Phoenix Beverages Limited, the Port Louis-listed beverage conglomerate, swung into an unexpected first-quarter net loss as severe factory bottlenecks in Réunion Island and stubborn raw-material inflation wiped out solid domestic demand in its home market, testing the drinks group during an ambitious regional expansion.

The beverage maker posted the shortfall of MUR18 million ($381,450) for the quarter ended Sept. 30, a reversal from the MUR88.7 million ($1.88 million) net profit posted a year earlier, burdened by rising shipping bills, packaging costs, and acute offshore operational strains.

Bottling crisis hits the bottom line

Operating income slid 36.3 percent to MUR136.45 million ($2.89 million), while pretax profit tumbled 68.4 percent to MUR38.92 million ($824,996). Surging debt service compounded the margin squeeze, with finance costs climbing 17.8 percent to MUR96.44 million ($2.04 million) during an environment of elevated borrowing and capital spending.

The group posted a loss per share of MUR0.20 ($0.0042), compared with restated earnings of MUR0.40 ($0.0085) a year ago, reflecting a recent 10-for-1 stock split. Standalone company profit fell 49.2 percent to MUR49.98 million ($1.06 million) as pricier inputs offset a 1.2 percent bump in Mauritian volume.

Seychelles resilience buffers regional losses

Top-line revenue held steady, edging up 1.1 percent to MUR3.66 billion ($77.55 million), anchored by local consumers. Mauritian domestic revenue jumped 8.9 percent to MUR2.79 billion ($59.10 million), generating MUR209.59 million ($4.44 million) in segment profit. In contrast, international sales shrank 17.8 percent, sinking into a steep operating loss.

Factory bottlenecks in Réunion Island triggered the regional downturn, cutting revenue to 5.0 million euros ($5.79 million) and widening operating losses to 3.4 million euros ($3.94 million). Offsetting that pain, Seychelles Breweries Ltd. lifted turnover 21 percent to SCR 168 million, tripling net profit to SCR 17 million ($1.21 million).

Restructuring pushes assets past $430 million

The choppy quarter followed major corporate dealmaking. On July 22, the group closed a court-sanctioned scheme of arrangement that absorbed Camp Investment Co. and Phoenix Investment Co., making Phoenix Management Co. a subsidiary. The maneuver expanded share capital to MUR2.99 billion ($63.39 million) across 206,105,369 shares in issue.

Balance sheet expansion accompanied the transaction, with total assets growing to MUR20.35 billion ($431.34 million) from MUR19.77 billion ($419.12 million) in June. Equity crept up to MUR9.07 billion ($192.23 million), even as parent books logged an unhedged fair-value slide tied to MERJ Exchange share swings.

Island distribution deal fuels business comeback

Executive leadership is now betting on commercial distribution to restore momentum across damaged islands. With newly inked Coca-Cola distribution rights underway in Réunion alongside tighter procurement rules, management expects factory throughput to recover in coming quarters, stabilizing margins across its Indian Ocean supply footprint.