Bell Equip­ment posts strong growth…

Zambian Business Times - - FRONT PAGE -

JOHANESBURG STOCK Ex­change -listed Bell Equip­ment achieved a 6% year-on-year in­crease in rev­enue to USD251-mil­lion 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 Amer­i­cas and South East Asia as as­sist­ing Bell in de­liv­er­ing...

JOHANESBURG STOCK Ex­change -listed Bell Equip­ment achieved a 6% year-on-year in­crease in rev­enue to USD251-mil­lion 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 Amer­i­cas and South East Asia as as­sist­ing Bell in de­liv­er­ing “sat­is­fac­tory” in­terim re­sults, de­spite the un­der­per­for­mance from the South African mar­ket.

He noted that in­vestor ap­petite, par­tic­u­larly for the min­ing and con­struc­tion in­dus­tries, re­mained un­re­spon­sive and that the com­pany ex­pected this cau­tion to linger in the run-up to the 2019 na­tional elec­tions.

How­ever, he told Min­ing Weekly On­line 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 USD9-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.

“Rand strength im­pacts us as a net ex­porter, hence the mar­gins were un­der pres­sure in the ear­lier part of the year. Our busi­ness model is set up to mit­i­gate con­cen­tra­tion risk with our global ge­o­graph­i­cal and in­dus­try ex­po­sure.

Re­gard­ing African mar­kets out­side of South Africa, Goosen said pos­i­tive man­age­ment in­ter­ven­tions had en­abled the re­turn to prof­itable op­er­a­tions.

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.

“We are mak­ing sure that we con­tinue to sup­port our cus­tomers in the ter­ri­tory at the high lev­els they be­come ac­cus­tomed to, and that we’re well-po­si­tioned to cap­i­talise on the growth that South­ern Africa has to of­fer.”

DI­VER­SI­FI­CA­TION AND GROWTH

Bell’s 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 on-site 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.”

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.

“To bol­ster the tra­di­tional size classes, we in­tro­duced three mini ex­ca­va­tor mod­els in March . . . to de­velop new op­por­tu­ni­ties in the light con­struc­tion, de­mo­li­tion and light forestry sec­tors.”

Fur­ther, while min­ing and con­struc­tion make up the bulk of Bell’s in­dus­try sales, “the more di­ver­si­fied you are the more re­silient you are to in­dus­try cy­cles . . . we will con­tinue devel­op­ing new mar­kets”, Goosen said, adding that 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 in In­done­sia has been pos­i­tive.

Fur­ther, the min­ing con­di­tions and op­er­a­tions are very sim­i­lar to those in Africa, mean­ing the com­pany’s prod­ucts are al­ready 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 man­u­fac­tur­ing op­er­a­tions, hav­ing al­ready suc­cess­fully im­ple­mented an em­pow­er­ment trans­ac­tion for its sales dis­tri­bu­tion oper­a­tion.

“We’re quite far down the line in in­ves­ti­gat­ing po­ten­tial so­lu­tions to en­hanc­ing our trans­for­ma­tion ob­jec­tives at the South African man­u­fac­tur­ing op­er­a­tions . . . be­fore year-end we’ll be able to tell the mar­ket more in this re­gard.”

OUT­LOOK

Look­ing ahead, Bell will con­tinue to fo­cus on its af­ter­mar­ket and prod­uct sup­port of­fer­ing in all re­gions, in­clud­ing, for ex­am­ple, the ex­pan­sion of the Bell Eise­nach-Kin­del fa­cil­ity in Ger­many.

“This will fa­cil­i­tate bet­ter flex­i­bil­ity and quicker re­spon­sive­ness to cus­tomers to sup­port the group’s mar­ket growth in the north­ern hemi­sphere.”

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

He 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.

Fur­ther, he com­mented that Bell is flex­i­ble and ro­bust enough to mit­i­gate any un­for­tu­nate eco­nomic con­se­quences re­sult­ing from the im­ped­ing Brexit and po­ten­tial es­ca­la­tions in the US’ mul­ti­ple trade wars.

Bell Equip­ment at a South African mine.

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