Bidcorp faces 50 percent decline in earnings
BID CORPORATION (Bidcorp) share price fell by more than 6 percent on the JSE yesterday after the international broadline food service group flagged that its earnings were likely to dip by 50 percent, hurt by a 28 percent decline in sales during the last quarter of its financial year.
As a result, Bidcorp said its headline earnings per share (Heps) from continuing operations was expected to decline by 45 and 50 percent for the year to end June, down from last year’s Heps of 1 443.6c and basic earnings per share (Eps) was expected to fall by between 66 and 70 percent, down from last year’s Eps of 1 451c.
“Bidcorp has been significantly impacted by the catastrophic economic and social consequences of the Covid-19 pandemic, which took hold across every operating geography from late January onwards. As a consequence of the lockdowns and restrictions caused by Covid-19, sales declined by 28 percent in the last quarter of the financial year compared to the same quarter last year,” it said.
It incurred significant abnormal costs, including additional receivables provisioning of R785 million, inventory obsolescence of R248m and restructuring costs of R470m. “Asset impairments of R940m have been taken, the most significant of which relate to goodwill on our Spanish operation,” Bidcorp said.
Bidcorp said its sales for the week to end April 5 reached a low of 37 percent compared to the same week last year. However, sales recovered to 65 percent in the week to end May 31 and to 67 percent to the week to end June 14 compared to the same weeks last year.
The share price declined to R252.02 a share in the morning, down from Friday’s closing price of R269.75. However, the stock recovered some lost ground to R257.13 in the afternoon before closing at R251.02. Bidcorp will release its full-year results tomorrow.