Bidvest feels the pain, will dispose of one fishing vessel
Bidvest Namibia managed to increase its group revenue by 6.2% for the first half of its financial year, 01 July to 31 December 2016, but operating profit declined by just over 82%. This profit implosion also diluted headline earnings per share by a massive 78%.
Bidvest Namibia Ltd announced its interim results for the second semester 2016, on Friday 24 February 2016 on the Namibian Stock Exchange News Service, as well as on the group’s website. This is the first half of the group’s financial year which ends on 30 June.
Although group revenue inched up for the semester to N$1.958 billion (2015: N$1.843bn), operating profit declined by N$100 million (82%) from N$121.5 million in the corresponding 2015 period to only N$21,7 million in the reporting period. Full-year trading profit for the 2015/16 financial year was N$294.89 million.
Gross profit for the semester declined from N$313 million in the corresponding period in 2015 to N$280 million.
The interim dividend was reduced by 80% to 4 cents per share.
Group CEO, Sebulon Kankondi stated at the release of the interim results that all divisions posted a disappointing performance.
“The Fishing division is still being challenged by nature and policy factors which remain beyond our control. Efforts are currently engaged in obtaining enough quota to ensure full fleet utilisation, and introducing cost limiting measures. Hard currency prices decreased by 11,2%, which was partially offset by the weakened exchange rate. Lower tonnages on average were caught as well as smaller fish sizes.”
“During the six months under review the fishing vessels mainly operated on quota usage agreements versus own allocated quotas, which reduced gross profit significantly.”
“Freight and Logistics remains on a steady but slow pace with no prospects of any projects on the immediate horizon. The oil and gas industry remains subdued.”
“Food and Distribution also failed to meet expectations. Revenue did not grow in line with expectation, but the main problem remained stock-related costs. A specific action plan has now been designed for problem areas which will be monitored stringently.”
“Results at the Commercial and Industrial Services and Products division were satisfactory. Unfortunately, losses continued at Voltex and the economic climate is affecting all entities in this division negatively.”
“The Automotive division also disappointed as the new vehicles market plummeted by lessened consumer spending, a tight belt on government spending and interest rates and inflation on the rise. The used vehicle market as a result recovered and showed good performance. However, this did not make up for the overall performance.”
On the prospects for the second half of the financial year, Kankondi said there is no indication that the market and economic climate will recover any time soon.
“Challenges are certainly evident at the Fishing division, but opportunities for new partnerships and efficiencies will be pursued. The Fishing division still has overcapacity and therefore a vessel will be disposed of.”
“Overall, the group remains open to acquisitive growth, but the focus will be to retain its current business and to optimise operational structures and processes.”
An interim cash dividend of 4 cents per share will be paid to shareholders who are in the register at the close of business on Friday, 10 March 2017. The last day to trade cum dividend is this Friday, 03 March 2017. The dividend will be paid on Tuesday, 28 March 2017.
Bidvest Namibia’s interim financial results were signed off by group chairm, Lindsay Ralphs and CEO Kankondi.