By Hilary Mare
MULTIPLE challenges have hit the operations of Bidfish significantly reducing the group’s gross profitability, interim financial results for the half-year ended December 31 2016 reveal.
Bidvest Namibia Fisheries Holdings (Pty) Limited (Bidfish) is the holding company of the various investments in the fishing industries of Bidvest Namibia.
According to results released by Bidvest Namibia which expressed overall disappointment in all of their subsidiaries, fishing performed worse than expected with among other concerns, horse mackerel market hard currency prices fell 11.2 percent, sizes caught were small and catch rate declined
“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 percent, 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.
“The macro-economic factors in the business environment contributed to a rather disappointing overall performance by all our divisions. Although best efforts were made to grow revenue, trading profit declined in the majority of our divisions,” outlines the report.
Fishing faced similar challenges as in the prior year with decreased quotas and expensive quota purchase costs. In addition, horse mackerel sales prices fell due to oversupply in the traditional markets and smaller catch sizes. Lower catch rates were also experienced.
The report highlights that the horse mackerel area faced challenges such as smaller fish sizes and decline in catch rates which impacted harshly on the profitability, high quota purchase costs created a steep decline in the trading profit of the division, market prices remain pressurised due to the economic climate in traditional markets and resultantly one vessel is up for sale to match the quota allocation with catch capacity.
Apart from Pesca Fresca in Angola doing well due to strong local fishmeal and international fish oil prices, local currency devaluation against the USD affected the results negatively. Pilchards as a resource remained a concern with no pilchard canning effort during the past six months.
Bidfish outlook also looks marred with challenges. With regard to horse mackerel there is concern over excess catch effort in Namibia and Angola on shared resource and hence new partner liaisons are being explored. There is further concern over decline in fish size mix caught and also concern on markets, foreign currency shortage and buying power.
With regard to other Bidvest divisions, 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. Skills shortages remain a challenge in the Namibian market and focus is placed on retaining and training current personnel in all areas,” said the report.
Bidfish comprises of a number of dynamic subsidiaries that are engaged in various sectors of the fishing industry in Namibia and Angola, offering a wide range of products which include frozen horse-mackerel, monkfish, sardinella, canned pilchards, other canned products, fishmeal, fish oil and oysters. All Bidfish companies own and operate their own vessels in the different sectors of the industry as well as the shore-based operational premises which are well suited for their needs.
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