JSE-listed heavy machinery manufacturer Bell Equipment has posted a 66% increase in profit for the year ended December 31, 2023, to R793-million.
Following unprecedented global demand for equipment in most markets, the company generated basic earnings per share (EPS) of 799c, which is a 67% increase on the prior year’s EPS of 47c.
The company has opted not to declare a dividend, owing to cash preservation for growth and amid the current global political and economic uncertainties.
CEO Ashley Bell says a positive commodity cycle and solid infrastructure spending supported the group’s earnings and profitability in the reporting year, despite some challenges such as port congestion in South Africa and labour shortages in Europe.
He adds that higher logistics costs and inventory buffers have impacted on margins, inventory, debt levels and return on invested capital, but the company nonetheless remains well positioned for the new year with cash and cash equivalents of R251-million.
Bell says global commodity demand translated into good articulated dump truck (ADT) demand from the mining sector in Africa, Southeast Asia and Australia in the year under review, with further growth coming from the US and parts of Europe driven by the construction sector.
The US market remains the greatest opportunity for growth for Bell’s ADT business.
The company will be launching several new machines in the coming months, including the Bell Motor Grader, which will be manufactured in Richards Bay from early 2025, as well as a Bell Timber Processing Head for timber harvesting operations, which will also start being manufactured early in 2025.
Bell Equipment continued to grow its network in the year under review to having 24 dealers and 49 outlets across the country, including several Bell Equipment Sales South Africa branches.
The construction sector in South Africa remains volatile and the promised large infrastructure spend has not materialised as quickly as hoped. “Although coal exports are a concern, Eskom’s demand for coal is still high, and at this stage we expect demand from other mining sectors to remain fairly consistent with the levels seen during 2023,” Bell concluded.