Number crunchers get crunched in numbers

South Africans have battled through water shortages and emerged almost unscathed; they have also struggled through electricity outages and learnt to cope.

But now we’re facing a truly grim situation: a shortage of audit firms to review the shoddy work done by other audit firms.

As curator of Venda Building Society Mutual Bank, SizweNtsalubaGobodo is interrogating KPMG’s work as external auditor at that entity. The role of curator also has Gobodo looking into the work of VBS’s internal auditor, PwC.

However, given all the complaints about its work on Denel, it seems likely that in the nottoo-distant future Gobodo’s work on that state-owned entity might also be subject to a review. And Gobodo is surely also facing some sort of review of its work at Eskom, where, remarkably, it signed off clean audits every year.

Similarly, it seems likely that PwC’s audit work on South African Airways, at which it provided unqualified opinions for the steadily deteriorating national carrier, might soon come up for review.

As it happens, PwC is investigating years of work done by Deloitte on Steinhoff. And right now, the Independent Regulatory Board for Auditors is battling to get someone at Deloitte to take responsibility for the collapse of African Bank in 2014.

So far, the only one of the big four audit companies that appears to have remained unscathed by signs of a collapse of standards and loss of credibility is E&Y. It is hardly surprising that E&Y is not crowing about its status. Things in this business are changing so dramatically that one day’s hero is the next day’s villain.

Bell Equipment, the maker of articulated dump trucks and other vehicles and equipment used in mining, construction, forestry, waste collection and agriculture, delivered much better annual results to December 2017 than in 2016.

There is no real secret here. Global mining came back after a prolonged downturn and all boats rise, so to speak. But some market watchers say it is early days yet.

The JSE-listed, KwaZuluNatal-based group seems to be in turnaround mode at long last, says Ron Klipin, a Cratos Capital portfolio manager.

Strong tailwinds in the mining cycle are positive, as is Bell’s thrust into North American markets, which is gaining momentum. This has been made possible by a ramping-up of capital expenditure in Bell’s German logistics and manufacturing operations.

This, in turn, has enabled shorter lead times to get product into the US and facilitates the move of additional production to Germany from group facilities in Richards Bay.

Revenue jumped 13% in the year, but sales volumes rose twice that to 26% due to a stronger rand.

Headline earnings per share shot up from 48c a share to R2.70 per share.

But this was off a low base caused by previous losses in Africa, which now appear to be better managed with tight control of expenses.

Bell is taking further steps in restructuring underperforming operations in the Democratic Republic of Congo, Mozambique and Zambia.

The company is a favourite of the Department of Trade and Industry because it lives up to its motto of being a feisty homegrown manufacturer of “strong reliable machines with strong reliable support”.