Bidvest Namibia

Overview

Trading profit declined to N$400,2 million during the period on a 2,6% increase in turnover.

Operating profit was bolstered with the N$101,9 million profit on the sale of MFV Starfish. There was a significant decline in the Fishing division’s trading profit due to lower quota allocations.

There was successful product innovation in the face of quota reductions and a strong second half at Angolan business.

The Commercial and Industrial Services division showed strong revenue and trading profit growth.

Freight and Logistics experienced a decline in project activity and the Food and Distribution division’s performance was disappointing.

Renewed growth will be sought in 2016 though the acquisition of sufficient fishing quotas will be crucial. Bidfish contributes 80% or more of our profit. It reacted energetically to lower quotas and will continue to innovate.

One vessel from our fleet has been sold and the sale of a second is imminent. This will help refocus the business.

Angolan operations are well positioned for growth.

Bidfish purchased the Glenryck brand late in 2015, paving the way for increased penetration of more African markets.

At Bidcom, the pursuit of efficiencies and savings will continue and further growth will be pursued into the SME channel.

People growth is a priority. New methods of incubating and attracting top talent will be explored.

A strategic acquisition was finalised early in the new year when we purchased the Novel Motor Company. This motor retailer is poised to become a separate division, bringing the prospect of new growth in new areas.

People

People numbers		Training spend (R million)*
*Including learnerships and bursaries

We are one of Namibia’s largest employers and job creators. Our staff are innovative and resourceful and to ensure continued high levels of motivation an employee effectiveness survey was conducted. The 73% response indicated our people are happy to share insights. The survey confirmed a high customer service ethos across all teams.

We continually invest in training and development, and have achieved sustained employment equity gains. Namibianisation programmes are a priority.

In 2015, 1 319 of our people attended formal training while total training investment reached N$3,8 million. We enrolled 60 people at educational institutions. N$0,3 million in bursaries was awarded. Learnership investment topped N$3,6 million.

Our Walvis Bay Training and Development Centre is a core resource and when necessary a satellite centre serves Windhoek staff.

We also send high-potential managers to the Bidvest Academy in Johannesburg and are piloting a two-year rotation system that supports formal management training with executive level exposure across our business.

It is a point of pride that we provide a healthy and safe workplace. Our fishing businesses assign safety officers to all vessels. Larger vessels have full health and safety committees on board. Regular fire-fighting, first aid and safety courses are run.

Performance Turnover increased by 2,6% to N$4,1 billion (2014: N$4,0 billion) while trading profit declined to N$400,2 million (2014: N$493,7 million). However, operating profit was bolstered by a N$101,9 million book profit on the sale of the fishing vessel The Starfish to Carapau, a joint venture with three partners in which we hold a 25% stake. ROFE dipped to 28,9% (2014: 37,7%). Currency weakness was generally beneficial and lower oil prices helped contain fuel costs. Our Bidfish fishing operations were impacted by a further cut in the horse-mackerel quota. Two trawlers from the horse-mackerel fleet were laid up for a time, though jobs were protected as far as possible. Pilchard fishing was impacted by a lower total allowable catch. Pesca Fresca, our Angolan joint venture, achieved significant improvement following a strong second half. Reinvention of Tetelestai Mariculture as an open ocean oyster farm proved successful. Bidcom – our commercial operation – confronted a range of challenges. Freight and Logistics was impacted by an oil industry slowdown and lower freight volumes as project work declined. The diversified business model at Freight and Logistics showed its defensive qualities. As oil exploration rigs were laid up, demand firmed for ships agency services and volumes rose at Ocean Liner Services. Manica’s freight volumes fell, but the contract continued for logistical support to the new acid plant at the Tsumeb copper mine. Manica also provided services to the Husab uranium mine. Marine Services benefited from timely innovation and did well. Terminals had a difficult 12 months, with stevedoring under pressure. Transport performed below expectation in the first half, but staged a recovery. Trading won new business. Commercial and Industrial Services made continued progress on greater management focus and efficiency gains. Several businesses benefited from evolving partnerships with SMEs. Waltons faced margin pressure, but grew sales. Kolok focused on its core consumables business in a challenging market. Sustained growth was seen at Konica Minolta thanks to dedicated customer service. Service commitments underpinned performance at Rennies Travel and leisure activities grew. Cecil Nurse optimised project market opportunities. Steiner grew on successful innovation. Almost singlehandedly, this business has created Namibia’s corporate hygiene sector. Voltex had a difficult year. Food and Distribution was under pressure. A major contributor to lower volumes was a cancellation of a distribution agreement for chicken, traditionally one of the business’s largest selling lines. However, the turnaround was maintained at Caterplus. Taeuber & Corssen’s (T&C) achieved sales growth in some categories while new items were added to the brand bouquet. Integration into T&C of ProTrade was completed and a uniform IT system established. Products and services Bidfish reacted vigorously to quota reductions and a new business – Carapau – created a platform for partnership with fishing industry entrants. Namsov, our horse-mackerel specialist, completed a comprehensive feasibility study into refrigerated seawater fishing. At Freight and Logistics, newly launched Rennies Transport made good early progress, confirming solid demand for forklifts, stackers and materials handling products. The Freight and Logistics bunkering service (launched in July 2014) had a good year while Manica Business Centre (also established in the prior period) grew its range. Marine Services launched Orca, a ski-boat “taxi service”. The new operation achieved good early volumes. Marine Servicing and Trading was expanded into a single-source ships chandler service. Lubrication Specialists, part of Trading, secured exclusive Namibia distribution rights to most of the lubrication products of one of the oil majors. Namsea’s pilchard canning plant launched two new products – curried hake and pickled hake. Other offerings included a meal in a can, horse-mackerel in a can, canned minced hake, minced horse-mackerel and minced pilchard. Namsov investigated various weight, sizing and packaging innovations. QUICK LINK: http://www.bidvest.com/ar/bidvest_ar2015/pdf/comparative-sus-data.pdf

Products and services

Product Our 2015 fishmeal production again accounted for less than 5% of total wet landings while by-catch was less than 1% of total catches

Planet

Total GHG carbon emissions

Direct emissions Scope 1 | (tonnes of CO2)		Indirect emissions Scope 2 | (tonnes of CO2)

	2015		2014
Waste (tonnes)	35 130		25 848

Continued conservation of fish resources is critical to us. For many years, we have collaborated with the Ministry of Fisheries on this issue and, despite ongoing pressure on fish stocks, the resource has been well managed.

Inspectors are regularly hosted on Bidfish vessels and receive every cooperation.

Gear restrictions are rigorously observed, keeping the harvesting of juveniles to a minimum.

Crews maintain strong focus on by-catch reduction. Our on-board controls exceed minimum legal requirements. Our 2015 fishmeal production again accounted for less than 5% of total wet landings while by-catch was less than 1% of total catches.

Three Namsov vessels and the Walvis Bay canning plant had the Hazard Analysis Critical Control Point (HACCP) certification by mid-2015.

Sustainable environmental practice is embraced by all divisions. Fuel and energy efficiency, and responsible waste management are priorities.

Environmental and business benefits are also achieved through rigorous control of cold storage and air conditioning. Food safety is another priority.

Our economy was increasingly challenged by power disruptions as Namibia faced the knock-on effects of South African power instability. Some of our businesses have now invested in back-up generators. We commit fully to customer service. Further investment in generator capacity may be necessary to assure service levels.