Fishing and commercial services group - BIDVEST Namibia has surprised on the upside with a new burst of revenue growth in the half-year to December 31 2012, though overall group results were weaker. The fishing and commercial services group, listed on the Namibian Stock Exchange (NSX), on Friday announced a 35,8% revenue increase on the comparative period of 2011 to N$1,6 billion.
However, trading profit fell by 20,8% to N$250,6 million, reflecting growing pressure on fishing operations and some under-par performances by the group's commercial enterprises.
The board declared an interim dividend of 23 cents per share.
Bidvest chief executive officer Sebby Kankondi said higher revenue was mainly a result of the acquisition of T&C with effect from December 1, 2011. This helped drive a strong contribution from the food and distribution businesses. Higher volumes were also achieved by the freight and logistics and the commercial and services divisions.
The principal profit engine remained the fishing businesses, he added. They contributed 84,4% of the trading profit. However, strategic challenges came sharply into focus during the period.
'Our fishing operations are below prior year as a result of a 25% reduction in our quota allocations and a significant increase in quota rentals paid to other parties,' Kankondi said.
'The horse mackerel resource in Namibia remains strong. But competition from foreign operators in the Namibian fishing zone puts tremendous pressure on the availability and the quota price of this resource.'
He said foreign operators were shifting their attention to Namibian waters following the demise of fishing grounds in Mauritania and the South Pacific.
Within Namibia, falling consumer demand had created trading challenges for several of the group's non-fishing operations, said Kankondi.
Waltons, the stationery business, and the Cecil Nurse furniture brand had performed well, but other contributors to the commercial and industrial services division had recorded disappointing results.
Margin pressure and low project activity in November and December impacted results within the freight and logistics Division. The division is looking for a better second half as it is well positioned to provide services to companies engaged in oil and gas exploration.
The food and distribution services division had been impacted by falling real turnover across Namibia's wholesale and retail trade and had been further challenged by destabilisation in Namibia's chicken market following delays in the introduction of infant industry protection into the broiler industry.
'Going forward, our fishing businesses will investigate opportunities for deploying excess fleet capacity to other fishing grounds while certain commercial operations are eager to extend their footprint within Namibia,' Kankondi said.
'Management in all divisions will apply focused attention to areas of under-performance. Bidvest Namibia is an acquisitive company and our balance sheet remains strong. Opportunities for further acquisitions will be scrutinised closely,' he said.
By Staff Reporter