Bell reports strong H1 results, remains bullish on South African market

JSE-listed BellEquipment achieved a 6% year-on-year increase in revenue to R3.7-billion for the six months to June 30.

Headline earnings a share increased by 10% to 131c and an interim dividend of 20c was declared. Bell CEO Leon Goosen cited ongoing economic growth and increased demand for equipment in Europe, the Ameri casand South East Asia as assisting Bell in delivering “satisfactory” interim results, despite the underperformance from the South African market.

He said that while working capital allocations are biased toward the “vibrant” markets in the northern hemisphere, Bell is “keeping an extremely keen eye on its home turf”, and that it will move immediately if it sees some economic stimulus and policy certainty return. 

“We’re still quite bullish on the South African market.” For the period under review, profit increased by 11% to R133.1-million, despite margin pressure caused by a volatile currency. Goosen added that Bell does not expect any immediate respite given the seemingly escalating global trade wars, Brexit and other political instabilities, but noted that the company had systems in place to mitigate the effects of volatile currencies.

He noted that Bell had to restructure some of the African businesses, and also migrated some into third-party dealer groups, to position itself to better serve its customers. He also added that there are still major opportunities in the Southern African markets. 

“In Europe, our new products are doing well and will give us access to a wider customer and industry base, while the Americas offer good promise for the next few years as mining, aggregates and construction – the main users of our articulated dump trucks – all continue to show good growth.”

Goosen said that the strategic partnership with Japanese excavator specialist, Kobelco, has been very successful, and has met with good interest and uptake from the market. The company is looking to expand the range of its agricultural and forestry products and to continue to develop markets throughout the rest of world.

South East Asia is also a prime market as adoption of Bell’s products has been positive and mining conditions and operations being similar to those in Africa, the company’s products are well-suited to the environment.

Goosen added that the group is progressing its investigation into introducing broad-based black economic empowerment ownership partners to its South African manufacturingoperations, having already successfully implemented an empowerment transaction for its sales distribution operation.

Looking ahead, Bell will continue to focus on its aftermarket and product support offering in all regions and facilitate better flexibility and quicker responsiveness to customers to support the group’s market growth in the northern hemisphere.”

Goosen noted that there are some positive signs for African mining markets, and that the company is well positioned to exploit the opportunities available in several international markets.