Bidcorp first half profit hit by Covid-19 second wave

Bid Corporation Ltd (Bidcorp) reported on Tuesday a decline of 46.2% in half-year earnings, as Covid-19 curbs hammer the hospitality, tourism and leisure industries due to a second wave of infections in some areas.

Bidcorp’s performance started well as most regions, particularly in Europe and Britain, emerged from the worst of the first wave of infections, with a positive financial performance through July and August, the South African food services company said.

This, however, started deteriorating into September in the northern hemisphere and worsened into the second quarter of its half-year ended December, with Europe and Britain firmly in the grip of the harsh second wave and lockdowns.

“The significant impact of the Covid pandemic on hospitality markets has been prevalent in all operating geographies to a greater or lesser extent throughout the reporting period,” Bidcorp said.

As a result, net revenue fell 10.9% to R60.8 billion ($4.16 billion) in the six months ended December 31 versus a year earlier, while trading profit declined by 37.4%.

Headline earnings per share (HEPS) from continuing operations fell to 391.6 cents.

Where lockdown curbs have eased, Bidcorp has seen demand recover in areas of discretionary spending, but businesses tied to crowds, from entertainment to sports, conventions, aviation, and cruise lines remain largely shuttered, it said.

Non-discretionary demand from institutional customers such as hospitals, aged care, prisons, military, and government departments has remained stable but below pre-virus levels.

“While the future remains uncertain because of the unpredictability of a return to economic activity in key hospitality markets, our operations in Australia, New Zealand and China have given us confidence that markets will bounce back relatively quickly once lockdown restrictions are eased,” Chief Executive Bernard Berson said.