AGAINST a pedestrian trading backdrop, characterised by stubbornly high inflation, peak interest rates and minimal underlying economic growth, last Friday Bidvest delivered good results for the six months ended 31 December 2023. Revenue was up 8.8% to R62.2 billion and trading profit increased by 11.8% to R6.5 billion.
Chief executive, Mpumi Madisa said, “The Group delivered a pleasing result with five of our seven divisions reporting double-digit profit growth. This interim result reflects our businesses’ ability to rise above structural headwinds and deliver value for all stakeholders.”
Freight
Of particular interest to KwaZulu-Natal is the freight division. Bidvest Freight reported an outstanding result with trading profit increasing 16.0% to R1.3 billion. The terminal operations, which represent most of the division’s profit, delivered good contributions off high bases.
Modest growth in net bulk volumes handled through South African ports was the consequence of notable product mix changes with greater gas, fuel, wheat, sorghum and chrome volumes more than offsetting lower chemical, maize, manganese and coal volumes.
Port operations outside of South Africa continued to benefit from a redirection of mineral volumes. In addition, operations in Namibia benefitted from strong oil and gas industry activity in the region. Operational stoppages due to inclement weather and poor Transnet marine services were experienced in South African terminal operations during the six months from July to December 2023.
The repurposed butane tanks in Richards Bay were commissioned in October 2023. The other capital investment projects are progressing well for commissioning during 2025.
Clearing and forwarding profit grew on the back of higher air volumes and new business secured. The growth in air volumes is attributable to the ongoing port issues in South Africa. Trading was challenging for bulk packing into containers. ROFE rose to 60.1%.
Divisional topline
Services International. Trading profit, which rose 16.5% to R1.9 billion, grew strongly and is equally split between hygiene and facilities management services.
Commercial Products. Trading profit increased 2.2% to R741.3 million, which is satisfactory considering the very competitive, stagnant market.
Services South Africa. Trading profit increased 12.3% to R621.7 million, with all clusters delivering double-digit growth.
Branded Products. Delivered a stellar result with trading profit growing by 23.1% to R647.4 million.
Automotive. Trading profit declined 11.4% to R365.1 million, as South Africa’s automotive trading environment remains extremely difficult.
Financial Services. The turnaround to an improved performance is continuing with a 24.2% increase in core trading profit to R215.0 million, primarily driven by standout performances of Bidvest Bank and FinGlobal.
Adcock Ingram. Revenue grew in the Consumer and Hospital divisions but was flat in the Prescription and Over-The-Counter divisions. Bidvest owns an effective 63.0% in Adcock.
Bidvest Properties and Corporate. The Group owns a significant property portfolio, which is mainly Bidvest occupied, and spans South Africa, Namibia and the United Kingdom. Bidvest Properties delivered a good result with trading profit up by 7.9% to R341.3 million, driven by rental escalations and declining vacancies.
