity usage in Mauritius. This farm will be coupled with a Smart Energy Metering Monitoring System, providing our maintenance team with real-time data to optimise consumption, thereby reducing our carbon emissions by approximately 1,856 tCO2eq.
We have also made significant progress in our transition towards a zero-waste value chain. Building on the zero-waste to landfill approach implemented at Sukpak, Sustainable Solid Waste Management practices are being implemented at Mer Rouge and Riche Terre. The main initiative is the recycling of wooden pallets through our partnership with local recyclers and NGOs. In FY 24, this project successfully diverted 1 ton of waste from the landfill. We are also reducing the use of bubble wrap to the bare minimum.
Velogic’s efforts over these past years have been recognised with the PwC Sustainability Award, which we received for two consecutive years (2023 and 2024), as well as the 2024 Environmental Awards (Logistics and Transportation category) from the Ministry of Environment, Solid Waste Management, and Climate Change.
We expect the prevailing level of uncertainty to continue throughout most of the financial year 2025. Global events are likely to weigh on consumption and market sentiment. We expect our overseas operations to contribute roughly 50% of our results in the next financial year.
In Mauritius, positive measures to support local consumption and export-oriented enterprises have bolstered efforts to sustain a feel-good factor. These measures, coupled with good visibility in the hotel, construction, and sugar cane sectors, should drive economic growth and foster trade. We are confident that the recent acquisition of a local freight forwarder will strengthen our operations in this segment, paving the way for improved performance and future growth.
After a tense calendar year 2023, we expect Kenya’s economic conditions to keep improving. The Kenyan Shilling has shown fresh resilience against major currencies, appreciating by 21% against the USD since February 2024. The local economy is expected to grow by 5.4% in 2024, driven by strong agricultural output and increased investments. However, the retail price of fuel, which stays relatively high at KES 137.1, remains 4% higher than the price of KES 132.4 that prevailed in early 2023. This poses an ongoing, albeit reduced, challenge to transportation and production costs across the country.
The opening of our Tanzania office at the start of this financial year marks another key milestone in our regional expansion strategy in East Africa and the Rogers Group’s internationalisation agenda. This move further extends our reach in this dynamic region, enabling us to better serve clients in landlocked countries. Madagascar and Reunion offer stable operating conditions and good prospects, while India’s operations remain highly price-sensitive within an intensely competitive market.
Over the past eighteen months, Velogic’s growth ambitions have been curtailed by challenging operating conditions, particularly in Kenya. After a cautious approach to expansion, the company is juggling with opposing dynamics: while some market stability seems to offer new opportunities, cost inflation, especially on the wages side, is likely to impact on margins.
However, with a strong balance sheet, a highly skilled professional team, a loyal customer base, and healthy financial ratios, we expect Velogic to sustain growth in the upcoming financial year and demonstrate greater resilience than its competitors.
I will conclude by expressing my sincere thanks to all members of the Board of Directors for their insightful guidance and steadfast support. I would also like to extend my gratitude to Velogic’s leadership team, particularly the CEO, Vishal Nunkoo. I am confident that the company is on solid foundations and well-prepared to tackle the challenges that lie ahead.