BIDVEST recorded R232.2 million in impairments, with kulula.com operator Comair, in which Bidvest has a 27.2 percent stake, contributing R209.7m to the losses.     Supplied 
BIDVEST recorded R232.2 million in impairments, with kulula.com operator Comair, in which Bidvest has a 27.2 percent stake, contributing R209.7m to the losses. Supplied 

Bidvest shares take a knock after warning of possible job losses

By Sandile Mchunu Time of article published Jun 2, 2020

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DURBAN - The Bidvest Group fell more than 5percent on the JSE yesterday after the diversified services and trading company warned of possible job losses as a result of coronavirus-related disruptions across its operations.

The group said the fallout from the pandemic was likely to result in a review of its business, as its full-year earnings were likely to decline more than 20percent for the year to the end of June. Bidvest recorded R232.2million in impairments during the period, with the Comair shareholding contributing R209.7m to the losses.

“This compares to a mark-to-market loss of R332m and share of associate profit of R257.3m in the prior year. The net impact year on year is a significant negative swing of R373.7m on attributable earnings and R467m in headline earnings,” the group said.

Bidvest has a 27.2 percent stake in Comair, which went into business rescue in May. Comair’s trading has been suspended on the JSE.

BIDVEST recorded R232.2 million in impairments, with kulula.com operator Comair, in which Bidvest has a 27.2 percent stake, contributing R209.7m to the losses. Supplied 


Bidvest said it expected its full-year earnings to be impacted by the decline in the Adcock share price between June 30, 2019, and July 31, 2019, as well as the adverse impact of the adoption of IFRS 16. It holds a 52percent stake in Adcock Ingram and said a further trading statement would be issued to provide specific guidance once there was reasonable certainty.

Chief executive Lindsay Ralphs said the group delivered a credible trading profit performance for the 10 months at a much slower growth pace compared to the interim result.

Ralphs said the performance was consistent with economic conditions.

“This is commendable considering the South African economy was already significantly constrained pre-Covid-19,” Ralphs said.

“It must be said, however, that the Covid-19 pandemic, which has mainly impacted April, has resulted in the economic and social environment becoming more demanding and uncertain, and has created significant operational disruptions, both on the demand and supply side of our economy. The impact on Bidvest’s trading businesses is significant and the services businesses are also being disrupted.”

Bidvest said it had enhanced its liquidity position by securing R4.5billion in additional general credit facilities, to total R11bn, with South African banks.

Ralphs said the pandemic would result in long-term structural changes to the economy and business.

“The group will strategically review all Bidvest businesses and right-size operations, which may lead to retrenchments, to ensure that our operating models remain relevant and appropriate for the level of demand,” Ralphs said.

He added that the group had established a R400m Covid-19 Fund to assist their South African employees not working during these difficult times.

Bidvest shares closed 5.83 percent lower at R143 on the JSE yesterday.

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