Rikus Grobler | Feb 8, 2018 | 0
Bidvest barely scrapes through
In the wake of Bidvest’s action late last year against the Ministry of Fisheries and Marine Resources over horse mackerel quotas, the impact of this loss became apparent this week when Bidvest announced its interim financials through the Namibian Stock Exchange. To top the conglomerate’s woes, its food and distribution divisions also underperformed resulting in a mere 0.7% growth in revenue for the period under review.
In a statement signed by board chairman, L. Ralphs and CEO, Sebby Kankondi, the CEO stated that the trading profit slumped by 18.9%, posting a rather subdued N$179.6 million. This is N$41.8 million less than in the prior year.
Highlighting the disproportionate contribution from Bidvest’s fishing operations, the interim financial results show that fishing subsidiary, Namsov, contributed 72.8% to trading profit.
This is the reason why the impact from the reduction in horse mackerel quotas is so severe. “The division experienced a decline of 23,1% as a result of the horse mackerel quota shortages following a smaller allocation of the 2014 quota reserve” said Kankondi.
“The tons of horse mackerel caught decreased by 35%, compared to the previous period. The exchange rate as well as hard currency prices helped to significantly offset the lower volumes on revenue,” he added.
Gross profit in this division decreased by 22% due to two vessels being tied up for more than a month during this period, as well as losses from experimental fishing in Gabon and Angola to try and curb idle-time losses.
Bidvest’s Food and Distribution also contributed to the dismal performance, as the two had disappointing results with trading profit declining by 28,8% compared to the previous comparative period.
Caterplus generated a profit, but the Taeuber & Corssen (T&C) business declined.
“One of the reasons was that Namib Poultry Industries terminated the distribution agreement with T&C in September, which is currently being challenged legally,” Kankondi added.
Meanwhile Bidvest’s other businesses in Freight and Logistics performed well as they showed a 25,1% increase in trading profit, despite lower project activity. “Commercial and Industrial Products and Services performed well, showing a 14,3% increase in trading profits. Bidvest Namibia Steiner more than doubled its revenue and had a positive influence on the improved numbers” he said.
Commenting on the outlook, Kankondi, said the fishing division is expected to continue to face challenges regarding horse mackerel quotas.
“Experimental fishing into other fishing grounds will be continued to curb idle time. The division is in the advanced stages of an exciting feasibility study into shore-based processing. The main focus and challenge continues to be creating sustainable access to quotas.”
“Strong results are expected from our commercial entities. Freight and Logistics will continue to perform well, but has fewer projects in the pipeline. The Food and Distribution division will continue its efforts to find innovative ways to supplement the loss of income from the loss of distribution of local poultry,” he said.