Machinery and engineering company Bell Equipment reported a strong recovery in the financial year to December 2021 driven by improved demand for its products.
The bottom line was bolstered by internal efficiency improvements, working capital management and cost containment initiatives, the company said on Monday.
Bell Equipment manufacturers, distributes and exports a wide range of heavy equipment for the construction, mining, quarrying, sugar, forestry and waste handling industries worldwide.
The group, like many other businesses in the sector, was harshly affected by the global lockdowns that led to production and sales volumes dropping in 2020.
In its year-end results for 2021 the group reported it had bounced back from a loss in 2020 to after-tax profit of R294m in 2021, driven by improved market conditions, especially in the northern hemisphere and a strong recovery in sales, which were 20% up on 2020.
The group boosts its offering with aftermarket products, which include the sale of parts, service contracts and transport, and extended warranty and rentals.
Bell Equipment generated more than R8bn in total revenue, while net cash inflows for the year jumped 615%.
The company said it experienced increased demand for equipment in most markets during 2021, while investment in infrastructure and government stimulus packages benefited developed markets, particularly in the northern hemisphere. Bell said improved commodity prices and demand also resulted in some improvement in certain African markets.
“Increased production volumes at both the SA and German factories resulted in higher recovery of costs, positively affecting the bottom line,” Bell Equipment said in a statement.
Bell UK had a record year reporting revenue of more than R1bn for the first time.
“Effective management of working capital meant a lower level of borrowings and a significant reduction in interest costs on working capital funding and this together with strong cost containment contributed further to the improved financial performance.”
Meanwhile, the group’s operations in Russia, where the company derives about 3% of sales, have been affected by the invasion of Ukraine conflict and supply into Russia from all Bell group operations has ceased.
Bell Equipment said it will continue to comply with all export control regulations and economic sanctions that apply in that territory while consulting with the group’s external legal advisers.
It advised that the equipment previously intended for sale by the group in Russia for the remainder of 2022 has been reallocated to other markets.
The company said it will continue to monitor the “fluid” situation in Ukraine, as well as the responses of international markets and governments, to assess the effect on the group’s suppliers and supply chain.
Group directors declared a gross final cash dividend of 50c a share.
Bell Equipment’s share price climbed 2.08% to R14.75, giving it a market cap of R1.411bn.
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