Bidvest Namibia’s fishing division, BidFish, made a N$8, 4 million loss in the first half of the year, PSG Namibia said this week in an analysis of the company’s results.
Overall, Bidvest Namibia made a N$87 million profit for the six months ended 31 Dec 2017, but was weighed down by the poor performance of its fishing division.
According to PSG, the losses were attributed to currency appreciation, lower fish prices, regulatory levies increases and a moratorium that was placed on pilchard fishing early this year by the fisheries ministry.
“Revenues in this division declined as expected, but margins surprised on the downside,” PSG said.
“The exchange rate, size mix and hard currency prices had significant effects on the fishing division’s margins.”
The low biomass of pilchards has affected all players in the sector, after a moratorium was placed on pilchard fishing until 2020 by the fisheries ministry.
It said the company could have beaten expectations if the Namibian dollar depreciated severely.
“The actual result was a strong appreciation in the Namibian dollar, which weighed on the fishing division. We foresaw that oil and other commodity price increases would increase margins for the freight and logistics division.”
PSG said with very little detail available on the planned sale of the fishing business, the conclusion of the deal could take time.
“Bidfish is not expecting to receive an increase in quotas in the near future and the company is downsizing its fishing vessel fleet as it has more capacity than quota allotted to them.”
Bidvest has put the fishing division up for sale and media reports last month speculated that the division could be sold to Tunacor, a fishing company based in Walvis Bay.
PSG noted that Bidvest’s automotive division is largely at the mercy of the economic climate and government spending.
“The Novel Ford franchise does have power in its brands and should be able to ride out the cycle, but will see pressure in the near term. Slower government and consumer spending hamper growth in this division.”
PSG noted the group had now shifted its focus to customer services from sales.
“Sales in new vehicles declined over the reporting period, while used vehicle retail sales volumes remained fairly stable,” PSG said.
This comes as Novel Ford opened a second dealership in Windhoek to try to increase unit sales and accommodate better service delivery.
“This does not seem to have been successful, if looking at the -19.5 percent revenue growth in the First Half of 2018. If this new satellite office can just break even on its own, sales or services, this could aid toward receiving manufacturer’s incentives which would significantly impact the bottom line.”