Despite difficulties in a number of its major markets and industries, JSE-listed Bell Equipment has seen a modest improvement in the half-year results relative to 2014, with earnings a share climbing 67% to 106c for the six months ended June 30.

The company on Tuesday said favourable exchange rates, as well as efficiency improvements and a strategy to focus on its northern hemisphere construction equipment markets had made a positive impact on its books, resulting in it reporting a profit after tax of R101-million.

It added that right-sizing and restructuring initiatives, improved efficiency at the factory and foreign currency gains during the period, were the main reasons for the improvement.

“Restructuring actions taken in the early part of the year have better aligned our expenses to the current lower level of activities encountered in our domestic market and other regions where we have traditionally  been more reliant on mining related business. 

“There is no expectation that there will be an improvement in commodity demand in the short term and factory production rates have been adjusted accordingly,” the company added.
However, owing to depressed markets, revenue for the six months was R2.9-billion, down 16% from R3.4-billion in the same period last year, while inventory levels increased by R259-million since December 2014.

This, together with a record sales month in June that resulted in high receivables at the end of the half year, contributed to an increase in net short-term interest-bearing debt of R563-million from the end of 2014.

“Receivables normalised in July and plans are in place to bring inventory levels back in line with long-term targets by year-end,” Bell Equipment said.

Meanwhile, it noted that the market remained challenging, with power supply interruptions across its South African operations and its more than 1 000 domestic suppliers of component parts and services, being disrupted.

“This contributed to the increasing costs of doing business in this country,” the company said.