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Bidvest [JSE:BVT] has reported a 10% increase in headline earnings to R2.1bn, and a 6.3% increase in trading profits to R3.3bn for the half-year to December 31, 2018.
Its shares were trading at R215.46 per share at 10:20 on Monday, up 1.82%. The results are preliminary and unaudited.
According to a notice to shareholders on Monday morning, headline earnings per share were up 9.6% to 629.1 cents.
The group also declared an interim dividend of 282 cents per share, up 10.6%, payable on 25 March.
Share of profit from associates decreased by 7.4% due to the decline in Comair profits, the group said. It attributed this to the higher aviation fuel price.
This offset a strong performance from pharmaceutical company Adcock Ingram.
"Adcock Ingram delivered strong results and secured a significant portion of the Government's ARV (antiretroviral drugs) tender.
"Although Comair's profits contracted, a recent claim awarded against SAA should go some way in closing our value gap expectation," the statement said.
Operating expenses increased by 4.7%, which Bidvest described as "well managed".
The group's electrical division took a knock, which it described as "not surprising".
"[...] trading profit for the Electrical division declined 18.6% to R120m," the statement said. "The division remains fundamentally rooted in the construction, mining and infrastructural development sectors, and remains substantially affected by the current, dismal, environment."
Various initiatives are underway to future-fit the businesses, the Bidvest added, in a bid to lower the cost of doing business through technology and efficiency improvements.
Businesses focused on infrastructure and construction projects were hard hit, with the services, trading and distribution company anticipating an uncertain outlook and financial strain in its customer base.
Income from investments improved to R86.5m, compared to H1 2018 at R24.9m, which the group attributed to profit realised on the disposal of Bidcorp shares, an exchange rate revaluation gain on Mumbai International Airport Private Limited (MIAL) and unrealised losses on other, smaller investments.
The returns on the insurance investment portfolios were negative as at 31 December 2018, a negative swing of R85.6m year-on-year.
The disposal of all remaining Bidcorp shares was concluded by the end of 2018, Bidvest said, while the disposal of its stake in MIAL was progressing.
