Mauritius-based luxury hotel group Sun Resorts SUNR.MZ pretax profit sank 44.3 percent in 2010, hit by the euro zone crisis and heavy discounting, the firm said on Tuesday.
Sun Resorts posted a 226.9 million Mauritius rupee ($7.70 million) pretax profit last year after the global economic downturn hit the island's tourist industry and hurt growth in one of Africa's traditionally most stable and prosperous economies.
Earnings per share fell 36 percent to 2.45 rupees.
The group's shares were stable at 60 rupees each.
"The year has been impacted by the euro zone crisis and the ongoing challenging economic conditions in our main source markets," the company said in a statement.
As the industry was still faced with an oversupply of rooms, heavy discounting has prevailed throughout the year."
The company said a strong rupee exchange rate against the European currencies further impacted average daily rates.
Room occupancy was at 68.4 percent during last year.
Sun Resorts declared a final dividend of 0.65 rupees compared to 0.60 rupees in 2009, which will bring the total dividend to 1.15 rupees against 1.10 rupees in 2009.
This year would be very challenging because the economic climate in the major source markets, mainly Europe, was expected to be difficult.
"With an expected increase in the number of rooms in the industry this year, we expect competition to intensify and rates will continue to be under pressure," the group said.
Tourism typically generates about 10 percent of the nation's gross domestic product and European tourists account for some two-thirds of arrivals.
Sun Resorts said the more modern Long Beach, which will replace former Coco Beach, is scheduled to open in April. (Reporting by Jean Paul Arouff)