Bell grows profits almost a fifth despite supply-chain pressures, Russian sanctions

Karl Gernetzky

News24.com

Bell Equipment, which makes and sells heavy machinery such as dump trucks and forklifts, is still confident about its growth prospects as many governments embark on infrastructure spending to drive a post-pandemic recovery, also avoiding any write-downs for its relatively small Russian business, which has paused operations amid sanctions.

Bell’s profit rose almost a fifth to R210.33 million in the firm’s year to end-June, also benefitting from better-than-expected demand from the mining industry, but the firm is still grappling with uncertainty over the global economy, as well as headaches stemming from supply chain disruptions and surging input costs. Along with the uncertainty, Bell said on Friday it was considering investing in its own operations, and it opted not to declare an interim dividend.

Valued at about R1.3 billion on the JSE, Bell generates more than 60% of its revenue in SA, with most of the rest coming from Europe. Bell said on Friday while SA’s construction sector continued to struggle, its strong black-empowerment credentials had helped it gain some market share, while it also benefitted as miners look to take advantage of high commodity prices.

“While there are signs of economic slowdowns in some markets, existing stimulus packages continue to drive demand for Bell products in most international regions,” the firm said. “The group has healthy order books in all regions for the remainder of the 2022 financial year and expects global demand for its products to continue to increase.”

Bell, which generated about 3% of its revenue in Russia in 2021, has also opted not to write down its business in that country, which has been hit by unprecedented sanctions from Western countries in the wake of its invasion of Ukraine.

The company has said previously that equipment destined for Russia could be easily absorbed by other markets, and it has stopped supply to the country, as well as paused operations. Bell said on Friday after testing for impairment it had not written down its business there, considering its R27.9 million in inventory as “recoverable”. Its R41.3 million in cash in the Russia remains inaccessible to the group outside that country, however, given the sanctions.