Bidcorp warns second wave will dent interim earnings
DURBAN - BID CORPORATION (Bidcorp) said on Friday that its half-year earnings would decline after the second wave of Covid-19 put a dent in its performance for the six months to the end of December, despite a good start to the 2021 financial year.
The group said the pandemic would hit its headline earnings per share (Heps) from continuing operations to between 43 percent and 48 percent, or between 378.7 cents and 415.1c a share, from 728.3c reported last year.
It said its basic earnings per share (Eps) from continuing operations would fall between 35 percent and 40 percent to between 435.2c and 471.5c, from 725.4c a year earlier.
Bidcorp said in a trading guidance to investors that it managed a commendable result for the half-year against a backdrop of the catastrophic economic and social consequences of the pandemic on the hospitality, tourism, and leisure industries globally.
“Good asset management, excellent free cash flows and healthy profitability underpinned the pandemic-affected results.
“The protection of our employees in respect of their health, well-being and, where possible, maintaining their livelihoods, as well as ensuring the sustainability and preparedness of our businesses for the anticipated bounce back, have remained our key priorities,” the group said.
Bidcorp is an international food service group that was separated from the Bidvest Group and listed separately on the JSE in May 2016.
In the group’s first-quarter update for the three months to the end of September, it said it had seen recovery in sales, which peaked at 87 percent for the week to end of August 2 compared with the same week a year earlier.
However, group sales eased to 71 percent in the week to the end of November 8 after a second wave in the geographies in which it operates.
“Performance for the financial year started relatively well, with most geographies seemingly coming out of the worst of the Covid-19 first wave, with a positive financial performance through July and August, particularly in Europe and the UK,” Bidcorp said.
“This started deteriorating into September in the northern hemisphere and worsened into the second quarter, with Europe and the UK firmly in the grip of the harsh second wave.”
However, the group was fortunate that some geographies, such as Australia, New Zealand and Asia, performed very well, and its other emerging markets continued to improve on a month-to-month basis as the period progressed. “This gives us continued confidence that we will see a quick rebound in market conditions in all geographies as social restrictions and containment measures start easing,” the group said.
Bidcorp said it was confident its liquidity position would remain strong and able to weather the Covid-19 storm.
Bidcorp shares rose 4.14 percent on the JSE on Friday to close at R288.69.