JSE-listed Bell Equipment on Monday posted plunging earnings on the back of the continuing weakness and unpredictability of the resource-based economy and the delayed impact of protracted strikes and labour unrest.
In addition to the “extremely challenging” global and local environments marred by the collapse of the oil price, political turmoil in some regions and weak economies, besides others, South Africa had, in 2014, been hit by a five-month-long platinum industry strike, followed a few weeks later by a five-week-long National Union of Metalworkers of South Africa (Numsa) strike.
Bell’s profit for the year to December 31, fell to R66.4-million, from R205.7-million in the prior year, as the disruption to mining production, particularly during the first half of the year, resulted in orders for equipment not being fulfilled.
Headline earnings a share fell from 192c in 2013 to 49c in 2014, while basic earnings a share fell to 67c in 2014, compared with 193c in the prior year.
Revenue, however, increased by 5% to R6.6-billion.
“Both [strikes] had significant detrimental effects on Bell's trading, as the former virtually closed an industry into which Bell markets much of its product and the latter impacted Bell directly as many of its employees are Numsa members,” the company explained in a statement.
Rolling blackouts in South Africa have also “added to the difficulties” weighing on Bell and its suppliers.
“Notwithstanding the above, Bell is known for its innovation and resilience and will adjust its operations accordingly to meet the conditions that exist,” the company assured shareholders.