Bidvest profit plunges 10.5%

Despite revenue surging 10%, Bidvest Namibia Ltd’s profits plunged by the same percentage on account of price regulation on fish in the Democratic Republic of Congo, and an oversupply of fish in its traditional horse mackerel markets, most notably Nigeria.
The group’s results were further impacted by its largest subsidiary, Namsov, having to contend with strict import restrictions, thus leading to a lower average realised selling price in US dollar for horse mackerel. Bidvest Namibia’s fishing operations contributed 81% of the group’s trading profit of N$245.7 million.
Bidvest Namibia Fisheries Managing Director, Jan Arnold, gave an overview of the fishing division’s performance citing the uncertainty regarding the allocation of horse mackerel quotas by the Ministry of Fisheries and Marine Resources, and the import restrictions in Nigeria, as the major setbacks Namsov had to ride out. “It was the sad story of the year gone by” he said.
Arnold added that the fishing operations were not quite prepared for the 25% import cap imposed by Nigeria, with a meagre 250,000 tons out of an earmarked 1.2 million tons making it to the Nigerian market as well as 150,000 tons for the Democratic Republic of Congo. Speaking on the local quota allocations, Arnold said that the fishing industry hinges on dependability adding, “we were kicked where it hurt.” According to Arnold, Bidvest has been engaging with the ministry to seek a favourable outcome.

As a result of the substantially reduced quota allocations, Bidvest Fisheries has had to berth two fishing vessels, with the crews being sent home. Bidvest Fisheries expects the fishing operations to continue to perform poorly for the next six-month period.  Positive news came from Namsea, another Bidvest Namibia Fishing subsidiary, which was expected to perform well with Arnold reporting that the pilchard resource looks healthy. According to Arnold, the pilchard market was expected to perform well with an upside expected. Twafika, a monk and hake operation, also performed satisfactorily but was not a big contributor while the Angolan fishing operation, Comet/Pesca Fresca showed huge potential. Bidvest Fisheries had as a consequence acquired new vessels for their Angolan operations which the group deems an attractive prospect with positive future expectations. Arnold said initiatives related to the harvesting of oysters yielded good indications for improved performance in future. Despite the oyster operation under-performing in the most recent financial year, Bidvest Fisheries employs an open farming approach to its oyster business in Lüderitz, expecting this business to turn profitable soon. According to Arnold, the Bidvest’s fishing operations, in particular Namsov, hold strong cash reserves to ease operations up until January 2015.