Capital Equipment News

JSE-listed Bell Equipment has released results for the interim period ended 30 June 2018. The group reported revenue of R3,7-billion, a 6% increase on the prior period (June 2017: R3,5-billion).

BELL Post Intermat 2018 5

“Ongoing economic growth and increased demand for equipment in Europe, the Americas and South East Asia helped us to deliver satisfactory half year results,” says CEO Leon Goosen, adding that this was despite underperformance from the South African market.

“Investor appetite in general, but in particular for the mining and construction industries also remained unresponsive because of, as an example, uncertainty surrounding the Mining Charter. We expect general caution to continue in the run up to the 2019 national elections,” adds Goosen.

Goosen adds that volatility in exchange rates had put margins under pressure. “We don’t expect any immediate respite given trade wars, Brexit and political instability to continue to influence emerging markets.”

With respect to African markets outside of South Africa, Goosen says the positive management interventions had enabled the return to profitable operations during the period under review. “In the next six months, we will likely finalise a transaction to sell the assets of our Democratic Republic of Congo operation as it migrates to a dealer model to position itself to better serve this market.”

Goosen comments that globally, the E-series range of trucks has been well accepted and continues to lead the market in terms of providing the lowest fuel burn, lowest cost per tonne of material moved and in providing leading innovative features for onsite safety and vehicle protection.

“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.”

He says that in southern Africa, the strategic partnership with Japanese excavator specialist, Kobelco, has been very successful, and has been met with good interest and uptake from the market. “To bolster the traditional size classes, we introduced three mini excavator models in March this year to develop new opportunities in the light construction, demolition and light forestry sectors, helping us tap into an expanded customer segment.”

Following an exclusive distribution agreement with Russian heavy-duty tipper manufacturer, Kamaz, the first trucks were delivered to customers. Given the promising feedback, Goosen says Bell would investigate other applications of the product to take advantage of this highly competitive market.

“South East Asia is another focus market for us – the market adoption of our products in Indonesia through an established dealer network has been extremely positive. The mining conditions and operations are very similar to those in Africa where Bell trucks are born, bred and tested.”

Goosen says the group is progressing its investigation into introducing B-BBEE ownership partners to its South African manufacturing operations and to build on the ownership profile at the sales distribution operation to further improve empowerment credentials.

Financial summary

During the period under review revenue increased by 6% to R3,7-billion (2017: R3,5 billion).

Profit from operating activities was flat at R199-million.

Profit for the period increased by 11% to R133,1-million (2017: R119,6-million).

Headline earnings per share increased by 10% to 131 cents per share (2017: 119 cps).

Net asset value per share increased by 11 % to 3 363 cents (2017: 3 032 cents).

An interim dividend of 20 cents per share was declared which is in line with the interim dividend of 20 cps in 2017.


Despite the economic situation in South Africa, Goosen says the group was enjoying a strong global increase in demand for all types of heavy equipment. This had however led to pressure on upstream suppliers to meet increased volume requirements.

He adds that a restructuring exercise was completed recently within the group to better utilise and direct resources in pursuit of continuous improvement and the most effective alignment of structures to the evolving group strategy.

“We will continue our ongoing focus on our aftermarket and product support offering in all regions. A key example is the expansion of the Bell Eisenach-Kindel facility in Germany, which is currently underway with completion of the second phase expected by the second quarter of 2019. This will facilitate better flexibility and quicker responsiveness to customers to support the group’s market growth in the Northern Hemisphere.”

Goosen indicates that the group’s American Logistics Centre, located in North Carolina in the US, would start trading in the fourth quarter of this year, and is ideally positioned to service the expanding dealer network and rapidly growing truck population in the North American region.

“Both geographic and product diversity is proving to be a successful strategy for Bell and coupled with our commitment to driving an optimal utilisation strategy with outstanding aftermarket support will ensure shareholder value is unlocked,” concludes Goosen.

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