A domestic flight that skidded off the main runway late Monday night during heavy monsoon rains is see at the Mumbai airport in Mumbai,India, Tuesday, July 2, 2019. (AP Photo/Rafiq Maqbool)
A domestic flight that skidded off the main runway late Monday night during heavy monsoon rains is see at the Mumbai airport in Mumbai,India, Tuesday, July 2, 2019. (AP Photo/Rafiq Maqbool)

Bidvest confident of Mumbai exit

By Edward West Time of article published Sep 3, 2019

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CAPE TOWN - Bidvest is confident it can sell its stake in Mumbai Airport, India by the end of the year for $86million (R1.31billion) in spite of imminent arbitration with majority shareholder GVK, which is attempting to prevent the sale, Bidvest chief executive Lindsay Ralphs said yesterday.

He spoke at the release of the annual results for the year to June 30. It proved to be a year in which diversification paid off for the services, trading and distribution services group, with four of seven divisions increasing trading profit. The share price had increased by more than 3percent to R184.23 by midday yesterday.

Headline earnings a share increased by 9.8percent to 1352.1cents.

A final cash dividend of 318c per share brought the total for the year to 600c, up 7.9percent.

Ralphs said Bidvest had received an offer from an infrastructure fund with other investments in airports to buy the 13.5percent stake in Mumbai Airport that was held by Bidvest subsidiary Bid Services Division (Mauritius).

He said they had already won two court cases, where financially struggling family-owned India company GVK had attempted to block the sale. GVK wants to increase its stake to 74percent from 50.5percent.

Bidvest’s trading profit increased 3.5percent to R6.7billion. Strong earnings growth was also reported from associates, including Adcock Ingram. Bidvest increased its stake to 50.1percent from 38percent, after buying shares in Adcock that the PIC were disposing of, and which the PIC did not wish to sell to foreign-owned firms, he said.

This was after Bidvest had initially considered selling its minority stake in the pharmaceutical group to black empowerment partners, but it could not find a funder for such as deal, said Ralphs.

He said Bidvest was “pleased” with the results given the weak trading conditions. The group ended the year on a strong footing, after making R3bn of acquisitions and maintaining conservative gearing.

Trading profit had increased by 3.5percent to R6.7bn in spite of flat revenue at R77.2bn. The R3bn acquisition of the Equestra fleet management company was expected to take effect from January 1 next year.

The combined services businesses, comprising services and financial services, representing two-thirds of operational profit, grew trading profit by 6.4percent, while the profit from the combined trading and distribution businesses contracted slightly.

Bidvest Corporate benefited from a strong performance in the property division, which has a portfolio of R8bn, as well as a fair value adjustment on Mumbai International Airport, but Namibia performed poorly.

The impact of the disposed fishing operations in Namibia and the revised agency model adopted by Mercedes-Benz, which affected the automotive division were broadly neutralised by revenue from bolt-on acquisitions.

Services delivered a strong organic result buoyed further by bolt-on acquisitions. Freight delivered a good result on higher bulk and liquid commodity volumes handled, while results from commercial products and electrical were somewhat disappointing.

Financial Services faced headwinds. The larger transactions were done within services, namely Aquazania and United Drone Services.

Minorities were bought out in Bidvest Namibia through a successful delisting offer. Bidvest’s flagship R1bn liquid petroleum gas storage project remained within budget and on time, said Ralphs.

Shares in Bidvest rose 2.38percent to close at R182.96 on the JSE yesterday.


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