Bidfreight

Bidfreight
 

Highlights

  • Strong performance with trading profit up 11,2% to R768,1 million
  • Major contracts result in good activity and utilisation levels
  • Bidfreight’s built-in quality provides competitive advantage
  • Volumes of basic commodities, bulk liquids and aid cargoes hold up well
  • New business gains in non-traditional areas
  • Work starts on R150 million Cape Town containerised cargo facilities project
    and R250 million build at Richards Bay
 
    Anthony Dawe, chief executive
 
 
   Financial indicators
(for the year ended June 30)
2009
R’m
2008
R’m

change 
 
  Revenue 18 647,9 21 992,7 (15,2)  
  Trading profit 768,1 690,8 11,2   
  Operating profit 763,1 719,1 6,1   
  Operating assets 2 675,0 2 925,9 (8,6)  
  Operating liabilities 1 811,5 2 485,7 (27,1)  
  Depreciation 143,5 119,8 19,8   
  Amortisation and impairments of intangible assets 11,0 26,7 (58,8)  
  Goodwill and intangible assets 68,0 67,4 0,9   
 
 
  Sustainable development indicator overview 2009 2008 2007   
  Employees 5 212 5 328 5 012   
  Total training spend (R’000) 16 540 20 175 18 355   
  Training spend per employee (R) 3 173 3 787 3 662   
  Employees attending HIV/Aids training (%) 22,5 23,0 25,3   
  Lost time injury frequency rate 6,6 9,1 8,4   
  Work-related fatalities (number) 4 3  
  BEE procurement (R’000) 1 681 646 1 656 496 547 541   
  CSI spend (R’000) 3 866 4 408 1 565   
  Enterprise development spend (R’000) 36 783 9 715  
  Total water usage (litres ’000) 335 298 300 076  
  Total electricity usage (kWh ’000) 80 361 56 880 50 512   
  Petrol (litres) 874 689 807 069 419 563   
  Diesel (litres) 5 720 253 5 538 579 3 482 354   
  Total carbon emissions (tonnes) 123 036 94 601  
  Carbon emissions per employee (tonnes) 23,6 17,8  
* Information not collated, not relevant or not entirely reliable
  The prior year numbers include subsidiaries that are now part of Bidvest Namibia. The numbers have not been restated as the impact is not significant
 

Strategic positioning

Our positioning has always been underpinned by substantial infrastructure strategically placed at South Africa’s air and seaports and our ability to act as the long-term partner of major companies. In the face of growing pressure on transport infrastructure, increasing emphasis has been given to our role as the reliable “efficiency-partner” of our customers.

Sustainable development

Bidfreight’s built-in quality continues to win business from customers, with strong governance systems at each major operation to manage these quality issues. A number of Bidfreight operations have a five-star NOSA rating and are ISO 9001 and ISO 14001 compliant.

Continued focus on broad-based black economic empowerment has shown positive results, with Bidfreight Intermodal being re-rated as a level 2 contributor and Safcor Panalpina moving from level 4 to level 3.

A number of Bidfreight companies provide free ARVs, immune boosters and vitamins as part of their HIV/Aids programmes.

Progress has been made on enterprise development through continued investment in Sebenza, a Bidfreight Intermodal owner-driver scheme and other forms of assistance to empowerment companies.

Recycling, efficient energy use and waste reduction management are becoming core business practices at our operations.

The on-site IVS clinic conducts biological monitoring of staff. A new ship-shore liaison system ensures dealings with ships follow international safety standards.

Manica is running a staff education programme to highlight environmental degradation in Malawi. RDS monitors electricity, water and fuel consumption, waste recycled and waste to landfills. A programme to reduce the fleet’s diesel consumption has fostered efficiency and cut vehicle wear and tear.

At SACD Freight new measures limit dust exposure. Safcor Panalpina uses a balanced scorecard to check environmental impacts. A SABT “Go Green” campaign drives environmental awareness.

Despite all the progress, Bidfreight unfortunately suffered four fatalities: in SABT, Manica Zimbabwe, BPO and Bidfreight Intermodal. Safety practices have been reinforced. Additional sustainability information is available on the Bidvest website.

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Performance

The division performed strongly. Trading profit moved 11,2% higher to R768,1 million (R690,8 million) while revenue decreased by 15,2% to R18,6 billion (R22,0 billion). Performance was pleasing in the context of deteriorating economic conditions. Our bulk-handling businesses did particularly well. Major contracts with long-standing customers resulted in good activity and utilisation levels.

Benchmarks

The divisional target, in line with the Group vision, is to achieve sustained growth and double the profitability of the business every five years. This implies a year-on-year target of 15% growth in trading profit. This has been, and remains difficult in the current economic environment, but remains our five-year target.

Key measures are volume and profitability. Trading profit is compared to the rolling five-year target, the annual budget and prior year. Cash flow (after working capital requirements) is also measured against these yardsticks.

Bidfreight’s capital expenditure averages R250 million a year to fund the replacement and expansion of capacity. Businesses receiving a capital injection aim for an appropriate return on investment.

Pay-back periods on capital projects and return on funds employed are scrutinised closely. Frequency and magnitude of insurance claims are strictly monitored. BBBEE scores are a focus area.

We are a target-driven business. Goals for each business are broken down into action-points and operational targets. These are communicated to individual business units.

Operational benchmarks are not meaningful unless everyone can understand them and what it will take to realise the objective and secure the incentives. Targets are therefore kept simple.

Profit is important, but is not the only yardstick. Safety is critical and takes preference over any targets.

The focus on targets shows its defensive value in difficult trading conditions. There was a fall in exports in areas of traditional strength at Bidfreight Port Operations, but teams there were quick to win new contracts, contributing to their long-term goal of diversifying the customer-base.