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Record interim results for Bell Equipment

Release Date: 05/08/2002 17:11
Code(s): BEL
Wrap Text

Record interim results for Bell Equipment Bell Equipment Limited Richards Bay heavy equipment manufacturer, Bell Equipment has reported a record breaking six month trading result with an increase in net profit from operating activities of 54% to R134 million compared to last year`s first six months of R87 million. Net profit after tax was up 61% to R86 million compared to R97 million for the full 2001. Despite the strengthening of the Rand in the first two months net asset value increased from R5,81 a year ago, and R7,05 six months ago, to a record R7,55, or a 30% increase in the period, as at 30 June 2002. "The South African market has continued to be strong and the fluctuating exchange rate has affected the competitiveness of the imported units of our competitors. Financing charges have increased due to currency exchange losses arising from a strengthening Euro, and together with higher than budgeted borrowings, has caused a considerable increase in financing cost as compared with December 2001," said Bell Equipment Group Chairman, Howard Buttery. "Similarly, the strengthening Euro and the increased purchase of componentry out of Europe as well as enlarged offshore operations has increased costs over the same period in 2001." Earnings per share were 92c for the six months of 2002 compared to 104c for the whole of 2001. Despite the increase in costs, revenue showed a 29% improvement at R1,1 billion for the six month period. Cash flow remained positive despite an increase of R50 million in fixed assets and investments and the payment of a R9 million dividend. Net working capital increased by R19 million since the beginning of the year, in line with the increased sales volumes. Cash flow from operating activities was R63 million for the first six months of 2002 versus R54 million for the whole of 2001. Buttery said the unequalled success of Bell Equipment`s D-series Articulated Dump Truck (ADT), during the period under review, was largely responsible for the increased sales and market share throughout the world. In South Africa revenue has increased by R175 million while revenue generated throughout the rest of the world increased by R74 million. "Business in Africa, outside of South Africa, hasn`t performed as well as we had expected but the strength of the European market has been phenomenal. However, the interim results are unlikely to be repeated in the second half of the year due to the cyclical decreased demand from the Northern Hemisphere. For the remainder of 2002, we will continue to ensure we attain higher levels of quality in our products, lower inventory levels, increased sales outside South Africa and that we continue to drive our cost reduction and manufacturing efficiency improvement programme." Commenting on the company`s success, Bell Equipment Chief Executive, Gary Bell said: "Apart from ADTs in South Africa, we have improved our market position in most of our major sectors. The competitiveness of our flagship, the D-series range, has been a key factor in Europe where we will continue to focus our attention and expect further gains in market share. We have also restructured certain parts of our distribution network, particularly in the UK, and this has contributed to our improved results." Bell expects the long term growth of the company to continue. "In the second half we will be introducing two substantial new products which will contribute to our bottom line over the next few years. These and others will be launched at the Electra Mining Show in Johannesburg in September." Richards Bay 5 August 2002 Ends Date: 05/08/2002 05:11:00 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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