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Bell h’line loss per share 274c vs profit 367c (2)
Johannesburg, March 12 (I-Net Bridge) - Bell Equipment (BEL), which manufactures and distributes a wide range of materials handling equipment such as articulated dump trucks, front end loaders and graders, on Friday reported a diluted headline loss per share of 274 cents for the year ended December compared to a headline profit of 367 cents the previous year.
Revenue for the year declined from 5.5 billion rand to 2.7 billion rand.
“2009 has been the toughest and most challenging year in the Bell group’s history. The global economic crisis continued to rage for most of 2009 and it was only in December that we started to see a slow upturn in sales which has continued through to February 2010. Despite this signal of an upturn it is still too early to be certain of its sustainability as the
availability of finance continues to provide challenges,” the group commented.
It added that in 2009, as a result of a drop in sales, the group had implemented a number of key measures to adapt the group to a new lower cost level.
“From a short-term perspective, these measures were both painful and costly but they were necessary to ensure the group’s long-term survival and competitiveness,” the group stated.
“During the year, we incurred once-off costs for personnel cutbacks, inventory and residual value write-downs and increased provisions for credit losses. With the recovery in global commodity prices, particularly copper, platinum and gold, we are seeing a recovery in several of our markets. This is allowing us to focus again more on our customers and at the same time we
continue to actively manage and control our costs in all parts of the group.
“We will also work hard to achieve a significant increase in productivity as volumes gradually return to more normal levels,” Bell Equipment added.
Exports achieved a turnover of 1.2 billion rand which equates to 46% of the 2008 export turnover. “Despite the turnover in Africa being lower than 2008, we are very pleased with the market penetration we achieved. Our operations in Africa continued to be strengthened during the year and we look forward to an improved performance in this very important market during
2010. The first two months of 2010 have certainly been better than budget in the Africa division.”
The group retrenched 1,148 employees during the year and is looking at further staff reductions in 2010.
“But hopefully this effect will be countered by the re-employment of certain manufacturing employees as production increases the demand for personnel,” the group stated.
During the year Bell and the Industrial Development Corporation (IDC) finalised a loan of 150 million rand to provide working capital for the financing of inventory and the company is in further negotiations with the IDC for additional funding of 300 million rand, 150 million rand of which will be used to continue to support Bell’s research and development and
capex requirements so that the group can take immediate advantage of any upturn with new equipment and facilities.
In an effort to further support Bell Equipment Limited’ s statement of financial position, the directors of IA Bell & Company (Pty) Limited increased that company’s cash loan facility from 150 million rand to 300 million rand during August 2009.
“Whilst the company has drawn down only R135 million of that loan at 12% interest per annum, it certainly will provide the necessary headroom to the company’s treasury,” Bell said.
It added that it had been able to reduce our commercial bank exposure from 812 million rand at the end of March 2009 to 428 million rand at the end of December 2009.
“Whilst some of this has been funded by the IA Bell & Company and IDC loans, the majority has come from better management of the working capital. We have also been very encouraged by the offers of continuing, if somewhat expensive, support from our bankers and financiers as we diligently work at reducing our levels of borrowings.”
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